welcome to "worldwide exchange." i'm carolin roth. the german economy contracts while france forecasts after it fails to expand in the second quarter. cisco's revenue forecast falls flat and the company finds another round of job cuts after it struggles to sustain growth.

lenovo's smartphone strategy is paying off. they deliver a jump in profit as its new hand set business offsets personal computer sales. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. good morning, everyone. you are watching "worldwide exchange." we are just modestly lower, around 0.2%. it is gdp day and the data we got out specifically this morning for germany and france, that was definitely disappointing. the recovery is losing steam. let's have a look at the markets one by one and see how they're responding to the data. the xetra dax is down by 0.1%. rew blaming its renewable energy subsidies for that big decline. the cac 40 is off by 0.5%.

the ftse 100 outperforming this morning by roughly six points or 0.1%. let's get to some of the top spots we're watching for you this morning. balfour beatty up 1.9%. carillion says it is confident on the new approach which would pay shareholders an additional cash dividend of 8.5 pence a share. rwe's first half operating profit plummeted by 40%, hit by lower power prices and competition from renewable energy sources, as i just mentioned. germany's largest power producer blaming weak economic growth for depressing demand. balfour beatty up by 1.9% and rwe down by 2.8%. take a look at the share price performance for novozymes, off

by 5.2%. the danish firm now sees profit growth of 9% to 11%. earlier on "squawk box," just spoke to the ceo of the company and asked for his views on today's gdp numbers. >> well, it's all about the innovation that we can supply to our customers. so the underlying gdp growth doesn't have a phenomenal impact in our business. it's our ability to innovate with our customers that drives the business. >> let's show you what's happening on the bond markets on the back of the disappointing gdp numbers. 1.007% is what we're seeing here. incredible number, isn't it? the french yield is at 1.39%. analysts see another record low for the ten-year spanish at 2.43. it has now gone up back above that 2.5% level. so once again, it is a flight to

safety. growth concerns, but concerns about the disinflationary environment that we're in. all right. so time for your take on the markets in asia. sri jegarajah is in singapore. how are we looking in asia today? >> very distinct concerns in this region, as well. let's start with the japanese data. once again we saw some pretty disappointing numbers, machinery orders in the second quarter, contracted by more than 10%. although we are looking at a rebound in the region of about 3% in the quarter, in the third quarter that we are in right now. the market does seem to be quite sanguine about the prospectors for the japanese economy. they're brushing it off and looking forward to that rebound in the third quarter. if we don't see that, it will probably build the case of further action by the baj bank of japan.

try the possibility of more public pension fund participation in the market. shanghai composite is the underperformer today. growth concerns really squarely hitting that market after we saw disappointing lending data earlier on this week. that raised concerns about the outlook for the world's second largest economy. overall, a fairley mixed picture for asian equities. carolin, you're facing growth concerns in your region. a similar story back to you, as well. >> and i want to bring you the latest flash. singapore has sent a nigerian woman to a hospital isolation unit on suspicion of ebola. this is after korean air says it's sending flights to kenya over ebola worries. once again, this is also a big

concern in the asian sphere. let's get back to our top story. european market trading slightly lower this morning after weak gdp numbers out of france and germany as demonstrated by our wall, which you can see. there you go. france surprisingly came out on top in the second quarter, was completely flat growing. germany is second. berlin blaming a drop in foreign trade and investment for 0.2% contraction. this puts it on par with italy which saw negative growth in the quarter as was highlighted last week. meanwhile, italian prime minister renzi has stepped up to holding a secret meeting with mario draghi. the get-together was thought to have taken place earlier this week where draghi has a holiday home. good for him. the ecb declined to comment on the meeting, but it comes just days after draghi said the pace of reform in italy is slow. with us in and out, nicholas

spiro. anatoli, let me kick things off with you. this is the wake up call to germany, isn't it? >> i think it's a wake-up call not only for germany, but all of europe's government will need to look at this data carefully. i think in the data we had a very strong q1 which was dist t distorted by good weather. q2 numbers, it was an unusually high number for the holiday. i think we should look at the first half as a whole to think about this. there, germany is still growing. spain is the surprise, a surprise market on the upside. france and italy, way too low and a big concern going forward. >> nicholas, what is wrong with the eurozone? we were sitting here saying we had finally come out of the recession, and now it looks like italy is back into recession and maybe dips in some of the other

countries. what's wrong? >> well, the news is extremely dire. we have a situation where two-thirds of eurozone gdp is either in recession, flirting with it, or has contracted in the second quarter. the ecb has allowed the eurozone to sleep walk into this situation. i would share your other guest views about spain in the sense that mr. draghi clearly has a point that those economies that are undertaken meaningful structural reforms clearly are in a better position. but i am extremely worried. >> sorry to interrupt here, but you say the ecb has allowed a couple of companies in the eurozone to sleep walk. the ecb has done everything it potentially can, right? >> we share the view that the

ecb has done more. the ecb is trying to patch things up, buying time for more reforms and the whole adjustment process from the deepest crisis we've been through. certainly we think the ecb will do more. >> what exactly should they be doing after that? >> that's a very good point. certainly they won't be doing anything until the review is announced. that compliments matters. i personally believe that outright qe is a political starter in the eurozone. the fundamental problem, which your guest has also hit the nail

on the head on is that the ecb, it's become clear now that the ecb is not able to fix the underlying problems of the eurozone. in terms of the governors. the economic and the political governance of the eurozone is a shambles and mr. draghi himself is a leader to this. it's not a coincidence that mr. draghi has been stepping up his calls for closer political, economic and integration. >> let's get back to the markets quickly. the ten-year german bund yield falling below 1% for the first time ever. once again, it shows us concerns about disinflation, shows you the safe haven flight. interesting stop between france and germany because the dundes bank chief said yesterday urging france to start setting an example on budget matters while

today it seems as though france is slashing the deficit targets, is slashing the growth targets. there's no reason for france to be smug about the numbers today, even if it beat germany in the second quarter, right? >> yes, indeed. we are going to get weaker fiscal positions, that's clear. i still the think there is a call for germany to do more. >> in terms of wages, for example. >> in terms of wages. and in germany, it's lower, around 1.5%. when we talk about structural e reform. there's more to be done. we can look further ahead with demographic challenges that are even more relevant. >> investors are wading a speech by vladimir putin in crimea in

parliament. he is on a two-day tour in the annexed region joined by various prime ministers. putin is expected to visit the navy base. meanwhile, uncertainty remains about the fate of the russian convoy. the red cross says it n information about the shipment and doesn't know despite moscow claiming it is coordinating with the organization. meanwhile, the prime minister of ukraine accused russia of cynicism for sending medical and food supplies after allegedly arming rebels in the east. nichol nicholas, what exactly do you expect mr. putin to say today? >> i think it's clear that he is going to say russia is not returning. it shows the extent to which the ukrainian crisis has escalated over the past several months, that russia and the rest are at

a draw virtually over the provision of humanitarian aid. it's very clear that certainly russia is not returning. and that mr. putin believes that he can still pull this off. it's become a very debilitating crisis. and it's no longer just about ukraine. this is about two fundamentally different divisions. but history and inter nationnat relations. and that's what's very worrying. >> and to what extent is russia and the ukraine crisis to blame for that slowdown in second quarter gdp? germany, yes, we saw that big drop in the zew. that was no surprise given that

the dax had dropped almost 1,000 points in the month of july. but do you think that is here to stay or is it really just tempora temporary? >> i think it's been underlying weakness in the export data towards central and eastern europe and we have to remember, if you take germany, for instance, you have an exposure to central and eastern europe which is quite big. so i think as long as the crisis doesn't escalate further, this should be fairley reasonable to contain. what do you think of the mixed messages that ukraine has been sending with allowing that convoy into the country? there's a lot of confusion in terms of what we're seeing in terms of western media. can you clarify this? >> there is.

russia is toying with the rest. this is a huge pr stunt. russia's aim from the joit set has been to undermine, to destabilize, to discredit the ukrainian government. if russia's aim is, in fact, to undermine the ukrainian government's ability to properly function and to even carry out the imf, that it's supposed to be carrying out -- >> all right. nicholas, thank you so much for that. i also want to thank anatolli, from societe generale. the twitter account for

prime minister medvedev was hacked over a 40-minute period which suggested the pm was resigning after he was, quote, ashamed at the actions of the government. another tweet suggested he was hoping to pursue a new career as a photographer. rossneglect has asked the government for $40 billion in order to endure sanctions from the west. a report citing government sources says the plan currently has $12 billion of debt repayment due at the end of this year. russia has meat 1%. the french government bond yields have fallen to a record low of 11.392%. that is according to trade webb. coming up on today's show, he started with zilch and ended

up with the $10,000 prize. find out what the winning word was in this year's national scrabble championship a little later on in the show. and we take a look at africa's largest bank and its unique relationship with china. and there could be a cleanup on aisle two as walmart sets to disappoint investigators again this quarter. and after this break, lenovo smartphone shipments jumped. the cost to hong kong and earnings analysis we will hear when we come back. having the cloud allows us to rapid prototype a lot of ideas.

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do you need a vacation from your e-mail? daimler employees do. select employees for the german carmaker can choose to have all their e-mails automatically deleted when they're on vacation so they can return to the office with a clean inbox. that's everyone's dream, isn't it? what we want to know is would you choose to have your e-mails go on vacation or is the prospect of a digital detox scare you? join the conversation here on

"worldwide exchange." worldwide@cnbc.com, @cnbcwex. personally for myself, i think i would be scared to be missing out on any very, very important e-mails, but you know what? maybe we should go on holiday without reading any of them. do send in your comments to twitter and to e-mail. cisco has announced 6,000 job cuts to add to the 15,000 it has already announced since 2011. the network equipmentmaker has blamed uncertainty over global demand. josh lipton has more. >> cisco stock initially popping in the after hours, the tech bellwether reporting eps of 55 cents on 12.63 billion. that was better than the street expected on both the bottom and the top. but the clear headline on the conference call when cisco said it plans to cut 6,000 job,

that's 8% of its workforce. analysts could jump on that and ask john chambers about that decision. here is what he had to tell the street. >> it is the most difficult decision we make as an operating committee. we're going to leave this market and be decisive in it. >> these cuts coming as cisco looking for growth. revenue up 12.63 billion. but that was basically flat year over year. it was also interesting to see what chambers had to say about geographical around the world with their strength and where there's weakness. he pointed out u.s. orders were up 5%. but the emerging markets were a different story. china down and down hard. he said bricks, when you look at those emerging markets, they seemed to be turning around in q2 and q3, but then they declined more than anticipated. he did say with the emerging markets, there were what he called some bright spots. specifically, he said he bet on india in a big quay.

as for guidance, looking ahead, chambers telling the street and investors revenue flat to 1% and eps of 51 to 53 cents. the street was looking for 53 cents. i'm josh lipton, cnbc, silicone valley. and let's continue with earnings news. china's lenovo beat estimates with a jump in profits in the fist quarter. this thanks to strong growth and smartphone shipment as the company tries to reduce its stag nabt retail pc business. lenovo shares atoday are down b 1.4%. alex is vice president of research equity at china securities. thank you so much for joining us. do these numbers give you enough optimism for the company to be able to manage the two major

acquisitions worth more than $5 billion? you would think there is a lot of execution risk out there. >> yes, actually, for this corner, the overall market is to estimate. it's driven by the stronger than expected pc and the continued momentum in smartphones and sector globally. another thing i want to highlight is that lenovo has surpassed samsung to be the number one smartphonemaker in china. this year in china, it's all about 4g. so being a looed er boo allow - it appears in the second half of the year. >> what is your jo lieutenant for september quarter? can the company continue to gain market share?

yes. actually, the pc demand is driven by the commercial pc, but due to the global issue, we see some management on the global -- intel and hp, the management came out in the past quarter revising up their estimate. lenovo is going to do well in the pc side. we got into the smartphone side which is challenging for lenovo. which we expect to -- by the end of the year. so far for the data we have received, we have confident for lenovo to turn around earlier than expected. >> but again, in the smartphone

business, they're only at break even level. can they turn this around enough for analysts to be content with the event? >> yes. we believe the numbers we see is global smartphone shipment has almost doubled on a year on year basis and on a q 1, q2 basis it is doing a very good job. we are confident that on the top line growth, it will maintain a healthy status and on the operating margin wage increase if you look at the second quarter numbers. going forward, we are still very positive on the innovation. the lenovo smartphone business is stronger, also with --

they're doing that online, a healthy test flow. >> thank you so much for that, alex. appreciate it. vice president of equity futures for china technology at china merchant securities. good news for people who work early hours like us or like nights and struggle to fall and stay aclesleep, the fda has approved merck's insomnia drug. the drug could impair one's ability to drive a car, so the fda cautions people, shouldn't take more than one pill per night. let's have a look at merck shares. no, still to come on this show, the uk property market shows signs of a slowdown. are soaring home prices no longer a threat to the uk economy? we discuss after this short brock.

welcome to "worldwide exchange," bringing you business news from around the globe. >> europe's powerhouse runs of you of steam, the german economy contracts after it fails to expand in the second quarter. pushing ten-year bond yields from both countries to record lows. a speech by russia president

putin over whether an aid convoy from moscow will be allowed to enter the ukraine. cisco is threatening another round of job cuts as it struggles with growth. lenovo delivers a jump in profit as its new hand set business off set a decline in personal computer sales. let's have a look at these european markets on this very important gdp day. once again, gdp was below expectations and the xetra dax was down by 0.5%. the cac 40 falling by a similar percentage. the ftse 100 is pucking the trend, up by 0.2%. but the ftse mib down by almost 1%. it has slipped back into recession. but we already knew that. a shaky start to the trading session here in europe. let's have a look at the bond mukts. we're seeing another record low in terms of the ten-year yields

for germany, for france and for spain. the ten-year treasury, 2.41%. ten-year german yield is at 11%. in the currency markets, euro/dollar, close to nine-month lows on the back of the data points out of europe this morning. 1.3358. sterling/dollar, four-month lows after yesterday's inflation report, 1.6672. and dollar/yen is unchanged at 102.42. the uk housing market has problems as demand for new homes in the uk fell slightly in july. this is according to the residential market reports that suggests the high property market in london is showing some sign of cooling. so is the housing sector less of a threat to the uk economy? captain boyle posed this

question to governor mark carney yesterday. >> this is a medium term risk to the recovery. in any respect, what the fcc was doing when it took the steps a few months ago was acting to reduce a risk that could materialize beyond the forecast horizon of the mpc. in other words, an excessive build up of debt, but ultimately difficulties with the financial system but, really, as the big issue that further increases the debt overhang of british hopefuls such that when the slowdown came, that slow jan was amplified and amplified into recession. so that's what the fcc did. a judgment that the mpc had to take in this report and with its forecast was did the fpc's actions affect our central forecast for the mpc for the economy and the answer is no. >> and before we continue our discussion of the uk housing market, we've got data out of portugal. and this is quite a surprise to

the upside portugal q2 gdp, a flash came in at 0.6% on the quarter, up 0.8% on the year pt contrast that with germany where we saw a sharp contraction and then france not growing at all. so this is quite a surprise because all the headline news coming out of portugal over the last couple of months has been negative. let's go back to the london and uk housing story. joining us now, josh miller. we saw softening in demand, soft.ing in prices. who can take credit for this? is it mr. carney or is it just the cycle? >> i think he can take a lot of credit for this. the bank of england has gone out of their way to engineer a change in psychology. there are other factors involve. i think the bank of england is taking a lot of credit. >> is that also because of the expectation of higher rates or really is it just about some of the amendment mortgage rules?

what's the biggest factor? >> all of the above. you have the mmr, interest rate expectations. you've got affordability constraints and you've got reduced medium to long-term house price expectations, which is then feeding through to demand. >> some of the data points regarding the housing market in london and the uk in general have been quite conflicting. we've got this report saying house prices rose at the fastest annual rate last month since the start of the annual crisis. and we've got nationwide data point to go a softening. >> as a general rule, what we do is measure what is happening in the real estate agent, where the mortgage lenders will measure what's happening once that transaction has progressed to approval stage. so our survey tends to be quite a good leading indicator what happens then to the main indices. >> what's interesting is that outside of london, yes, outside of london which was traditionally quite weak in the aftermath of the financial

crisis, we've seen a cap shot. why is that? is that because affordability a better. >> affordability is better. that catch up has been a long time running. >> it's quite fascinating to see that scotland stands out in europe price growth forecast. how much is scotland expected to grow versus the rest of the uk and versus london? >> well, the scottish market has a reasonably long-term outlook, about 4% a year. the scottish and the northern irish markets suffered badly during the last few years. so they're starting to see some kind of catch up. >> thank you so much for your time this morning. a very interesting data point. joshua miller, senior economist. do send in your e-mails. let's see if you have any thoughts on what we're discussing on the show, whether it's the london housing market,

whether it's russia, whether it's what you want to invest in these markets. do send in your e-mails and tweets. japan core machinery orders marked their sharpest fall in five years. makiko has the report. >> spending has been dismal following a consumer spike earlier this year. after falling 9% in april, it booked a record plunge of nearly 20% in may. so the market has been expecting a 16% rebound for the month of june. but according to figures released today, growth was limited at 8.8% falling well below forecasts and as a result core orders for the april to june quarter slumped 10.4% at $22 billion. this is the first decline in orders saying it was seesawing.

however, a bid down of figures in june show that orders for semi conductor machinery, engines and computers were a bright spot along with manufacturers. so things may pick up slowly as forecasts for the july to september quarter show a recovery of 2.9% with an increase in the sector. that's all from the nikkei. back to you. >> thanks for that. in asia tomorrow, malaysia releases second quarter gdp figures. we also get second quarter gdp data from hong kong and south korea and india are on holiday. the bank of korea cut its interest rates by 25 basis points to 2.5%. and the bank of korea starts

moving more than 12 months, but it was widely expected. pope francis arrive earlier this morning. the pope was greet ed. this is the first papal trip to asia and kicks off a trip where he plans to -- 124 korean marchers. iraqi civilians trapped on a mountain could be shelled following an on the ground assessment. the pentagon says a u.s. military and humanitarian missile to the mountain found the situation to be less serious than feared. washington previously said troops could be used to evacuate the rev ewe dpees. the uk and others continued to

drop supplies and kier simmons reports on the refugee crisis now engulfing the kurdish city of erbil. >> they are consumed with anger and fear, homeless by the thousands and on the run. today at this refugee camp they told stories. they shot them and then cut their heads off. and these are children? one man in tears. >> they raped the females. >> he said 84 members of his extended family are missing and feared dead. they were kidnapped by isis. another man approached with terror in his eyes. he says he saw many bodies abandon and people committing suicide rather than be captured.

overwhelmed, he breaks down. >> you should never have had to go through this. >> but can you say to a man whose people face genocide and -- doubt. >> every time a vehicle tries to come down this road, they're attacking it. >> and they are losing hope for the future. i was with the u.s. during the war, this man tells me. >> i still in iraq. then he says he left there. >> we're still awaiting a speech by putin. putin is expected to visit a navy base near the plaque sea. meanwhile, uncertainty remains about the fate of a russian convoy which is kremlin says is carrying aid for eastern

ukraine while if red cross claims it is coordinating where the with the organization. our next guest has been taking a closer look at which emerging markets are most vulnerable to an escalation in the russian ukraine crisis. schweta, no surprise. not necessarily, because of the exports and the energy imports. >> exactly. amongst the markets, the european countries are the most exposed to russia related events. the first key exposure is energy dependency. the economy such as poland expose 75%. but then you plan to sit back

and wonder if russia can't afford to impose energy exports. so it's sort of -- i mean, the credibility of this threat is not that important. >> no, it's not. russia's economy is clearly suffering. they can't afford to capture energy exports to eastern europe, eastern germany specifically. so this isn't really that serious, is it? >> it's not. that brings us to the second threat which is a shot light to him. the exposure for financial -- hungary in particular quite opposed to russia so are the other smaller emerge can european countries like latvia,

et tone use, but if there are detrimental affects in your area, that will have a lot of negative repercussions from these economies. you can see the economy is already suffering. we have seen the impact on many of these economies. it means more down side risk the. basically, that's the story for emerging -- >> i wonder if we're sanguine about some of the effects the. what about the indirect affect in terms of business consumer sentiment? are we underestimating that impact? >> it can be quite significant and they emerge in europe. for example, the links are the most important in terms of what happens to the sense of risk aversion.

should the fed start hiking rates, that implies a faster growth and carry trade. the other direct impasse would be energy, global energy prices if you combine what's happening in the middle east. that can likely have a huge impact on the markets. is so that is why i see, this is not trading much out of the way. >> a lot of people are asking why we're not seeing higher oil prices. let's talk about the emerging markets outside of europe. let's talk about the middle east, let's talk about asia. which are the countries that

importers do fis the highest rates. apart from those two countries, the network is. these are the economies that are more vulnerable to a potential increase in global energy prices. >> we're going to have to leave it here. thank you so much for that. the twitter account of russian prime minister dimitry medvedev reportedly was hacked yesterday evening. russia today reported medvedev's russian language account was taken over around 10:20 in the morning moscow time. the hacker produced a number of tweets over a 340-minute period

which suggests that he was resigni resigning. a report from a newspaper citing government torss says the plan would see the national wealth fund buy washington bonds. the company urgent currently has $12 billion due at the end of the this year. still to come, a nation mourns the tragic death of brazilian candidate campos as inest vesters are truging to what ask what, if any, impact the debt debacle is having on argentina flavor.

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do you need a vacation from your e-mail? it seems like daimler employees do. the ft is reporting that select employees for the german carmaker can choose to have all their e-mails automatically deleted when they're on vacation so they can return to the office with a clean inbox. what we want to know is would you choose to have your e-mails

go on vacation or does the prospect of a digital detox scare you? join the conversation worldwide@cnbc.com, @cnbcwex. >> steve writes in, a quick e-mail, no bother. i am already up in the middle of the night. what about the others? personally, i would be a little weary of not receiving any of the e-mails that do get sent to me during the holiday period. maybe you're missing out on a couple very important ones. i want to know what your opinion is. a chinese anti-monopoly adviser has been sacked after he reportedly accepted payments from qualcomm. sh shinxu took payments. this as an influential chinese

newspaper reports audi is going to be fined up to $40 million for violating an take druft laws. it will be fined based on its percentage of car sales. audi said -- had violated anti-trust laws and that it would accept a fine. brazilian presidential candidate campos was killed in a plane crash. the plane came down and killed all seven passengers on board. the 49-year-old was not expected to win. however, some analysts believe his death could make it harder for president rusef to secure a second term. the crash sent the real lower by

as much as 2% before rebounding slightly at the close. let's talk more about brazil and investment opportunities in latin america. juan, thank you so much for coming in. what do you make of brazil? you don't see much up side there, do you? >> no. this year, maybe growth 1%, a huge amount of extending the uncertainty of the election. with the news of yesterday of mr. campos. and the markets have to be moving in the opposite correlation of the champion's of the -- to win whenever the market things he's going to win, the markets go down whenever they think she's going to lose, the markets go up. economically and political we, make a decisive call over the next three to six months. >> where do you see exciting investment opportunities? do you think a lot of them are pushing up in lattit america,

specifically with mexico of the opening up of the energy sector. would you tap into that? >> the big one is mexico opening up its oil policy. a lot of inspiration, investments, and plenty for investors to look at. we also have at the same time we were mentioning before argentina and the full story. we have new count irs in the last two months issuing debt for the first time new mexico years. so you have a diversity of situations in america, but i think taking advantage of you have the right analysis. >> let's get back to argentina at the moment. the news that we're getting this morning, it seems as though there is not going to be a private sector for the argentina hold out bondholders. but you actually think this wasn't such a bad move on part of argentina. why is that? >> there's a lot of noise in

negotiation. but we'll discuss our part of the world. we are -- >> it's different. >> trying to find a solution. it's the only time argentina defaults. i think they are getting better and better at it. the first time they default, prices haven't really gone down. they have plenty of cash. to actually pay the interest extent lower is supposed to be defaulted. the hold outs made a very good deal in the negotiations. so i think everybody has the capacity to find an agreement. argentina to come back in the international markets. and remember, they default ed, they've been arranging the nationalization, is value for over $1.4 billion when they have 20 billion debt of reserve. we think this is going to be sentenced eventually over the beginning of next year. that's going to mean argentina

has the -- a local currency problem, an inflation problem. because of the capital controls, because we voent have access to international market. you saw those numbers. >> dundee corp. has increased the stake in your company. what do you want for additional cash? >> opportunities that result from that analysis in countries. we are mentioning -- and maybe it's apparent with argentina, look at countries like ecuador. they issued $2 billion of debt two months ago. paraguay issued $1 billion for 30-year bonds. and originally we were looking at columbia as another three, four count that we can see this. capital increase is going to

serve to operations and investments into those countries. >> all right, juan, it's great to have you on the show. best of luck with your expansion plans. thank you so much, founder and president of union group. still to come on the show, find out why africa's largest lender standard bank sees ongoing head winds in its crucial market. we speak to the ceo first on cnbc. after the break, we're joined by goldman sachs, chief global equity strategist. find out why he's bullish on the dax despite the disappointing german data coming up on sh show only. we'll be back in two.

did german economy contracts while france is slashing growth forecasts expand in the second quarter, pushing ten-year bond yields from both countries to record lows. cisco's revenue forecast falls flat and the company finds another rounds of job cuts after it struggles to sustain growth. electrolux is reportedly circling ge's appliance business, but the swedish firm says no comment to cnbc.

walmart is set to report second quarter earnings in just a few hours. investors are waiting to hear how the retail giant plans to jump start sales in the u.s. sxwla you're watching "worldwide exchange," bringing you business news from around the globe. and we're just getting gdp data for the second quarter fort the eurozone as a whole after this morning's disappointment with regard to germany and france and the eurozone number that is a bit of a disappointment, as well. flat on the quarter. 0.0% growth. 0.7% on the year. the second quarter gdp was forecast to come in as plus 0.1% quarter on quarter, plus 0.7% on the year. so we've got a miss on the quarter on quarter number, but an inline number in terms of the

annual number. the surprise could cast a shadow over the recovery prospects. let's get out to peter oppenheimer, chief global equity strategist at goldman sachs. peter. >> good morning. >> how shocking is this or not a shock at all? >> not that shocking. as you said, the year on year numbers are pretty much in line. people expected very little growth in the second quarter, flat in the second quarter, below what we were thinking. but i think a lot of the slowdown in europe is due to temporary factors, particularly in germany. germany had a strong second quarter. germany, strong growth in the first quarter, a bit of a payback in the second quarter. they're not looking for strong growth in the eurozone.

it's not a disaster, but what about these eurozone cpi numbers, down 0.7% on the month, up 0.4% on the year. the euro nudging higher after we got the cpi numbers, trading at 1.3317. the cpi numbers, this is danger zone to the ecb, isn't it? and we're waiting for the effects of the rate cuts, you name it. they really should be doing more, shouldn't they? >> again, there are some important cyclical factors which pushed inflation down. the ecb has stressed that many times particularly in food and energy and, as you mentioned, the euro has come down, financial conditions are easing. that should contribute to some higher inflation over the next several months. by the end of this year, we would have seen, i think, like an 8 or 10 cent appreciation in the euro over six months and that will contribute a little bit to inflation moving forward. so the prospects here i think is

for very low growth and very low inflation. but not a slump into deflation or the system recession. >> calls for european equities, for european equities. i want to take a look at u.s. futures because we are expecting a slightly weaker start to the trading session. let's bring those futures up. i'm told they're coming. there you go. we're expecting the trading session across the board. yesterday, the s&p up 0.6%. those indices at a two-week high. maybe some bargain hunters coming in. the dow moving back into positive territory for the year. let's show european markets and how they're responding to the data we got out this morning. the ftse 100 bucking the trend, up modestly by 0.1%. no gdp data out for the uk today. but for the eurozone, the xetra dax off by 0.5%. after that miss in the second

quarter in terms of the growth number, the cac 40 off by a similar percentage and the ftse mib, bearing the brunt of a loss, off by 1.2%. there was this meeting between the prime minister and mr. draghi. i wonder what they were talking about over pasta and italian wine, probably. let's have a look at the bond market. what we saw this morning is another move lower in terms of yields. the record lows for germany. for france, for spain. the spain number is off lows, the yield now back above the 2.548%. and the ten-year bund yield back above that 1% threshold. let's give you a look at what's on today's agenda in the united states. weekly jobless claims out at 8:30 a.m. eastern forecast to rise to a total of 295,000. at 8:30, july import prices expected to drop to some 3%. walmart reports earnings before the opening bell as the retailer calls. after the close, we heard from

applied materials, nordstrom and jcpenney. at the end of last month, you downgraded equities on a three-month basis. why is that? and do you feel that this call has now been vindicated by some of the numbers we got out? >> well, there are a few reasons why we downgraded. we thought that the short-term effect wasn't looking that good. i would emphasize that we still have equities as our main overweight on a 12-month perspective because it's the only asset class we think that still offers a reasonable risk premium. short-term, however, geopolitical risks were rising and not heavily priced in. we thought stronger numbers in the u.s. would push interest rate expectations up a bit, force something weakness in equities. these not been the main reason why they've weakened. the weakness has been more about dpeeo political events and weaker data in europe. but i think that they go to a little bit of short-term weakness. >> there usually is

misunderstanding or this perception that when yields go higher, equities are automatically suffering. can yields and equities go up hand in hand? they've done that before. >> absolutely. if we look at the period, for example, from september through to the end of last year, bund yields were rising quite a lot and equities were rising quite a lot. and that period was reflected as stronger growth expect ages coming into this year. so, indeed, if the we do get a cyclical recovery in global growth and rates move higher, i think over the medium term equities will do just type. maybe some short-term volatility as that shift comes through. but, really, the key question is what would drive interest rates higher. and if it's about growth .not inflation, that's the most likely outcome. i think equities will do reasonably well given the current valuations. >> let's go the come back to geopolitics. as you say, this has been the key driver of what we're seeing in the market action, whether it is in europe but also in the

u.s. and a few of other us experts on geopolitics or markets people. so how do you navigate through this environment which is driven by the headlines coming out of ukraine of russia, iraq, without being an expert, how do you navigate this volatility? >> clearly, one thing we can look at is volatility and what kind of risk premium is priced into markets. we had appeared at very, very low volatility. and we felt that there was some vulnerability to markets adjusting that volatility, so concerns about where geopolitical events may take us. it's very difficult, of course, to predict where that happens or where it ends. but what we can only look at is valuations. we think valuations are now coming back to levels which are quite attractive and are priced in quite a lot of risk. and if we look at the fundamentals which we think will be getting better for equities as we move through into the second half of this year and

into the first half of next, a pick up in inflation growth. although we've been temporarily cautious of equities, we think they will recover and generate the best return. >> so wind the dip, that is the hold, doesn't it. >> i think it's still a hold. policymakers are still very accommodative. we've seen that reasserted just this week. inflation pressures are very low. bond yields are going lower, mainly for that reason. the key question here is whether we get growth in europe. the second quarter was very weak. stagnant. we think part of that is tempora temporary. not looking at a strong rebound. but growth, we are looking at a pick up in activity and i think that will be enough to generate a pick up in equities. if we look over the next six to 12 months. >> peter, thank you so much for that. additionally, you're going to stick around and we'll talk much more about your calls and where you can make money in this environment. back to one of our top

stories, russia, the twitter act of prime minister medvedev was hacked yesterday evening and wrongly reported the pm's resignation. the russian language account was taken over around 10:20 moscow time. the hacker produced a number of tweets over a 40-minute period which suggested the pm was resigning, he was, quote would have been shamed at the actions of the government. another tweet suggested he was hoping to pursue a new career as a photographer. russian oil giant rosneft has asked the government for $40 billion in order to endure sanctions from the west. a report cited government sources says the plan was to see the national wealth fund. rosneft had no comment when reached out to by cnbc. back to our viewer exchange this morning, do you need a vacation from your e-mail? it seems like daimler employees do. the fc is reporting select

employees for the german carmaker can choose to have all they their e-mails automatically delighted when they're on vacation. so they can return to the office with a clean inbox. what we want to know is would you choose to have your e-mails go on vacation or does the prospect of a digital detox scare you? join the conversation here on "worldwide exchange." get in touch with us by e-mail, worldwi worldwide@cnbc.com, @cnbcwex. peter, would you go for that, an e-mail detox during your vacation or would you be too jittery? >> i love the idea of it, but i'd probably get jittery. >> i'm sure we would find a way to get auto a different computer and somehow access to work e-mails, right? >> nice idea, but difficult in practice, maybe. tommy hilfiger's penthouse for sale is back on sale again.

the penthouse stretching more than 6,000 feet was put on the market back in 2008 and then again last year. the fashion tycoon has relisted the property as he is looking to spend more time in connecticut where his children are now attending school. and coming up on the show, peter stays with us to break down goldman sachs's top picks. you don't want to miss out on that straight after this short break. [ male announcer ] ours was the first modern airliner, revolutionary by every standard. and that became our passion. to always build something better,

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these are your headlines this morning. the german economy contracts as france stag nates, pushing bond yields to record lows. cisco beats estimates as flashes of sening shares lower after hours. and electrolux could be looking to buy ge's appliance business. the company tells cnbc it has no comment. cisco's fourth quarter profit fell 1% and revenue edged down 0.5%. the adjusted results beat forecasts. the company expects first quarter revenue to be flat, up 1%. can i say cisco continues to struggle in emerging markets, especially in bric countries and in selling to cable companies and other service providers. the company will put about 6,000 jobs or 8% of its workforce. cisco will add staff in jaers

such as data, security and the cloud. cisco fell 1% in after hours. in frankfurt, it is currently down by around 0.25%. electrolux has told cnbc it does not comment on rumors following a report. ge has elicited interest for its $2 billion appliances unit. the companies are in talks to dwie part of ge's $4 billion divestment plan according to bloomberg. the report indicates more time with the private equity firm to acquire a majority stake. let's get back to peter oppenheimer, chief global equity strategist and goldman sachs. let's get to some of your key calls. in terms of sectors, you're overweight financials, industrial and technologies. why? >> generally speaking, we think there are two things that are scarce at the moment. growth is scarce and we want to be in areas moore -- with cycles. in addition to that, income is scarce so we want to capture

areas where you have some reasonable prospect of dividend growth. generally, in most parts of the world, we think that having a bit of a cyclical bias now, given how much cyclicals have underperformed makes some sense. >> what about the dax? you actually like the dax, despite the fact that it's fallen pretty hard over the last six weeks or so. what makes you so confident that we can bounce back from this? >> right. well, as you said earlier, predicting the political developments is very difficult. clearly, germany is very sensitive to developments in russia/ukraine. i think a lot of that has been priced now. but additionally, i think germany has weakened because of the weak data that we've seen in the second quarter. the lower inflation numbers, both of which we think are somewhat temporary, particularly for germany. the german economy will recover. and also we think that the global economy is going to pick up and germany is into global

growth. it has one of the highest levels of operational leverage of any of the main indices. more importantly, it looks quite cheap to us strategically. it's one of the cheapest major markets around the world. so we think -- >> it is pretty cheap despite the fact that the euro has been persistently high. >> right. but the euro is coming down a little bit. so the combination is easing financial divisions on a forward looking basis together with the prospects of somewhat stronger global growth and the valuation, i think, will be quite supportive. >> all right. finally, we want to talk about corporate credit. downgrade that to underweight. why exactly? is it val you autoation again? >> 80s mainly to do with our expectations. what's happening right now is the bund yields will pick up a little bit as growth improves over the next several months. now, we believe that although the outlook for spreads is still pretty benign with a global back

drop of low volatility, low inflation, that the prospects narrowing from here, not enough to compensate for the impact of rising bond yields. looking for the return prospects are now pretty poor in 12 months. >> peter, can i just ask you, what frustrates you the most out there in terms of your calls not being fulfilled? is it the lack of a rise in yield? >> well, i think that's the biggest surprise if we think about the year-to-date. from our perspective, bond yields have continued to fall. i think as often is the case looking back at you to understand why this has happened, temporary weaker data, inflation has come down again and we've had some shift away from risky assets because of geopolitical developments. but the bond yields i think are one of the biggest surprises to us this year. >> not just to you, but to the rest of the industry, as well. peter oppenheimer, chief global strategy economist.

still to come on the show, we talk to the ceo of standard bank as the economy is likely to hit future earnings. and we'll leave you with a view of the heat map to see how european markets are trading right now. off 30.2% on the gdp data. a disappointing gdp figure. a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com

welcome back to the show. let's show you what's going on in these markets. look at u.s. futures, we're expecting a mixed start to the trading session. the s&p 500 seen up by a modest 1 points. the dow jones seen off by almost 2 and the nasdaq seen off by 1.5 points. we're expecting little change at the start of the trading day after the dow moves back into positive territory for the year, up by 0.5%. the nasdaq having the best day in nearly a month. again, volumes very, very unimpressive. here is a look at the european markets for you. we're seeing one market bucking the trend and that is the ftse up by 0.2%. qe coming out with earnings and that's driving the stock higher. elsewhere, the xetra dax still under selling pressure off by 0.3%. it has trimmed some of its earlier declines. the gdp for the country coming in below expectations. what a disappoint, really. the cac 40 is off by 0.4% and

the ftse mib is off by 1%. in the bond markets, we're seeing a continued flight to safety. we're seeing the ten-year treasury yield at 10.2%. 2.4%. the ten-year german bund, 1.02%. france, 1.41%. africa's biggest lender standard bank has reported a 2% increase in earnings. the company says that sluggishness in the south african economy is likely to persist for the rest of 2014 which may hamper domestic revenue. joining us on the line is the join ceo of standard bank. thank you so much for taking the time to talk with us. last week, you said investors shouldn't be too quick to dismiss south africa.

where is that optimism coming from in light of today's comments? >> we see tightening monetary policy in south africa as well as a slowdown in gdp growth. however, the growth in the south african economy would come from the investment in infrastructure, particularly power. as you and i know, power and logistics are a cat on the country's gdp growth. in addition to that, we've got gas on the east coast of the country as well as gas on the interior, which if properly exploited could easily add 2% to the country's gdp growth. and if the authorities were to execute their policies with discipline, we think that it's not unreasonable to see growth of 5% in the medium term. >> that is a big if, though, isn't it? we want to come back to the

african summit. there were very high going into that. you were talking about waging scale of the power infrastructure in africa. were some of those hopes fulfilled? >> it's early, but there were a couple of really big and important announcements. the first one that i want to make reference to is the compact by the millennium challenge corporation with garner where there's a commitment of $500 million in the power in that country. the difference that will make to the people of ghana is tremendous. it will keep power, it will improve distribution and improve power generation. the second one i would like to point to is the deal done between blackrock and the bengoti group. which if executed will make a impact in west africa. there are a number of other

opportunities that i could mention, but it is an exciting time for africa. >> i want to switch gears. i have to ask you about china. euro bank took an $85 million hit on suspected china fraud this morning. do you think that $80 million hit that was it or could there be more to come on the back of this investigation? >> there is a long process to be followed. there is an investigation, as you correctly pointed out, working closely with authorities in china. we have a net exposure of $167. but it will only become real once we know the outcome of the court cases and once you know what -- >> at some point, we think it prudent to take a provision of $80 million as we look at legal processes. >> finally, i want to ask you about the sad outbreak of ebola

in many parts of africa. to what extent has that dented the prospect of your business in the region? are you seeing any impact whatsoever? >> it has not dented our prospect at all. it's a tragedy. but it's confined to west africa to three countries. the world health organization is a clear, but the cautions people ought to take be work t in confines of those organizations. given the impact on travel and how to deal with the disease should they be exposed. but in terms of the long-term growth for the continent, i don't believe it will have a material adverse effect. >> thank you so much for that assessment. joining us out of johannesburg. still to come on the show, cisco has taken the ax to its workforce once again. we'll get reaction from shareholders after this break. and we'll leave you with a look at how the futures are trading.

welcome back to "worldwide exchange." i'm carolin roth and these are your headlines. the europe powerhouse runs out of stream. the german economy contracts, 0.0% growth on the quarter. cisco's revenues fall flat and the company plans another

round of job cuts as it struggles to sustain growth. electrolux is reportedly circling ge's $2 billion appliance unit, but the company says no comment to cnbc. investors are waiting to hear from walmart to see how the retail giant plans to jump start sales in the u.s. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just waking up on the east coast, good morning and thank you so much for joining us here on the show. let's have a look at these futures ahead of the market open. we're expecting a fairley subdued and mixed start to the trading day. taking fair value into account. the s&p 500 is seen modestly higher while the dow and the nasdaq are seen off by a couple of points. remember yesterday markets were higher, but mott modestly slow. the dow off by 0.5%.

and the nasdaq saw its best gain in about a month. let's get back to the eurozone story. the recovery has stalled out in the second quarter. zero growth rate falling below expectations for a slight 0.4% uptick. the current area was hit by surprise contraction for the german economy. friends also posted zero growth on the period and downgraded its forecast. let's have a look at the market reaction. the ftse 100 actually bucking the trend, up 0.2%. driving that market higher. elsewhere, we are seeing softness across the board. not softness, but there you go, that is the reaction to the weaker than expected growth numbers. the cac 40 off by 0.4%. how do you make money in these markets? here is what some experts have been telling us this morning. >> i think that the pressure is

going to remain on for the ecb. >> look at the fund rate in ecuador. $2 billion of debt two months ago. it is $1 million of -- bond. even for this country to -- a lot of new investors into these economies and usually looking at eurowide in columbia. it's more than we can look at investments. >> when u.s. rate rises lead the back, better results. cisco has announced a further job cuts for the 15,000 it has already announced since

2011. the network equipmentmaker has blamed uncertainty over demand in emerging markets. josh lipton has all the details. >> cisco stock initially popping in the after hours, the tech bellwether reporting eps at 55 cents on 12.36 billion. that was better than the street expected on both the bottom and the top. but the clear headline on the conference call when cisco said it plans to cut 6,000 jobs, that's 8% of its workforce. analysts were quick to jump on that headline and ask the ceo john chambers about that decision. here is what he had to tell the street. take a listen. >> it is one the market waits for no one. and we're going to lead this market and we're going to be dpe decisive in it. >> cisco is looking for growth. revenue was 12.63 billion. but that was basically flat year over year. it was interesting to see what chambers had to say about geographical around the world where there's strength and where

there's weakness. he point the out u.s. orders were 5% but the emerging markets were a different story. china down and down hard. he said brics, when you look at those emerging markets, they seemed to be turning around in q2 and q3. but then they declined more than anticipated. although he did say even with the emerging markets, they were what he called some bright spots. india specifically said he bet on india in a big way. as for guidance, loob ahead, frame befrs telling the street that he sees q1 revenue up flat and eps of 51 to 53 cents. the street was looking for 53 the cents. i'm josh lipton, cnbc in silicone valley. and let's talk more about cisco. joining me on the phone from toronto, ross healy. and a fiscal shareholder. ross, you see cisco is turning a corner here. you're very encouraged by the numbers. why is that? >> okay. look, first of all, when you're looking to make money in this

market, what do you want to do is find a company with strong balance sheet, strong cash flow. it's like a cheap valuation, a little bit of a dividend, of course. if you can get it. then, what you have to look for because when these stocks have gone basically for this entire bull market is not really done very much. you're looking for stocks that are starting to make a turn in business. i think quite clearly, if everything was clicking on all cylinders for cisco, the stock would be closer to 40 than it is to the 24 or so that it's trading at today. so now you want to wait. where is the evidence that there's a turn coming in the company? and in the call today, it

underlined -- or yesterday, rather, chambers underlined that there are some turns coming and strength coming in some key growth areas that we are quite bullish on and the first one is the cloud. >> all right. but the fact that it continues to cut costs, continues to cut its workforce because of weak global demand, because of weakness and the likes of china and brazil, does that not worry you the least? yes, the eu and euro has been looking better. but hey, the bric is where the growth is coming from, isn't it? >> absolutely. that's the case. and furthermore, when asked about the 6,000 job cuts, that could be quite specific. he said yes, there might be some attrition, but mentally, there's going to be -- and he was hoping at any rate that there was going to be a lot of reallocation of that workforce into the areas of

strength, which as i say, include the cloud, securities, you know, because of what's been going on lately. mr. snowden has become very, very high in everybody's concerns. growth in the software, strength in their data center, it isn't this company doesn't have some -- not only some pockets of strength, but some pockets of quite considerable strength. >> ross, very briefly, we've got about 10 seconds left. where is fair value for the stocks? is it closer to 40, actually? >> our fair market value on current earnings is $40 approximately but we suspect that in a year or so, that that is going to be quite conservative. >> currently at around 25. ross, thank you so much for your time, ross healy. let's continue with earnings. china's lenovo, the world's largest pcmaker beat estimates with a 23% jump in net profits

in the first quarter, this was thank to smartphone shipments as the company tries to release its dependance on the pc business. lenovo shares are trading weaker as gains have been priced in, they're concernedly down by 1.4%. china mobile tumbled 8.5% as it tumbled money into the 4 goods d network upgrade. the carrier is banking on the new iphone expect the out for september. improving u.s. cooperation can china is vital to maintaining regional peace and stability. this is the message from u.s. secretary of state john kerry. speaking in honolulu as part of an eight-day around the world trip tour, kerry outlined washington's hopes for its

relationship with beijing. >> president obama has made it clear that the united states welcomes the rise of a peaceful, prosperous and stable china. one that plays a responsible role in asia and the world and supports rules and norms on economic and security issues. the president has been clear, as have i, that we are to avoiding the -- >> meantime, russia's prime minister medvedev's twitter account was taken over around 10:20 in the morning moscow time. the hacker produced a number of tweets over a 40-minute period which suggested the p.m. was resigning as he was ashamed at the actions of the government. another tweet suggested that he was hoping to pursue a new career as a photographer. i guess this is where you do get

skeptical of the youauthenticitf those tweets. electrolux has told cnbc it does not meant on chose issues. according to bloomberg, electrolux is in talks to buy ge's appliance division. electrolux has been looking to expand its u.s. footprint. reports would tie it up with a private equity firm to acquire a majority stake. pharmaceuticals is weighing options for its experimental ebola drug. it could take more, but production would take months. last week, it allowed tekmira to test it.

we had a huge run up last week when the fda gave the go ahead. and good news for people who work early hours, like us, on a morning show or late night and struggle too fall and stay asleep. the fda has improved merck's new insomnia drug. it's better that that blocks chemicals in the brain, but helps keep people awake. the drug does have the potential to cause sleepiness and could impair one's ability to drive a car. the fda cautions people, shouldn't take more than one pill per night. that's good advice. coming up on the show, the big corn effect. one large retailer says it's starting to -- the virtual currency is paying off in a big way. we'll try and find out why. o hi? 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

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and these are your headlines this morning. the german economy contracts as france stag nates, pushing bond yields to record lows. cisco beats estimates but flashes send shares lower after hours. and electrolux may be looking to buy ge's appliance unit. the company tells cnbc it has no comment. overstock.com is known for selling closeout and brand new merchandise at below wholesale

prices. but the online retailer has been at the forefront of the bitcoin revolution. seema mody is at cnbc headquarters with more on this story. >> we have to love the bitcoin story. overstock, based in utah, was the first major retailer anywhere in the world to start accepting bitcoin as a payment. the ceo patrick burn recently told reuters he expects bitcoin sales to add 4 cents to the company's earnings this week. they expect sales of $6 million to see 8 million, most of it from new customers. so far, bitcoin sales have total dollars about $15,000 per day. he expects to do $1 million in sales per month by tend of the year. now, overstock began accepting bitcoin in january. the first company with at least $1 billion in sales to do so. bitcoin now accounts for about a quarter of 1% of total sales. overstock users coin based process the bitcoin payments.

bit concosts the company less than $2 cents per transaction. on transaction costs are meaningful, to overstock has raised margins. shortly after overstock began accepting bitcoin, other companies followed suit including dell, dish network and online computer and hardware retailer newegg. coindesk says more than 60,000 merchants worldwide now accept bitcoin. overstock plans to start accepting bitcoin from international customers. on wednesday, overstock shares closed down by 1% while the value of bitcoin fell 4% to just under $545. disappointing foss those digital currencies. seem m seema, thank you so much for that. if you thought playing board games would never amount to

anything, think again. this 24-year-old conrad buchard has just been crowed the u.s. scrabble champion, the 25th national championship was held this week in buffalo, new york, with 525 players from 11 countries. bouchard started his name with the word zilch and finished with just the opposite, the title and the $10,000 prize. among the words on the winning board, florigen, trooz, venerate and barf. new words starting next year will include hash talking, selfie and bromancep. tommy hilfiger's apartment is back on sale again. it has views of central park and fifth avenue. it was put on the market back in 20308 and again last year. he has relisted the property as it's looking to spend more time in connecticut where his

children are now attending school. coming up on the show, walmart gets set to report earnings and investors will be squarely focused on the u.s. where sales have declined for the several quarters. we get a preview of walmart earnings, coming up next.

welcome back to the show. here is what's going on in the european equity trading session. we're a little bit mixed. the ftse 100 bucking the trend this morning on the back of higher qe numbers, up 0.2%. there you go. this is the reaction to the weaker than expected growth numbers coming out of germany. unexpectedly germany contracted in the second quarter. the xetra dax is down modestly by 0.3%. we just had comments from the german economy minister saying the german economy is likely to grow again. less than a year he says risks from abroad have certainly

increased, but we must stuck to european economies. the german den-year yields have fallen below 1% this morning to another record low. but we also saw auction this morning and after that, which surprisingly -- not surprisingly it saw very, very strong buying into that auction. that's when we saw yields ticking higher. the ten-year french yield closedlty record lows 1.4% and the ten-year u.s. yield, 2.417%. let's give you a look at what's on today's agenda in the united states. weekly jobless claims are out at 8:30 a.m. eastern, forecast to rise 6,000 to a total of 295,000. also at 8:30, july import prices expected to drop 0.3%. walmart reports earnings before the opening bell as does fellow

retailer kohl's. after the close, we hear from applied materials, nordstrom and jcpenney. at this point in time, the s&p up 1.3 points. the dow jones off less by one point and the nasdaq could fall by 0.5%. maybe bargain hunters out there. as mentioned, walmart reports second quarter results. analysts forecast the retail giant on revenue of $119 billion. the company has missed sales forecasts for the past five quarters. u.s. same-store sales are expect theed to return to positive territory, though. walmart recently replaced its u.s. sale with blet farne. ken perkins is president at retail metrics and joins us now. we saw a couple couple of quarters of negative same-store sales growth. are we going to see a sixth

quarter of declines? >> good morning, yeah. my sense of things is that the quarter was slow. comments back in july on this network suggest sales have been slow and i would not be surprised to see a sixth consecutive quarter of same store seams growth in the u.s. >> what are you going to be looking at in the kul today? they have launched a number of nishltives. i mean, they're consumers have been struggling. what are you going to be looking out for? >> yeah. we're looking for several things from them on the call this morning. i would like to see if they guide lower for the third quarter for an eighth consecutive quarter of dining lower. we're looking at how their every day low price initiatives are gaining traction with the consumers. i want to hear comments on the e-commerce build out, e-commerce global sales last quarter were

up 27%. i'd like to see that continue to move. also the roll out of their small format stores, the walmart express enable the market stores as they try to gain trips there. the 5% compes from that particular format last quarter and we'll background looking for how that is progressing and if they decide to accelerate the growth. >> ken, briefly, as we just mentioned, the company gets a new ceo. more of the same or a major strategy shift? >> i think you're going to see more of the same. the strategies that they're implementing right now seem to be the right moves at this time. and as a new ceo and he's only been at the helm for a short period, i don't see changes right now. >> ken, thank you so much. i'm carolin roth. we'll be with you tomorrow. collection is here. sumr

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good morning. welcome to "squawk box." new developments from the euro zone. germany and france in an economic funk. we already know about italy. late breaking news, cisco drops the ax on i think 8,000 workers after rolling out results, not all in this country, thankfully. and a late scratch, tiger dropping out of consideration for the ryder cup to let his back heal. it's thursday, august 14th, 2014. and "squawk box" begins right now.

good morning, everybody. welcome to cnbc. i'm becky quick along with joe kernen. andrew is off today. germany's economy contracted for the first time in more than a year and france's economy stag nating again. the german ten-year, the bund is now looking at a yield of 1.016%. the euro at this point, which is the one to watch, the, as well, looks like it's trading at 1.3379. if you follow up with what's happening in the major european equity markets, you'll see some red arrows. in italy, things look down 1%. back here in the u.s., stocks are higher