welcome to "worldwide exchange." i'm karen cho. selling in u.s. markets grinds stocks to the lowest month of the year in july. asian markets dip to a low after china posts its strongest growth in almost two years. the world's largest steelmaker cuts its outlook. and a bidding war for t-mobile u.s. starts action in the european commentator.

the parent company deutsche telecom jumps at the open. display you're watching "worldwide exchange," bringing you business news from around the globe. good morning. welcome. it has been a busy morning. so far, some of the steepest boards in spain, portugal and switzerland. you can see still sharply lower, about 0.6% off the major markets. the ftse mib off 0.3%. french, italian and german pmis suggesting a fall from the june level right across the charts.

but it were a trace on the manufacturing side. to the u.s. markets, it was a choppy session statewide. the argentinean default. you had concerns around geopolitical tensions, still with fresh sanctions and then the ripple effects across markets. earnings weren't particularly strong, either. we saw the s&p, the dow and the nasdaq around n session and a jump in the vix as a result. the vix up 23%. on the data front, interesting to note, u.s. labor costs according to their biggest gain in more than 4 1/2 years in the second quarter. a little bit of sign of wage pressure starting to creep into the system. initial claims and unemployment benefits rising by 23,000. when you see more people joining the unemployment cue, you've got cost rising on the labor side. this is the jobs story today as we chase nonfarm payrolls later on. a couple of stocks to tell but

and the moves out there. the french telecom company iliad placed a bid for t-mobile in the u.s. the surprise buyout could trigger a bidding war with sprint corp. which has a deal on the table for t-mobile. it offered $15 billion in cash for a 56.6% stake in t-mobile which is owned by deutsche telecom. two china pmis both staging a recovery. the final hsbc figure was marginally down on the flash estimates while the official pmi came in stronger than expected. those readings at 51.7. you can see the reaction across on asian markets. the shanghai composite has been trading a little lower in the session today. in fact, i think stateside it's having more of an impact on these markets than the data

points. bond markets shaping up like this, you've got prices down across the charts. yield in u.s. treasury, 2.57%. it's been elevated to gdp numbers came in at 4% in the second quarter. could see some price actions there on the back of the u.s. nonfarm payrolls. bonds, 1.17%. 2.6 gilts and in italy, tracking below that 3% mark, but slightly more elevated there on the charts this morning. foreign exchange markets, we're still seeing some strengths in the u.s. dollar story. 1.338el 2 euro/dollar. 102 yen. the aussie is still below .93. and slightly softer in sterling. joining me now, galtan with insignia, perhaps you can give us a sense of your feelings on markets today. why was there such a strong

reaction? why such a sell down in one session? >> i think some of the be lated action to markets maybe brought on by all the other news i think as we saw yesterday. argentina, ieps, etcetera. but the reality is that this issue of central bank policy exhaustion remains with us. but at the same time, then we potentially have tightening. it's just a relation of the same. >> we didn't see much of a change in turn from the fed. there's been a slight hint about some of the inflation. it doesn't suggest the fed is going to take the punch bowl away anytime soon. >> given that we have come from 2009 with every central bank prt much pumping the monetary

figures in, it's all that policy. what is the additional policy? so you've got that back drop and the markets are trying to figure out whether growth is going to reach a self-sustaining level. but if it does, that results in interest rate volatility. or volatility related to interest rates rising. >> it's suggesting the seasonals are performing like clockwork that we now see softening up in the period. you make the point that the equity markets are relatively fully valued at this point. i question when you see the earnings stateside starting to outperform, there's been decent numbers across the board and one of the concerns on valuations were the earnings side. but the earnings are coming through. >> the earnings have been okay. and we have seen a 10% growth of earnings from a quarterly year on year basis. but nonetheless, markets are up in excess of that and they've already expanded. there have been very few periods

of time where the s&p has traded sustainablely with valuations such as the forward looking multiple for an extended period of time. so, yes, you know, it's fully valued to, you know -- and we just have to take that on board. the only spikes we've seen above these have been only that, spikes. >> there's been different performances by the sectors, as well. utilities down 7 odd percent across the course of the month. telecoms and techs are the only two sectors that gained in july. we're not talking about a broad brushstroke here because not every stock has gone once in recent weeks and months. >> that's right. correlation has been remarkably low. as you said, as liquidity does dry up and as we see some volatility, then i think these coalitions will pick up. you had see as growth is picking

up, some of the cyclicals that are lower price stocks will do better. but at the same time, their defensives will perform better, as well. >> we had the flash 12i789s out a short time ago in germany and they were all showing that we've pulled back from the june manufacturing highs and july is looking a little softer. this combined with the very low inflation reading we had yesterday, how wobbly is the european story? >> it's still got a long ways to go. and the ecb, as we've said in our notes, is still behind the curve. the additional impact we're going to see is nowhere near what's required to actually if they truly wanted to get inflation back up. in', they need proper qe. but again, you know, this whole question of draghi going down the same route that everybody else has in terms of central banks and t pumping the system with liquidity -- >> but we know a lot of money was coming over stateside. but is the expectation now under

what the market has hoped? >> yeah. i think the outlook for europe is still questionable. and i think it's been their flows that we're seeing back into the u.s. as a result of the money coming out. it's to a certain degree warranted, yes. >> would you stay in touch with us today. @cnbckaren is my direct twitter handle. also coming up, robert walters, all this on u.s. nonfarm payrolls today. holidays are coming as we search for christmas products on uk.co. can you believe it? who shops for christmas presents in august? weventd out why businesses should be prepared. plus, gopro and focus will get a snapshot of the earnings report as a public company. and it's not all about u.s.

jobs. heading out to the july auto sales, we preview the numbers. can the industry continue to excel? all that and more on today's "worldwide exchange." >> you've been hearing that a lot in recent days and the latest today is around socgen. despite the company's ties to russia. it contributed positively to the french bank earnings and the ceo sounded positive he could take advantage of the banks in russia. this has been positive for the company by the sounds of things today, stephane. >> absolutely. the contribution from russia was 15 million euros for the results of societe generale in the second quarter. it's a small part of the business, but it's a positive contribution with the lower cost to russia.

socgen posted profits just shy of 8%. as you mentioned, the russian operations, the french bank says it will remain committed to the country, to russia, and it will comply with international sanctions. i caught up with the ceo of the bank for the equity to discuss its exposure to the russian markets. >> in russia, you see an increase of tensions. we continue to take advantage of the development of this market. we are adapting to the current second chances. we had a positive contribution of russia, second quarter. we had good revenues, decrease

risk. we are going to, again, comply with the rules, with the sanctions. we are going to adapt with the new deals, the new transactions. but we think we can adapt in this activity fundamentally in the long-term, take advantage of our presence in russia. >> the potential impact of the russian sanction from your business? >> it's a bit premature. overall, let me say it is probably, again, less infrastructure projects, probably, again, a slowdown in the economy. but, again, we think that we can service our franchises, in particular all the business in -- with the mortgage, with the consumer loans and transform the -- we have new services to offer to our clients. >> what is today your exposure to russia? >> big exposure at the end of

the day. 3% in russia. exposure. so, again, we have limited our exposure and we brought you that going forward. in terms of financial forecast, it's less than 5% of our total net profit with an expected revenue in 2016. >> do you do you feel that political sanctions are always compatible with the reality of the business? >> there are sanctions and we will comply with the sanctions, we will comply with the rules. >> and the cost of risk in the second quarter was at the lowest level since 2008. societe generale is confident it's going to decrease again in the second quarter. 200 million euros to cover its litigation costs and that brings the provisions to 900 million

euros so far. over to you. >> stephane, thank you very much. meantime, the question marks around china and the mainland, look how strong is growth while manufacturing has climbed to a seven-month high, building evidence that the reforms are now making their mark. ♪

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bank of ireland is in focus today. earlier, we spoke to the ceo and asked whether there was anything interesting attached to bank. >> our strategy is to ensure that we're at a customer loans funned by customer deposits and our capital and our liquid assets are funded by the markets, even three or four years ago, we always tried to resist the temptation of a central bank money because, you know, that can be unsustainable if you base a strategy around that. so i don't think that we will be significant participants in that you have to be very careful to make sure you can wean yourself

off. but obviously, if there's an opportunity to do a small level of a carry trade, we'll look at that. >> the red line shares are hitting higher after the car insurance company posted an 8% increase in first half pretax profit coming in at 225 million pounds. the share price up almost 4%. but in the meantime, areva shares down 16% to cut its outlook for the first year after posting a loss of 694 million euros for the first half. the state-controlled energy group has closed its loss making solar power unit, focusing instead on nuclear. on the back ooh that, "squawk box" spoke to the ceo and asked when does the nuclear industry -- in crisis? >> no, we're not -- situation. we've generated positive cash flow for the second -- actually in a row which has not happened for the company for eight years before that. so i think it's quite an achievement that we are proud of.

this is a restoration of the financial equity realm of the company. the net loss was incurred to brand new levels, actually, where we take strong actions like joint ventures or some of the activities. >> it's the share price responding, as well, up 2%. beating analyst expectations. speaking earlier, the axa ceo was asked about bond holdings. >> our business is too much. assets and liabilities. to be in a position to deliver to policyholders what they expect in the long run. if we hold subwinds, it's because they in principal were to led other chas of assets and we minimize the gap which reduces very much the risk if rates were to come up.

>> let me pick up on that about risk reduction. >> in duration, yes, we have been releasing duration pretty much for a while now. but looking at the high yield side of things, the cash we're seeing move out of there. we seem concerned with the debt rising, too, so we are looking at those positions. this time, there doesn't seem to be any evidence of default around the corner when you look at the cycle about interest rate hikes. >> that's right. a reversal came in as a result of qe. so a reduction in liquidity, high yield being one of the most susceptible ones. >> let's just come back to the earnings because we're seeing the turn from a bunch of

different companies. there's been better numbers coming through with some of the beaten up corporates. bank of ireland. you've still got negative numbers coming through from the nuclear industry, but the insurance industry. it's patchy across the board. how do you feel about the things that have got here in europe? >> yes. i think the risk there, those that have been able to deliver better earnings because of better financial asset performance such as the bond. so that would be the insurers, the banks that have typically taken up and boosted margins. but on the other side where we are looking at consumer companies where you need top and bottom line growth, you're seeing problems still at the top line and at the bottom line level. part of that is due to the euro and where it is in comparison to other currencies. but part of it is just the fact that right now we haven't got enough operational gearing to deliver those upside surprises that we want to see. the level of growth is just too low at the moment.

>> we probably shouldn't be surprised because stateside, even with the economic picture, it is looking challenged, as well. galtum, stay right there. i want to look at the other stories. india's factory pmi rose to 53 in july from 51.5 in june. its highest sips february 2013. however, the strong leading wealth are tempered by a sharp increase in the cost of raw materials. import prices rose at their fastest pace since january. meantime, manufacturing in japan expanded slower in july than estimated. the market pmi readings fell to a seasonally adjusted 15.5 to 50.8. slow manufacturing comes after a drop in consumer spending and a larger than expected decline in june. back to emerging market and the two chinese pmi readings out

this morning, both showed the manufacturing sector of staging a recovery. the latest figures are lower on the flash estimate but still in expansionary territory. the official numbers came in stronger than expected, both hit at 51.7. which is quite remarkable because there's been a lot of concerns about this hard landing taking place in china. joining us now out of hong kong today is darius goss. the numbers out of china suggest we are seeing some strength in these economies. how strong is it in your book? >> i think the second half of the year will be better for the biggest emerging markets in asia. when it comes to india, it's a lot to do with the optimism that the new government and the prime minister will manage the economy better. so business men are more upbeat on outlooks.

in china, grow with the stimulus. it's continuing this until the bank continues to ease monetary policy, as well. we expect a better environment in this part of the world and the rest of 2014. >> the securities with a bit of number crunching, anytime you get pmi in the 51 to 52 region, it signals a climb of about 8%. saying this sets up up nicely for the fed quarter, remains that potentially have an eight handle to deal with when the market has been looking at all forms of different contraction back towards that 7% mark. do you think china could be the surprise catalyst in the third quarter? >> yoj we are going to get to the 8% primarily because manufacturing is heavy and decreasing share internal gdp. there are other parts of the market which are not doing so well. we have state tallies last night

showing an unusual drop in home prices in china. and this sector is here, it accounts for almost a third of chinese growth. so look at the negative outcome here, it can outweigh the gains in manufacturing. which means growth will be balanced better in the first half, but it's not going to hit 8%. it will be around 7.5%. >> do you feel more confident as the numbers flow through in china or do you think it's dealing with the books? >> on one side, it's better to see these numbers. at the same time, it does mean that they're not going to look to -- the economy any further than what they've already done. and i, too, have been very concerned about the expansion and story and how that deflates and how that's going to play out and how that's going to impact growth and what defaults we're

going to see if the can market does in terms of assets and the shadow banking. >> the question is whether the central bank ties the noose around some of these corporates will have high leverage in china or whether they allow the mainland to simply grow out. if the revenues coming in, sometimes they're not all that challenging. >> i think that the execution in china involves a lot of risk. but the debt has increased dramatically over the past years. overall growth in chinese debt, not growth, but levels over 200% of gdp, which is compared to what we see in developed countries. debt levels have been achieved in a short period of time, which means a lot of bad debt has accumulated. and we are seeing rising cases of default on year default among wealth management products, even corporate bonds. this is going to increase volatility in the past few

markets in china going forward. but it's something we have to live with. and the good news is that the government continues to put such a high degree of control over the economy. mostly they will be able to manage the volatility. >> appreciate the comments, darius. thank you to galtum who has been with us for the first half of the program. investors with insignia wealth. still to come, what about sprint which has put an offer on the table for t-mobile? we'll cross to paris after the break. is is.

u.s. markets have stocks close one of the worst months of the year. european markets follow suit. growth accelerates. however, china factories posted the strongest pmi figures in almost two years. in paris, the world's largest -- market bringing a top pricing environment. and t-mobile stocks, the

parent company deutsche telecom jumps at the open. more woeful news on the manufacturing front today and this time from the uk. one of the strongest economies in july manufacturing pmi has logged in at 55.4. that is the lowest since july 2013. so by comparison, this 55.4 is under the forecast. 57.3 was the number expected. also coming through under the numbers that we had reported in june. this is fairley hitting growth we had in the manufacturing sector. it does go to the heart of what we're seeing across europe where july hasn't been a strong month

for manufacturing across the board. let's take a look at the reaction and see how the response has been on the sterling. you can see we've twisted lower on the trade, down about 0.25%. the ftse, though, under a little bit of pressure. we were trading lower in the session. we've dropped on the back of this. just an interday trade here. there has been a slow grind lower. but the dax, one of the worst performers. we are tracking on the lows of the session now. but bigger losses, too, on the likes of the ibex and seeing losses in portugal today, as well. this should be a sign of confidence. french telecom company iliad has confirmed a bid for t-mobile u.s. following america's fourth largest carrier and nearly $30 billion. stephane, weigh in on this. the story was very interesting

for what iliad has done. despite consolidation across the industry, could iliad be a disrubter stateside, as well? >> first of all, bear in mind that t-mobile in the united states is twice as big as iliad in terms of market capitalization and five times bigger in terms of revenue. so that is an expensive and a very big target for the french company. it's true that india in france really is disrupted or introduced some new things in the telecom market. it's the one that introduced in france the boxes providing not only telephone, but internet and television forcing its competitors to do the same thing it's also the one which slashed the price of mobile telecommunication necessary france. there is definitely a margin to lower the price of mobile phone

communications in the united states. and that is perhaps what iliad is planning to do. now, the french company is offering $33 per share for t-mobile in the united states. 320 if you take into account the impact of the cost reduction plan, the cost of savings plan. so 36.20, that's 42% premium in the last price of t-mobile. but it remains below what sprint is offering at roughly 40 per share for the french company. although it paves the way for a bidding war for t-mobile. it's less than what stage is offering and that's perhaps not enough. >> if you look at it from a shareholder's point of view. >> stephane, thank you very much. one of the big ticket items is, of course, the u.s. nonfarm payrolls report due out at 8:30

eastern. gains are expected for a sixth straight month. following a 288,000 print back in june. unemployment is expected to remain steady at 6.1%. but the data has been very patchy this week after strong gdp numbers of 4% in the second quarter. robert walters, one of the world's largest professional equipment consultancies to a pretax profit lies 36% in the first half of the year. this on the back of strong emerging market growth asthma labor ya and thailand stand out performers. a lot of question marks about jobs stateside and

internationally. >> you have to look at it -- china, you have big wage inflation, anything from the professional marketplace. that's been the case for the last four years. financial control in china more than they're paying for financial control in london. i probably shouldn't say that, but anyway -- apart from that, we're not seeing inflation -- but it will happen in the uk next year. >> why are we seeing such a lag between the economic growth story and the wages matching up, particularly in these skills? >> you've got to marry it back to confidence and the ability -- willingness of people to move jobs and the willingness of people to hire. that's when it kicks in because, obviously, it's fought going to happen until you do it. so, okay, i'm going to move jobs, how much? the shortage of professional staff and accountantsy, legal, the traditional professional discipline has been a -- is aggravated. i've been in this game a long time and i've seen it every single time.

into law firms, accounting firms, and it's going the provide a shortage three years down the line. there will be wage inflation. we haven't seen it yet, we will see it next year. >> when you think about a financial crisis we had, you think that then the jobs start to come back. there's a whole bunch of skilled workers out there. you took some time out and are ready to reengage with the workforce again. you don't seem to think so. >> no. i think two things there. one, citi has been notoriously a volatile animal. and when it does come back hiring, it hires in droves. so there's a sort of massive demand. people -- unfortunately when companies hire, they want to hire people that are in jobs, not out of skrobs. that puts pressure on an already skeleton-like group of people.

>> if there was one factor that saw wall street lag it was around the wage cost index. this has been something that hasn't been a feature for many markets post financial crisis. as we come up to the nonfinancial payoffs, are we starting to see a game changer here and the job market is recovering strongly? is it going to be a surprise factor for the fed? i know it's a slightly small operation. what are the trends in your business telling you? >> well, again, it depends which -- on the learning in two cities in the u.s. -- >> it's a bit of a stronger -- >> yeah. but san francisco, it's all private equity, mobile phone engineers and all this kind of stuff. that's a very specific market. new york e new yorkers -- we're seeing both improve. i would expect that to continue to improve. once you have, it's almost

inevitable. once you've had five years of slow growth or whatever the session, whatever you call it, so we're very confident actually not just about america, not just about london, but about other places, as well. like australia, which had a tough time it looks like recovering. >> we hear economists talk about the notion in china. as you point out, you must have your own view on how close that is. do you think it's a bit like talking about peak oil? is it something that's out there on the track or are we getting closer than we think? >> you've got demographics here happening. you've got university fees in the uk happening. the number of people who can do the jobs that need to be done in the professional space. and we see this in japan where there's a massive demand for international people.

it's the only real noncyclical part of our business, actually. so i think we are in a place where full employment, probably full employment in what sector? 12k3w4r full employment to the point where it's going to push up interest rates in the u.s., the two most dominant ones where we're seeing pressure already. >> it's going to happen, isn't it? i think so. >> i hope so. thank you so much for joining us today, robert walters, the ceo of robert walters. argentina's stock markets fell more than 8% yesterday on the company's second default in 13 years would destabilize the economy. president christina fernandez

gave an emotional speech down playing the impact of the default. >> we are here on the 31st of july and the world continues. and so does the republic of argentina. which is very good news. tomorrow is the beginning of august and with that we can all continue to live our lives as we have in these last years in the republic of argentina. ewe crepe's parliament has rejected the resignation of the prime minister. they have now reversed that decision. meanwhile, sberbank is 105 banks that have now been named on the eu sanctions list. it is russia's largest lender, earning more than 50% of the country's banking assets. the lender says it can fulfill ought all of its obligations

despite the restrictions. this week, we've been asking ceos across europe about the impact of revenue sanctions against russia. the ceo of michelin said the company remained exposed to do region. >> we have a business in russia, we have a business in eastern europe and we're very happy with that business. we have to recognize at this point volatile. and i really hope in the coming months or years, we should be able to standardize all that. we are free traders, you know, at michelin. we like free trade. and we act in that direction wherever we can. in the banking space, french lender socgen which has significant operations said while it had performed well, they would comply with sanctions. >> in russia, you've seen an escalation of tension, new sanctions. but we continue to take

advantage of the banking market. while having strong outrisk, we are -- the current second. >> it is a delicate balancing act while complying with sanctions. sergio mohi said the bank would remain committed to its russian clients. >> we have to respect any sanctions that will be imposed, but we're not going to go and discriminate against any clients. i think we are committed to the russian market and the russian clients. >> the only thing i can say on that is we wish the situation stabilizes and that this population can get much better situation in euro countries for

the future. it's impressive to see how much these people are suffering. it's impressive to see what's going on there and how much, you know -- is there for these people. >> an explosion in taiwan caused by a gas leak left 25 people killed and about 270 injured. the series of blasts were so powerful that they overturned cars and ripped roads. but the cause of the leak remains uncleaver. this is not the first time the town has experienced a fatal blast. in 1997, an explosion killed five people and injured around 20 when a road construction crew hit the gas line. israel and hamas have agreed to a three-day truce. however, israeli prime minister benjamin netanyahu said he will not halt operations in gaza until all tunnels built by hamas

have been destroyed. martin fletcher has the latest. >> attack tunnels, hamas's secret passages to pen trade israel and kill and kidnap israelis. here, three days ago, they surprised soldiers at an army post and killed five. the tunnels are hard to find. 45 feet deep down here. concrete arches, electricity, telephones, almost six feet high, more than two feet wide, hamas has built dozens of them. the army wants time to destroy them all, 32 pounds so far. so this tunnel in this direction goes one mile, more than a mile into gaza. in this direction, only a few more hundred yards, israel. it comes up inside an israeli -- in the farming land. israel was this close to another tragedy. >> clearly wanted to throw up.

>> riyah lives a mile from gaza. >> say okay, we can live with the shelling. but not with the tunnels. >> her friend came back last night after three weeks in the north, sheltering from the rockets, terrified of the tunnels, but her kids missed home. >> exciting with lots of fear, you know? that's easy. >> this morning, trying to make it easy for the kids who stayed, because as always, fear of rockets and now the tunnels will hamas fighters suddenly pop out of the ground? and the boom of israeli guns firing into gaza. >> so people ask me, how you raise your children here in that place? it's my home. oh, my god. you see? come back to this, i don't like. this is -- but we'll get used to.

>> but the guns may fall silent in the morning. hamas spokes people say hamas has accepted the latest cease-fire proposal to last 72 hours come tomorrow 8:00 a.m. local time. it appears israel has accepted it, too. so the two sides should meet tomorrow in cairo. we are seeing a fairley sharp sell-off across in the morning sessions, particularly for the likes of the dax, down 1.9%. markets have shown a strong contraction from the growth rate that we posed in the month of june. so don't forget the germany, the uk, french, just coming off from the highs. the markets today are selling right across the board. you can see, by sector, some of the selling taking place in the auto space in particular. basic resources, as well. we'll be right back with more

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welcome back. the stoxx europe 600 barely hanging on to much green. you can see futures remaining

with companies showing any strengths. so we are down 1.2% now. the benchmark index. you can see a lot of the selling coming from peripheral markets. in fact, i should point out the declines we're seeing just lately taking us back in danger of reclaiming levels we haven't seen since april to the down side. we are seeing a pretty grim month. money is usually taken off the table at this time of the year. the dax, one of the worst performers. but it is portugal that has taken the cake today with that slide of 3.3%. this is where some of the selling also really took hold. you saw the s&p 500 post its worst day of declines since april. first monthly drop since january. right below the 30-day moving

average. and this has questioned the short-term momentum now in the stock market. down 2% by the close. a bunch of different factors have been cited. the money wasn't going into bonds or gold, for instance. elsewhere by sector today, i mentioned autos right at the bottom of the pile, down 2.7%. and the numbers for europe have been coming through slightly stronger. construction material now taking over. to the upside. if you can call that today because it's still tracking lower. food and beverage, the most contained sector here in europe,

off 0.6%. the question is how do you make money in these turbulent markets? here is what the experts have been telling thus morning. listen closely. >> whoa, really? >> the corporate bonds. >> are you sure about that? i'm terrified by corporate credit at the moment. >> well, with the safe insurance risk, not market risk. but that's pretty much what we do. we have a bit of property in there now to look after you need our customers in the long-term here. >> over the short-term, i would agree with that. i think that the sell-off of the last few days is overdone.

and i would be looking at equities regaining over the next few weeks the highs of the july period. >> we thought we'd really turned a corner here. we actually started to perform and not just seeing in terms of color, and then start coming through. so this is a very -- situation at this point in time. it's up a few frangzs elsewhere. >> you've got to wonder what a good day would have been for axa, because the company is at the top of the cac today on the back of its earnings. would it have been much stronger with the market moving to the up side? very high double digits to 3 billion euros driven by strong earnings growth and lower interest rates on its financial

impacts. it was claimed the company had been well prepared for a series of natural disasters. >> natural events have been higher in the first half than what the average in general is. this is due to the hail storms you've had, not only in germany, but also in the uk, in france. it had a cost for us. but it's also the business venturers to pay for such claims. so it doesn't worry us more than necessary. the reserves have been taken for that, so we do not expect any deterioration related to the first half year events we have in the second half. but we have plans for that every year. so it's not something which is a

worry as long as it stays within the long-term average. on your question related to pricing, it is very clear to us that if you take a long-term view, given the general -- in global warming, i mean, what people call webb of change, there is a tendency of prices in housing in particular to increase. this is just a reflection of the fact that damage is higher and higher from one area to the other. >> let me show you how we are shaping up across these markets. it's been very weak after we got the pmis today. the manufacturing numbers selling a slide from the growth rates we've experienced in june. still growing for italy, germany and the uk. france manufacturing below that 50 handle, 47.8, that's not confidence across these markets in addition to weak inflation this week. but it is about the u.s. picture today. we are waiting for the u.s. nonfarm payrolls to report.

the data has been -- a lot of price action out there this week. the expectations there, about 233 jobs likely to have been created. the unemployment rate steady at 6.1%. numbers will be negative the markets again and you can see the caution shaping up stateside. we'll be right back after this.

welcome to with "worldwide exchange." i'm karen cho. can the u.s. jobs data reverse the trend? six straight months of nonfarm payroll growth is expected ahead of today's reporting. a bidding war for h-mobile in the european telecom sector. parent company deutsche telekom jumped at the open.

shares in arcelormittal cuts outlook after shares look at a cost cutting environment. >> announcer: you're watching "worldwide exchange," bringing you business new from around the globe. >> if you're just tuning in, thanks for joining us. here is how markets are shaping up ahead of the u.s. open this morning. it is looking a little bit softer, no surprise after a choppy day of trade yesterday. and european markets are on the back foot in the morning session here. you can see this is the finish on wall street. some numbers that really rattled the cage of some investors, the s&p, the dow having its first monthly loss since january 2014. the nasdaq is worth a decrease since april. a question about whether the

winning streak has been broken. it wasn't as though money was goggles where to some of the safe havens. so question whether the daddy today would change the sentiment. if the numbers come through weak, would that be good news for the markets? a lot of people are bringing forward the interest rate expectations around policy action by the feds. elsewhere, we move on to european markets. you can see how we've been trading here. stocks down more than 1% on the major markets. the ftse taking out a lot of the gains will head throughout the slightly warmer months. the xetra dax centers at 2%. earnings not helping out the french markets, as well, and the pmis have been down across the charts. uk, france, italy and germany all falling from the june highs, but it remains in contraction territory. the stock market on a down day, this is what it looks like.

the stoxx around banco espirito, not positive for that market as you see a sell-off. foreign exchange markets, is it a u.s. dollar story again? here is a look. you can see the strength playing out here. the euro as a result on the back foot. you've got the japanese yen very close to that 103 handle after a significant gain to the u.s. dollar has made to the japanese yen. and on the back of that uk manufacturing number, which was quite a surprise given how strong the economy has been here and the investment had been going to the business side on the economy. the pound as a result has taken a bit of a loss, about 0.3%. a lot of excuses now starting to fall. on commodity markets, too, just a quick check. i want to point out, despite the geopolitics in the background in the past few weeks, we still saw wti at its lowest close since

march 17th, down 6.8% over the course of the month. gold not a safe haven, either, down 3% for the month lifting off some of the lows this morning. but it is below that 1,300 handle. let's go out to lance roberts, chief strategist at sto wealth management. i'm attempted to say houston, do we have a problem here? >> not just yet, but the interesting thing is that data is a little bit weaker than what we would expect to see at this point in an economic recovery cycle. so if you look at what's really happening on kind of main street versus what's happening in terms of the global economy, you are seeing a lot of weakness in termsz of the consumption side of the ledger and an economy driven almost 70% by consumption, that is important. >> if consumption is so weak, why are we seeing the gdp as it is? >> that's a great question.

if you look at gdp in that 4% print, first of all, i think that's going to be revised down here over the next couple of months. but almost 1.6% of that number is inventory bills. really quick sales, those are down over the last quarter as well as growth message income which ticked up slightly, but over the last couple of quarters, that's in a decline, as well. levels normally associated with very weak economies, so the income side and the final sales side of the gdp report is on the government spending part and the component of inventory rebuilds. >> lance, i've been waiting for a lot of reresearch. what crops up is that a lot of excuses for the reasons why we shouldn't be lifting interest rates anytime soon. but if you look at the market reaction now, investors are concern about the timing of an

interest rate hike. do you think those concerns are misplaced? >> no, no, not at all. i just did a study recently on my website talking about the effects of fed interest rate hikes over time. from the time that the federal reserve begins raising interest rates, it's typically about 18 to 24 months before -- over the last 70 years that we've either had a severe market correction, recession or both combined. so remember, interest rates, hiking interest rates slows economic growth, it raises borrowing costs. so people that are very concerned about the weakness in the housing market, the last thing we really want to be is higher interest rates because that impacts the housing market almost immediately. so i think it is right to be concerned that the federal reserve may be jumping the gun to raise interest rates too soon. >> i've got to ask you about the wages that we might see today. because one of the catalysts to some of the concerns of markets yesterday was these higher labor costs. the biggest gaper more than 5

1/2 years in the second quarter, an indication that there might be a bit of wage pressure. but this is a market that's been saying where is the wage growths? where is the increase in earnings that's going to justify the higher spending and encourage the corporates? >> right. that is one of the key components we need to be looking for. because that jump in employment costs yesterday was a bit interesting. there was a couple of impacts coming in to employment costs that are outside of the wage factor. higher health care costs from the onset of the affordable care act. and also we've seen some rising taxation and other issues that are kind of feeding into that, as well, in terms of that. so we really want to look at hourly earnings as well as the number of hours that individuals are working along with most importantly here is how many full time jobs do we create? last month, we saw a drop of almost 500,000 full time jobs, an increase of 1.8 million

temporary jobs. we need to see the full time jobs created. >> and that is the catalyst a lot of investors look for when they point to a lasting recovery. lance, a lot more to talk to you about regarding your views there. get in touch if you have comments or questions. @cnbckaren is my direct handle on twitter. later today, jean-claude tree hey at 16:40 cet if you want to set your clock. what will he say about the eurozone after these weak numbers have been coming through? stay tuned because the federal reserve bank of dallas head richard fisher joins our colleagues around the desk at 1300 cet. a check off markets, fairer across the board. we're not seeing much of an improvement. 1 plus percent for the likes of the ftse.

this could be having a bit of an impact. we're now pushing past the 2% mark to the xetra dax. the ftse mib is playing catchup, down 0.25 earlier, and now shooting past that 1% mark to the downside. collection is here. ♪ ♪ during the cadillac summer's best event, lease this all new 2014 cts for around $459 a month or purchase with 0% apr and make this the summer of style.

these are your headlines today. argentina and the fed -- u.s. markets as europe continues to sell off. could u.s. jobs reverse the trends? solid gains expected for a sixth straight month. and goprofiles a big loss as costs weigh in. the july u.s. jobs report is due out at 8:30 a.m. europe. solid gains expected for a sixth straight month. following a 288,000 print back in june. unemployment is expected to remain at 6.1 is%. staying with us out of houston, lance roberts wealth management, lance, i want to pick up on. >> of the points you make in your employment research. you point out that despite the strong gains we've had recently, that the working age population gains have outpaced the gains they've made in the employment market since the crisis.

but how much and how big a concern is this? >> well, it's a fairley big concern because a lot of the analysis that we talked about and, of course, the federal reserve itself is really banking, you know, on this idea of this return to full employment, which is why they're going to start raising interest rates. when you are simply hiring at the rate of population growth, and really no more than that, what that tells you is that corporations are simply hiring enough individuals to deal with the incremental increases of demand simply caused by employment growth. they're not really reaching out and hiring a lot of individuals in anticipation of the stronger economic growth cycle. that's a real concern here because the fed is suggesting that by the unemployment rate being at 6%, that we're back to full employment. but we're almost 90 million people, so outside the labor force and, really, the fact that the people that have fallen off the roles account for the unemployment rate, it could be

deserving about the risk rates of the employment cycle. >> i was talking to robert walters before and he mentioned that he thought many graduates were not being hired by corporates, there ever, the skill set is simply not there in the working population. >> well, there's two big problems with that actually. yes, when you look at the millennials, those young college graduates, half of them are sleeping on their parents' couches. that's obviously not what we need in terms of creating a more virtuous economic cycle. the household formation issue. that's the key here. the problem is with them sitting outside the labor force, they're using relative skill sets which makes the structural unemployment problem we have in the country right noe now even more dangerous. because the longer people sit outside the labor force, the longer and the more skills that they lose. >> you mentioned very strong comments, too, about the baby boomers because there has been a theory that some of these people are simply not re-entering the labor force because the

participation rate has been impacted. but you point out that they don't have the funds to sit, either, on the sofa. >> yes. more individuals over the age of 65 are working than ever before in history. why is that? when you look at the fact that 77% of the population basically lives paycheck to paycheck, there's really not this idea that there's all these individuals that are going to move into retirement at 65 and be happy and live on the retirement at the beach. the reality is that most of those working age and older than working age individuals are still having to work to maintain living and it's the people over 65 aren't retiring, it keeps jobs from being available from the millennials that need those jobs. >> that does make sense. thank you very much for joining us, lance roberts. we're going to continue the conversation. in the next half hour of the program, so stay tuned. that's plenty more coming up around gopro which takes the

plunge after hours. you get a snapshot of the wearable cameramakers first results in going public. here is is a look at heat maps across the markets. the tone has been negative. we're trading down 1.2% selling right across the markets in particular the german stock market.

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here is a look at futures across the charts. this follows losses across europe in this session inspired by some of the pmis that caused acceleration as we've pulled back from some of the june levels we've enjoyed in these markets. we have the u.s. jobs report front and center today and how that hits the tape is going to be very much seized by the markets as a sign of confidence or perhaps negative interest rates are going to potentially be going up sooner rather than expected. i mentioned the european markets and if we can take a look at how we are faring, down 1 purs pleas on the ftse. the xetra dax has been down 2%, lifting off those levels. the cac 40 off 1% and the italian stock market also showing lows today after we saw,

again, the italian manufacturing numbers. 51.9 is the read down from 52.6 in the month of june. tesla says it expects production to -- the company lost 61.9 million in the second quarter, but nearly doubled revenue to $769 million. elsewhere, linkedin sunk to a second quarter loss. probably due to acquisition costs, but the social networking site lifted. lingedin now says it what the has 31 million members. the shares up as much as 15% in after hours trade. gains in frankfurt, 4.6%. not easy in the market up there. a wipeout for gopro.

shares sunk in extended trade after they posted their first earnings report as a public company. seema mody has more. >> gopro, best known for its high definition camera, reporting second quarter results and it was a beat. 8 cents versus an analyst estimate of 6 cents, revenue coming in at $245 million. that's an increase of 38% year over year and that, too, higher than what the street was expecting. but shares taking a dip after hours. analysts say the bar that high, the stock has gained nearly 97% since going public in late june. on a conference call, founder & net woodman talked about how gopro is increasing its use. it launched the gopro with microsoft. it launched the gopro channel on pintrest which has more than 16 million users. nick goldman said the number of

gopro videos published on youtube up 160% year over year. but shares again moving lower. some analysts say they were expecting a bigger jump. the management on the conference call did reiterate its strong focus on international growth, saying there is a massive potential in business opportunities overseas. guidance did come in better than expected the the cfo expects a seasonally strong second half of the year with third quarter results coming in above consensus. from the nasdaq market site, i'm seema mody. >> questions around this company helping us to wave through some of the moves. joseph shuster, what is your view on this stock? it came to the stock market in a blais blaze, but now investors are starting to question what type of company it is and what its prospects are. >> yes, good morning. another price that's ahead of itself right now, the numbers

were slightly better than expected. however, the company says it's valued at 5 to 6 times the hardware entry. but it's at a media company, a social networking company. it's time to take some profits here, but nevertheless there's an underlying strong business model in the next thee years. >> this is one of the conundrums for investors. should it be valued as a media company or should it be valued as a hardware company? gopro claims it has about a billion views. some people are saying this is like nikon, the cameramaker, basically claiming just because it has lots of videoes and photo shop on its camera it is a media company and we know that's simply not the case. >> that's true. again, as the market gives the benefit of the doubt now, the media company level, however, it's a hardware company probably two or three times sales.

so this stock at 47, 48 yesterday before the numbers. it looks like highly inflated right now. >> joseph, the revenue numbers do give some indication that came to the market, the listing had sweetal revenue growth of 160% coming up at ipo, which suggests there is some cash coming through the door. how does it monetize this to justify the valuations? >> monetizes the media content right now is a big, big challenge for the company, how to extract value from the software sales or from the youtube, from the partnerships, like an apple alliance. the company has not given any details and how it wants to extract and monetize value from this activity. interestingly also that the growth margin for the hardware

bit has been coming down, declining from 57 to 30 in the past years and this reach increasing across margin actually for the hardware. this is coming down in the future. >> we heard recent comments from janet yellen pointing out about the markets out there in some of these i.t. stocks. do you think that is why this particular company has enjoyed the heights it's had after the ipo because investors simply want to get on board some of these media stocks? it should actually be justified. >> well, a little more than a month ago, particularly for the strong high growth, great bond ipos to trade afterwards. to the upside, short selling. little information there. there's a lot of information in the stock. no surprises up 2000 actually

have plunged at the same time. i think it's a risk for the stock here is more i believe there's going to be a secondary offering coming and to the degree that the market is able to observe this secondary offering and then hold the stock price it will simply depend on the stock will trade accordingly. >> it's an interesting shot we're seeing there of a lion hugging a man raurn mauling him. i don't know. perhaps that's how the market has been feeling about this stock, a big lion cuddling this market so far. thank you so much, joseph shuster. tune in at 8:00 a.m. for a discussion with nick woodman, the founder and ceo of this company. i want to take you through some interesting flashes across the

wires this morning. after the down of the malaysian aircraft in ukraine, there are concerns about the risk out there. we've had a flash across from the european aviation agency warning of flights in libyan air space. this on the back of evacuations by embassy staff. so potentially aviation authorities are now taking a broader view of risk across air space and this has been the latest warning. market action, you can see we are called over. a little weaker across on u.s. markets as we see widespread selling so far across the markets on the back of data today.

welcome to "worldwide exchange." i'm karen cho. the sell-off hits europe as manufacturing data pushes all main incidentsies into the red after u.s. stocks saw one of the worst months of the year. can the u.s. jobs data reverse the trend with six straight months of nonfarm payroll ahead of the day. a bidding war between mobile stocks price actions in the european telecom sector. iliad dips into the red. shares of arcelormittal trading lower in europe after cutting zout look citing a tough pricing

environment. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> if you're just tuning in, thanks for watching. here is how markets are shaping up ahead of nonfarm payrolls today. we're watching the data very close. so far, the tone has been negative. it's been a bit of a patchy week for u.s. markets. the sell-off yesterday was fairley extraordinary, as well. we took these markets to their first monthly loss since january 2014. question marks about the short-term momentum now in the s&p 500 after a fall yesterday. but the data could swing the balance today. too strong, the market might say this was negative for the picture. the numbers come through weak, the market may be saying stimulus. europe is taking stock of its own problems. we're seeing weak pmis.

allot across the border here. france, italy, germany. however, that said, most positive territory, it's still contracting with a 37.8 for the pmi range. that, of course, down from the 48.2 posted in june. markets taking this on the chin. the xetra dax down 2 plus percent now. it's portugal that has seen the strength of the sell-off in a down day. this as you've seen a lot of concerns in the previous few weeks around bankers, the largest bank in portugal and how opaque the transactions have been with the holding company. meantime, the big question is how do you make money in these turbulent markets? here is what experts have been telling us this morning. >> bonds. >> whoa, really? >> the corporate bonds. >> aren't you scared about that? i'm terrified by corporate credit at the moment. >> well, take insurance risk he,

not market risks. that's pretty much what we do. we have a bit of property in there now to look after our customers long-term. >> over the short-term, equities are doing quite well. as you were just saying a few months ago, i would agree with that. i think that the sell-off over the last few days is overdone. and i would be looking at equities regaining over the next few weeks. the highs of june, july period. >> we thought we had really turned the corner here. we thought market numbers are starting. they start to perform and that's not just recovery, it's starting to come through. so, you know, this is a very strong specific situation at this point in time. but they start to offer up a

few -- elsewhere. >> potentially, opportunity. it depends on how you read it. let me show you what the picture looks like for payrolls today due out at 8:30 eastern. we are expecting a sixth straight month of gains. the forecast for 230,000 in the add for the nonfarm payrolls, following 288,000 in the previous month. the unemployment rate likely to be steady at 6.1%. the global head of fx strategy and head of fixed income begins. you've got bull horns on. do you think that the jobs number will be higher and the jobless number lower? >> yeah. we think the labor market is really accelerating here and, therefore, we think it will be both on the employment gain and have a lower unemployment rate, as well, 6.0%. so that is a really, really important number. and i think it's also crucial to watch how the market takes it

because we're starting to see interest rates rise in the u.s. the equity market is not likely in the last few days and it's crucial to see whether we continue to have more on this upward pressure on raits that really puts into question this low volatility environment. we have gotten used to over the last several months. >> we're seeing a lot of blowout figures, though, from the states. the growth figure, the gdp numbers at 4%. what if you get a number below 6% on the unemployment rate. surely that will be an absolute game changer for the market in terms of interest rates. >> i think you're right. if we start to see a five handle on unemployment rate, then we really get into the territory where the fed will have to potentially consider raising rates quite soon. and i think the next fomc meeting is crucial in the sense that the forward guidance that they've had in place where this essentially promised to keep rates closer for a considerable period of time, that potential

we have to revise and that's when we can see some volatility in the market and the dollar could potentially gain substantial on the back of that change in fed communications. >> what do you make of the indication and the chose your we've had so far from the jobless market? the adp numbers were fairley strong, but if you look at the initial claims, just looked patchy in the past week. the trend seems to be suggesting the jobless cue is coming lower. does that give you an indication on the print? >> well, i would say if you look at the trends in the labor market over the last three to four months, they are consistently strong. obviously, adp yesterday was not right at the high, but we've seen, but the broad trend is very, very clear. and that is really what we expect to see coming through the numbers today. but even if we have a 200,000 numbers, that wouldn't be the end of this good patch of data. i think the underlying trend in the economy is 3% or above now and that really is what matters for the outlook.

>> the market very much watching wages after we had a slight increase in the wage cost index yesterday. so this would be the catalyst. but also in terms of market reaction, you are watching the short interest rates further on the move. just how much have they moved and what's the signal that they're sustaining? >> well, so we're starting to see essentially the marketplace of probability that the fed could raise rates already in march next year. so that is something new. and in addition to that, there's a question mark about, okay, this extremely low interest rate environment that we've had now for five, six years is really going to be sustained. question marks around that, you're going to see short rates rise and that really has implications for the yield curve, for the dollar, and for risk assets. and that's what we're seeing in credit spreads, that's what we're seeing in equities over the last two days. >> every dollar trader has found traction all this week in the course of the month, the rally

has been ordered 2.1% in july. asset classes have been moving south to suggest money has been marching into the dollar trade. does that just cause a few question marks for you, then, ahead of this trade? is it worth buying any more dollars at this point or could there be room for disappointment? >> yeah, i really think that this is sort of a more strategic view to have. the dollar is likely to gain strongly over the next three months, potentially the next three to six months and, therefore, i think you'll want to be in this trade for the longer haul. i think it's also worth pointing out that the capital flows that you allude to coming back into the u.s., that sits in a global picture where less money is coming into the eurozone. we had a recovery trade that was going on for a year. that recovery trade has now reversed and we're starting to see much less money coming into the eurozone and some of that equity capital coming into the u.s. instead. >> just a quick one on that.

you've seen rising recently about some of the bubbles created, stock bubbles being forced by central banks. how busy do you think the central bankers are on the equity market? does that give us a false sense of some of the gains that might still be ahead of us, that the central banks are buying stocks ahead of u.s. currencies like the u.s. dollar? >> i think what the central banks are doing in terms of their management is very long-term trend. so in the short run in terms of the volatility around the number today, it will certainly be the private sector that dominates. >> thank you very much for that, jens, global head of fx strategy and fixed income research at nomura securities. later on today on "squawk on the street," we've got an interview with the ecb president jean-claude tree hey at 10:40 a.m. eastern. that could interestingly shed some light on those pmi numbers coming through. is this a turning point again for another dip across the eurozone or is it just a little bit of a one step forward

two-step back story? so wade into is that conversation. the federal reserve bank of dallas head richard fisher joinsous colleagues around the desk at 7:00 a.m. eastern. on the corporate side, the french telecoms company iliad has confirmed a bid for t-mobile u.s. valuing america's fourth largest carrier to make $30 billion. stephane, iliad has proved a game changer in france with its low cost model. could it doe the same for the states? >> the company will try probably since there is some large -- in terms of openings in the united states. in france, the average revenue peruser is much lower than what it is in the united states it's a low-cost model that iliad wants to export to the united states. the head of the french telecom group iliad is seen in france as we see one of the new capital reasons, it likes to present himself as a troublemaker of the telecom industry offering new

products, in france, forcing its competitors to do exactly the same thing. and recently with the launch of free mobile has slashed the price of mobile phones in france, again, forcing its competition to enter a price war. that is probably the model it wants to export to the united states. can iliad afford such an acquisition inspect that's the question mark. they're in line, but t-mobile is much bigger than the french company. remember that iliad said yesterday it's willing to -- in that acquisition. >> more on the iliad, the ceo was previously a man that started up the sex chat service. can you put a bit more color around him? in that's how he built his

fortune back in the '80s and '90s. he had a kl company running services that what we used before the internet is the symbol of the french capital and all the typical -- in france because he's a self-made man. so that might be the -- in the united states. but in france, there are not so many self-made men. that's perhaps why he is an icon. french capitalism. a lot of americans might think that's a bit of an oxymoron. does it actually exist? >> it exists. >> all right. interesting to note. a hefty price tag, no doubt. let's see whether he can take on the u.s. telecoms market. plenty coming up in the show. we're going to go behind the big. the big automakers report july sales today and the month is expected to go into the books as another stellar period for the industry.

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over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening. they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide that immersive digital capability. give fans more then just the game with the ibm cloud. the ibm cloud is the cloud for business. these are your headlines today. argentina and the fed spoox u.s. markets as europe continues to sell-off. could u.s. markets reverse the trends? solid gains expected for a sixth

straight month. and gopro sees costs weigh in. >> interesting comments coming across the wire in malaysia. this as one of the russian banks on the sanctions list with prohibitions on the raising funds in western capital markets. and the latest is msci considers removing vtb bank ruble shares from its russian index. so retaliation by one of the index trackers. it has a removal on any equity issue and plans to launch new indices to scloous exclude russia. so take into account the actions from msci, it says, though, it will keep roznet, it will keep russia's index at the moment, but vtb will be one that it will consider removing. interesting now it's looking at

reshaping the markets because of the inability for some of these to raise funds on markets and other flashing companies are seeing sanctions which stop them from doing business with the west. so this has been one of the early fallout effects we're seeing just break across the wires today. auto a different note, the big automakers report july u.s. sales today and a mounting over calls in higher gas prices are not expected to put much of a dent in the numbers. let's get out to jackie deangelis w at cnbc headquarters with more. jackie, take a stock of some of the numbers coming out recently, automakers, it's not so according to this report. we might see some strengths today. >> yeah. that's exactly right. july is expected to go down as another stellar month for u.s. auto sales. analysts are forecasting that total sales will come in at 1.45 million cars and trucks, roughly 11% higher than a year ago. that would mark the strongest july since 2006. now, edmunds.com says shoppers

are looking past news of recalls and higher price e at the gas pump, finding incentives and affordable interest rates to make it easier to buy a car. july is typically one of the stronger sales months leading up to the peak in september and october when automakers switch to the new model year. after a shaky start to 2014, kelley blue book says the industry now appears to be on pace to sell about 16.3 million new vehicles this year. that would be about a 5% increase from last year and it would mark the fifth straight year of increases. now, true car says july may be fueled by sweet sales. these are vehicles sold to government agents, rental agencies and other firms that buy cars in bulk, typically at a discount. they're expected fleet sales to rise to 13% of all sales in july. so who is the market leader in july? that could be chrysler. the company just releasing numbers with sales up 20% led by

its jeep and dodge truck brands. gm is expected to be the biggest seller by volume with sales forecast to rise 10% despite recalling about 30 million cars since february for a host of problems. analysts expecting ford sales dragged out 9.7%, another month of strong results. industry wide, it would be good news for the u.s. economy, as well. the company says auto sales were a major contributor to the 4% gain we saw in second quarter gdp. karen, back to you. >> jackie, we've been talking about a stronger economy and i can't think of anyone you know who has bought a car recently. can you think of anyone stateside, any of your friends and families who have purchased a car? >> yeah. it's interesting. the cycle is towards upgrading because the doors are so much more fuel efficient and so much more advanced. i am finding most people who have older clunkers are looking to upgrade. it does seem to be in line with the trend. >> jackie, thank you very much

for the update there. let's take a look at some of today's top earnings stories for you, as well. tesla's expanding sales in china and research and development on the electric carmaker's model. tesla earned 11 cents a share beating forecasts as revenue grew 89%. the company delivered more than 7500 sedans, cutting its delivery outlook as it retooled the factory. it expects to ramp up production in the second half of the year. this is how tesla shares have been fairing in frankfurt today, sliding with the rest of the market. down 5 plus percent. linkedin swung to a second quarter loss due to acquisition costs. the professional social networking site earned 511 cents a share, easily beating forecasts. as revenue rose 47%. linkedin says it now has 313 million members, yes it's 330 million members and mobile devices account for nearly half

of that traffic. the company expects strong fed quarter driven by a rapid rise in its hiring business. shares rose as much as 15% in after hours trade and about 4 plus percent in frankfurt. eeking out gains on these very weak european markets today. still to come on the show, futures are indicating a sell-off could be set to continue stateside. so how should you be positioned? we're going to cross to the cme after this break to get in touch with the trading session. y for defending our country. thank you for your sacrifice and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely thankful for many things, the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life.

manufacturing numbers weaker for uk, france, italy and germany, taking these markets in particular the xetra dax down plus percent. one of the worst performers of the core markets.

you about it is the portuguese stock market that has dropped to the bottom of the trading session here in europe. now, u.s. futures are suggesting to come from the back of the data that saw some fairley hefty losses. the monthly loss, the first loss for the s&p 500 and the dow since january, so since the start of this year. so just a tad nervous today. joining us now is scott selety from tjm investments. scott, great you have to on board with us. it could be a trigger happy day today when we get the u.s. jobs report. how are you feeling ahead of this key release? >> well, i mean, obviously, with what you've got happening in europe, looks like we're going to have a 1% or 2% day in the beginning to the downside. but you don't have to look far to look for some reason to get out of your stock holdings and i think that's what's happening in the markets right now. if you see a stock numbers, you're thinking maybe we're going to see an interest rate

hike sooner rather than later. but at the same time, if we're going to get some weak economic figures, more and more folks are paying attention to the fact that some of those figures are weak and they're getting out of stocks because of a weak economy. bad pmis in europe. so there's a couple of things here and it's got folks in there a little bit nervous. let's look at the perfect storm we've had over the last few days. we had the argentinian default, i think the sanctions that europe put on russia and, as well, the u.s., because we have such a big trade in russia with europe, if europe starts to have a tit for tat with russia, that could be a big headwind in the u.s. because that could slow down europe even more and i think europe is slowing. that's one of the big reasons that we saw the sell-off here yesterday. and also i think with that gdp surprising everybody at 4%, how do we have a 6% turn around? i don't know. but that gdp number suggesting rates might come up sooner rather than later, as well, those things lend to that

sell-off yesterday and it's going to be interesting to see if we get a great jobs number how the market takes it. i think it takes it badly. >> taking place in the markets, this has been the season kral that were just a little postponed because we have the eeb and the from the rest of the markets, this is now an index stateside that is seeing some downside pressure. >> yes, it is. but, you know, it's okay for markets to go down. you know? it's not the start of something big all the time. we can have a little bit of a correction and i think that's going to be healthy. and i think a lot of guys have been calling for one. maybe this is it, maybe it's not. we have seen some money exiting with the mom and pop coming in and that usually gives us a short time high, too. ultimately, stay long stocks and stay long bonds. you'll be all right by the end of the year. the dow is back to zero on the year. we have room to run. thank you very much for that, scott. tjm investments. stay tuned for coverage

around payrolls. i'm karen cho. thanks for watching "worldwide exchange." i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2.

good morning. jobs in america, the countdown to the july employment report started. should the markets expect another big jump in job creation? and tons of cool video. a rough ride from go pro. should investors take a leap of faith with this stock? it's friday, august 1st, 2014, and "squawk box" begins right now. good morning, everybody.

welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin and steve liesman. joe is on vacation this week. our top story is the jobs report. the consensus right now is calling for 230,000 positions added. that would be down from a gain of 288,000 that we saw in june. this will be the sixth straid straight month, though, that employment is growing by 200,000. we haven't seen a stretch this long since 19897. the unemployment rate is seen holding steady at a six-year low of 6.11%. the jobs report isn't the only economic issue today. consumer sentiment, personal income and spending, ism manufacturing and construction spending and auto sales, that's a mouthful. our newsmaker of the morning, dallas fed president richard fisher, he will be joining us exclusively for an hour starting at 7:00 a.m. eastern tim. this is all com