welcome to worldwide exchange. >> hi, everyone. i'm seema mody. here are your headlines from around the world. >> it's a global market sell off. european stocks follow asia and wall street lower as bond yields continue to strike and the euro hits the highest level since february. >> adecco announces the departure of its ceo and cfo. >> we hear on the ceo on why

it's deal with nokia makes sense. >> alibaba is looking to invest in micromax with negotiations under way. good morning. welcome to the show. we have the norwegian central bank. 7 out of 13 economists expected a 25 basis point cut but we didn't get that and as a result of that we're seeing the norwegian crown rising. the developments in the norwegian economy have been wrongly in line with the march projections. the krone strengthening after that position. also saying from the info received recently still prospects, the key policy rate

will be lowered so still maintaining a fairly dovish bias here. >> of course this is norway western europe's organization. it's been hit by the fall in oil prices we have seen. the rebound in oil prices reducing the chance for the central bank to cut rates. rates leaving at a hold and potential rate cut in the month of june. you can point out that norway has been not just hit by the drop in oil prices but dealing with unemployment very high and surging house prices as well as the strength in it's currency not good for exports. >> yeah and i think the development we've seen in the euro the last two or three weeks with it's massive appreciation has also helped them make that decision but many people think this was a very close call. let's get instant reaction to this with the head of global fx strategy. good morning to you. your reaction. are you surprised? >> our house view was that it

was a close call but more likely to get 25 basis points. personally, i'm not surprised by this. if you look back at the december statement they make a very preemptive action and they tied that action to cut the rate by 25 basis points to the massive decline in oil prices. if you look at what has happened to oil prices oil prices are actually up by more than 25%. so this is providing a good push into the economy. at the same time the euro zone is showing signs of picking up. one of these countries where it has been less vocal about the currency strength. it's quite important to keep that in perspective and that is because they have an inflation

rate close to target compared to others. it's massively undervalued. >> massively undervalued. government bonds have been selling off for a number of days. the yield on the u.s. ten year rose for the eighth straight session yesterday. ending the day at its second highest level of the year. now in europe sovereign borrowing costs hit a 2015 high. the bund yield is trading above .5%. many had expected the german rate to turn negative due to the impact of the ecb's trillion bond buying program. italy has seen the sharpest rise last week nearing 2%. what's driving the raise in rates? the euro zone inflation rate was flat in the month of april after being in the red for four months. they expanded for the first time

in three years but many questioned whether macro economic factors are driving the move lower. some of the traders i speak to have been calling this reversal in the bond market brutal. maybe going long bonds has welcome a crowded trade but no one is expecting the size and the scale of this sell off. does it continue? >> it was an accident waiting to happen. bond yields have been exceptionally up. normally low for a very very long period of time. so a certain extent that was justified by low inflation rates but what's waking up the market right now is that a few months ago brent crude was trading in $45 barrel. right now it's approaching 70 again and bear in mind that as we enter the second half of the year the baseline effects in inflation are going to wash out. so i think there is a large reinflationary element in what's driving bond yields. >> the expectation has risen

thanks to the rebound in oil prices but what about the elevated fears when it comes to this uncertain macro environment plus the greece jitters continue. wouldn't that send people into bonds sf bond is. >> first of all, let's talk about the global economy. china is slowing down. we're talking about a gradual slow down. a structural slow down which is by no means a hard landing. the u.s. is doing. probably going through a mid cycle slow down but not a structural slow down and there's clear indication from the euro zone surveys and hard data that euro zone is picking up and it is picking up because of the confidence that it's getting from the ecb's qe as well as the dramatic fall in oil prices. as far as greece is concerned, so far the market has traded greece as very much an isolated

event. >> we're just getting comments from the greek finance minister. he says greece will remain in the euro and shows a deal is within reach. i want to come back to the bond market route. some analysts out there say this is a sell off for all the wrong reasons because break even inflation isn't rising. it's moving sideways because we're not seeing an equity market rally at the same time and this sell off is lead by europe and not lead by the u.s. do you agree with some of those points? >> it's lead by europe to the extent that the solution is getting closer at which point we may get into an environment where central banks will be more willing to draw some of the monetary policy stimulus. i very much doubt that. i very much doubt that greece is actually playing an important hurdle right now in keeping global growth lower compared to

what it should be or preventing central banks from with drawinglydrawing drawing liquidity. i think 70 to 80% of that is the pick up in oil prices and the anticipation that as the baseline heights are going to start washing out. >> we have the dollar trading higher on the day. is it massively overbought at these levels? >> you have to remember one thing, there have been the build up of shorts from the macro hedge fund community over the past five to six months has been extreme and totally unprecedented. which means when europe bottomed out and started turning, they were closed but at a very very slow pace which means that stops are getting now triggered and the short squeeze can be brutal. on one hand you're fighting and

on the other hand you're fighting with a lot getting squeezed. >> so it will revert back to parity? parity with the dollar? >> no i think unless something terribly wrong goes with greece i cannot see any reason why the euro dollar should trade to parity right now. >> such a different call versus two months ago. people saying the euro is headed to parity with the call given the quantitative easing program. >> thank you for coming in. head of global fx strategy. britain's margaret thatcher is some of the names on the most inflew influential european leader list that spans the last years. if you disagree or have a suggestion of your own, get involved and tweet us using the #cnbc leaders. >> now the bank of england admitted it's data on british

debt sales have been wrong. foreign purchases of guilt sales hit an all time high of over 28 billion pounds in march but that figure has been revised by half to 14.8 billion. the boe says it was a clerical error. >> let's have a look at the markets. 1:15 minutes into the trading session. stoxx europe 600 off. it's mixed earnings report we got out this morning. we're still in the thick of earnings season. the thing we've been talking about for the last two weeks is the bond route and spike in yields putting pressure on equities and then we have the persistently high euro-dollar exchange rate. the ftse 100 as voters are going to the polls off by 0.9% and

bigger declines for the cac 40. also stock specific news. i want to talk about adeco in switzerland. that stock is trading sharply lower after the surprise departure of the ceo and cfo. shares off 6.3%. the resignations overshadowed the swiss recruiters 45% jump in net profit. i jumped on the conference call about 45 minutes ago and i asked the ceo was it your decision to leave and he said yes there's no risk in the strategy and no risk in the board as well. why did the cfo leave? he is leaving the company as well. that's quite a shock for investors today. the company says it's strategy will remain on track. no change there. no hiccups according to the chairman but the shares still up 6.2%. let's continue with a look at the bond markets where we're

seeing a continued sell off with the yield at 65 basis points. it was five basis points just three weeks ago. that's quite incredible. the ten year treasure yield that has been rising for 8 consecutive sessions now and that's the longest stretch since march 2011. we are currently at 2.23%. in term of the italian yield it hit 2% earlier this morning. that's the first time since december. now just below that. looking at the currency markets, we're still seeing the dollar on the back given the disappointing adp. kurnlt we're seeing the aussie dollar under pressure on the back of mixed employment data and take a look at the 4.5 month high against the euro. down by 0.9%. that's after the bank remained on hold in terms of the interest

rate and meantime let's also check in on markets in asia. sri as always in singapore. how are we looking? >> we're quite grim at the moment when you look at the regional markets and sentiment wise they have been affected by the route that we have been seeing in the european bond markets and those yields are moving back higher. elsewhere, one of the underperformers in the region is china yet again. the third straight session of losses for the shanghai composite composite. it's down to fears of a greater clamp down on margin financing. remember margin financing, it's about 15 to 20% of daily trade and volume. so if we do see a clamp down by the regulators this could joke off inflows and be negative before the market. another market i want to talk about is australia.

we saw some market data today and that does build the case. we didn't get a great deal of clarity when they moved rates by 25 basis points earlier on in the week. the markets trying to guess as to where we are exactly in the cycle. it's a little bit more neutral from a rates perspective or is there going to be another rate cut further down the line? not a great deal of clarity now. that's a reason the market is on the defensive. also the paingsbanks are a big weak link right now. capitalizing to really buffer their balance sheet against the sluggish economy and against more stringent capital requirements so the regulations there coming into effect and hurting the banks and dividend too. grim day all in all. tomorrow we'll be quite cautious

ahead of the payrolls. back to you in london. >> sea of red behind you. for now thank you so much. coming up on worldwide exchanged, the visual google. we speak to the founder of the app promising to change the way you search the internet. plus the bio tech boom continues. after another huge deal the sector will be discussing if there's a bubble taking place in the bio tech sector. meet the hambugerlar. find out the reaction later on in the show.

welcome back. today is election day in the u.k. today is a live shot of the polling station in london. they opened two hours ago and will close at 10:00 tonight u.k. time. voters are electing members of parliament and 650 constituent constituentcies across the country. >> this could be down to the chinese lunar new year holiday in february. shares hit an all time low this week. they're down almost 15% since the ipo and lost 23% this year.

>> just want to point out something that have been working on according to my sources as alibaba looks to expand overseas according to people i speak to close to the matter alibaba is looking to mull a stake in micromax india's top leading smartphone player and talks are taking place between the two companies. that's alibaba and micromax india's smartphone player. we're not sure type of investment that's going to be made but it could be a sizable stake in micromax. just watch this story. of course it's a developing story and one that we'll watch ahead of alibaba's earnings results. analysts have been wondering now that we know alibaba has such a cig any cabot significant stake in china's market, and sometimes you have to get a strategic partner to enter a market. this could be the case with india. >> expansion has been primary for them because of the economy

story but also because of the crack down on the counterfeit goods by the chinese government. they are said to be in identity credibility crisis. alibaba is struggling to recover from that. they have to look at different countries and different growth avenues. expansion is costly. marketing is costly. expansion into other areas and into other economies, that is very very expensive so that may be weighing on the bottom line at first but that's obviously what investors are looking out for especially as shares have underperformed of late. underperformed the u.s. markets and other ipos and also other chinese companies listed elsewhere. >> it's been quite the ride because one of the big ipos on the new york stock exchange in november 2014 but the stock cig

any kanltly cool -- significantly cooled. joseph tsai will be on squawk on the street today at 9:00 a.m. eastern time. >> shares are under pressure as second quarter industrial profits missed on weakness in it's digital factory unit. they also announced a further 4,000 job cuts. annetta this is additional job cuts to what has already been announced. >> yes that's addition no to what has already been announced. looking at the energy unit it will be less harsh here in germany than previously reported. previously there were around 3,500 jobs to be cut here in germany. now the number has decreased to roughly 2,000 because of course labor unions here in the country are very strong and the labor council in germany is very strong. let me run you through the numbers, though we have a disappointing set of numbers here. above all the industrial margin is disappointingly low and

analysts are saying they don't see how siemens wants to raise the margin during the course of this year to the target of 10 to 11%. the main problem is the energy business. here we have a drop in operating profit of 34% but also their digital hub is not performing as they expected. analysts had expected. of course they are banking on the fusion of digital and their industrial expertise and they see it the way forward but the business is underperforming. back to you. >> thank you so much for that. elsewhere in germany, first quarter operating profits up 40%. the country's second largest bank was boosted by an increase in market volatility and trading activity. flip flopping between red and green. currently high by less than 0.1%.

munich in focus. 16% drop in first quarter net profit. this is what the company reported although the fall was less than expected. this as they contend with a very competitive market environment and of course the pressure from ultra low rates and last but not least, henkel off by 1.3%. first quarter operating profit missed forecast as it grapples with challenges in russia but they posted a small sales beat and maintain it's full year outlook. he gives us his current take on raw material costs. take a listen. it's pretty much unchanged. i don't think it has any impact on inflation or deflation. it's slowly going down but no change in raw material pricing the last four months despite the

dollar. >> shares off by 1.2%. in the past he's been quite re resilient to the downturn in russia. do you think that might be changing? >> they're saying that the russian crisis is hitting their operational profits by 100 million euros this year so they don't expect particularly improvement there but what is surprising actually that other regions are making up for that lower revenue in russia and eastern europe so we have historical revenues for the first quarter and above all, the united states and asia and latin america are doing it fashionally well but now doing the conference call they were saying also that it's still stagnating so no relief here despite the silver lining on the horizon when it comes to economic growth. also in the euro zone. when it comes to the divisions, the body care unit is doing it's best. analysts are saying this is a

positive surprise but the negative surprise is in the adidas business. the margin is lower than expected and here the company has to do actually more to improve the business in order to convince analysts and shareholders alike. with that back to you. >> thank you for that. >> mcdonald's has revived it's 90s marketing character the hamburglar. it has sparked strong reaction with people wondering if mcdonald's is striking the right tone and if the revival is all sizzle, no steak so far. do you get it? that's hamburglar 2.0. how does he compare with another mcdonald's character. ronald mcdonald. would either of these guys really persuade you to buy a burger and fries? if you want to join the conversation get in touch with us at worldwide@cnbc.com or our personal handles you can see on

the screen. >> are you tempted by these -- >> i personally am not but i think it depends on if perhaps it lures in some of the younger folks that typically eat at mcdonald's but ronald mcdonald, growing up in america i would be so scared of him. i would want to hold my mother's hand to go inside because i thought he was so scary and that has been the response over the past couple of years. mcdonald's said all right we'll come up with a new iconic person to represent our fast food chain. i don't know if this is better. >> some out there on twitter said he's better looking. he's hot. that's what a couple of people said. >> wow. >> i don't know. mcdonald's has got much bigger problems than this. they need to revive their fortunes and get people coming to their restaurants and they need to change their menu. >> listen steve easterbrook. they announced the turn around plan this week. >> the market was disappointed. >> they were. stock reacted negatively but sometimes these plans take time. let's see what happens.

kmurpg coming up on worldwide exchange. telco earnings we analyze the calls for further mna in the sector. don't change that channel.

it's a global market sell off and the euro hits the

highest level since february. >> they take investorsdy surprise announcing the departure of the ceo and cfo. the news overshadows record earnings with shares. >> alcatel lucent confirms full year targets. we hear from the ceo on why the deal with nokia makes sense. >> alibaba is looking to invest in india's number one smartphone player micromax with negotiations underway. welcome, everyone let's take a look at the european markets and how they're fairing this morning on thursday. despite the move to the upside in the euro it did hold on to positive territory in yesterday's trade. right now not so much here on thursday morning. stocks significantly lower across the board. the ftse 100 down better than 1%. the xetra dax down about .3% and part of that does have to deal

with investors reacting to the strength in the euro. that's not good news for the exporters that benefit from a weaker currency. >> totally. now why is it above that handle? well it's because we have seen that massive rise in yields. bund yields in particular. not too long ago we hit a record low there about 8 or 9 basis points. now if we take a look at bund yields they're closer to 65. ten year bunds 65.7. the ten year treasury note 2.23. it rose for the 8th consecutive stretch yesterday. the second highest level of this year. moving on shares in alcatel-lucent higher after they merit losses from 73 a year previous. this emits slower spending in the u.s. alcatel-lucent is preparing for

a take over by nokia. speaking earlier on the channel the ceo was asked about rational from the deal amid criticism from the shareholder. >> it's very clear combining those two groups will allow us to build very skilled and company. everyone agrees it's the right timing to do that. we have the right combination in the right timing. and whether to stand alone or dispose of assets we're not creating as much value as this combination. >> let's stick with the telco space. shares in bt marginally higher after the company raised it's free cash flow outlook for the year ahead. revenue was down year on year but earnings before tax rose to 6.27 billion pounds. earlier our colleagues on squawk box spoke with the ceo and asked him what could help the

company's top line growth. >> the revenue overall is flat. that's true but there's significant head winds. the u.k. public sector is a key sector overall. because of austerity that's been tough. there's also a big head wind in terms of impacted regulation. that's 180 million pounds a year. despite that what you can see is some parts of our business growing very very strongly. so our broadband and tv revenues growing by 16% overall for the consumer divisions. there's some parts really coming through and the outlook is good. >> let's get more analysis on these number where is the senior analyst who joins us now. going into the numbers you were focussing on two things. first of all on the guidance. that looks to be positive and second of all on key broadband additions. how is it doing on this front. >> on the broadband front it was stronger than expected. it added 120,000 and it confirms that the market in the u.k. remains a very strong growth

environment. we previously saw sky deliver very strong numbers as well. that was a very very positive number and on the guidance they sort of reaffirm their target and bumped up free cash flow target which was a 3 to 4% uplift. >> there have been some concerns about the halo effect b and i know you shared those concerns. but you don't think it's actually happening. >> their share is now below 50% to the overall broadband market. when they were launched 18 months ago they were well over 50%. where i would also point out is that they're still only adding around 50,000 customers. that's relatively anemic compared to the rest of the growth. the bt sport has been a success

but growth in bt sports customers is plateauing and the benefits are less than they were previously. >> you know, guy, i just wonder that going forward these large incumbent players in order to see the growth they're witnessing over the past couple of quarters do they need to make an inorganic acquisition? and what happened with the fact that interest rates are rising here in europe and the u.s. does that curtail them in this space. >> first if you look at bt's guidance for next year it's signaling it's a nil growth company. so that explains why they're looking to buy ee. essentially they're looking for other potential long-term growth drivers. that's one type of acquisition they're looking for. on the bond and yield perspective they benefitted from the below yield environment. the dividend yield is only 2.7 and 2. 8%. it's growing strongly but it's

not the yield company it was expected to be five or six years ago when the yield is over 4%. that is a challenge for bt but also a wider challenge for telcos which are obviously generally all high yielding companies. >> speaking of consolidation, it's quite interesting that you see potential consolidation happening and you say that could be a precursor to a much bigger play out there. what could that be? >> it's always been marred by politics and geographic foot point overlap. this has been a theme for the sector for probably the last 15 years but as we go through the process of currently consolidating in markets. mainly bt is logical overtime. the next stage would be incumbent looking to get together and there's always been talk. in fact it was first muted in

2001, 2002. what we're suggesting is hypothetically if the politics and the environment can create that type of deal then there will be other potential transactions and there's always been talk for example, of telecom doing something more collectively. that was historically -- they used to have cost share holdings. they got rid of those. that's been out there as a possibility. >> still just a possibility. need to watch that space. thank you so much. >> tesla shares moving higher following the first quarter beat. shares jumping 15%. we look at the road ahead for tessa. >> shares of tesla moving higher after hours by more than $5 here in the united states after the company reported a narrower than expected loss for the first quarter. tessa losing 36 krenltscents a share.

revenue came in slightly better than expected at 1.1 billion. a big focus is always the number of vehicles tesla delivers. in the first quarter they preannounced deliveries of 10,000. they increased that by about a dozen. for the second quarter tesla will build at least 12,500 vehicles and deliveries will be between 10 and 11,000 vehicles. the model x which is the next model coming from tesla, that is the high end suv. that's on schedule to come out in the third quarter and tesla says it is on schedule to begin battery production at that nevada plant in the late part of 2016. tesla reporting a narrower than expected loss of 36 cents a share versus the street estimate of 50 cents a share loss. that's the story here in the u.s. back to you. >> what i find striking is the fact that elon musk who is

always very flamboyant. >> yes. >> he said the batly could be bigger than the car. it's going to be a utility company. >> the fact that earnings beat expectations and we saw the company see sustainable growth in it's model s division that wasn't what analysts focused on. it was the interest and expansion into batteries that caught the attention of investors and they say that's the way the stock reacted positively. >> shares have risen since they announced they have risen by 22%. that's quite a turn around. >> but this is one of those me men tum -- momentum names that moves to the upside and down side. this stock can trade in a volatile manner. >> but remember the call a couple of days ago, they said the bull case for the stock was

450. >> definitely a bull call. the stock is up 15% over the past one month. so rising expectations ahead of earnings and they beat expectations. >> yeah. moving on. deflation causing trouble for both central banks and now football teams. after almost four months an independent investigation into whether some footballs were illegally deflated in a new england patriot's game is finally over. the results implicate one of the league's biggest stars, patriot's star quarterback tom brady was suggesting he was aware the team was actually deflating the ball. the nfl is considering possible punishment for those implicated in the investigation. >> this was a really big story around the super bowl. interesting to see that development. from one iconic figure to another, pope francis pulled off some basketball tricks in st. peters square on wednesday under the guidance of the harlem globe trotters. they met with the pope during

his weekly audience and presented him with a famed jersey. how about that? pope francis is written on the back of the jersey and there you go. the pope in action with the harlem globe trotters. pretty amazing. >> not doing too badly. he wants to try it. >> oh he almost got it. >> he could do it for a second longer than i can do it. >> great video. it's a super market sweep as another big name posts weaker sales. we take a look at the stock and the sector. how to trade it coming up on the other side of this break. new york state is reinventing how we do business by leading the way on tax cuts. we cut the rates on personal income taxes. we enacted the lowest corporate tax rate since 1968. we eliminated the income tax on manufacturers altogether. with startup-ny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. all to grow our economy and create jobs. see how new york can give your business the opportunity to grow

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>> shares are down sharply as shares continue to decline. shares fell 2.9%. this follows weaker sales and earnings with tesco posting the biggest loss in it's corporate history. let's talk more about u.k. growth with the managing director joining us in the studio now. you would think that after tesco's big loss we have now hit

that. >> people think this is a bit of a kitchen sink. all three have shown us this is a long hard road ahead. but the trends people want to spend more conveniently closer to home. people want good value. people want a discount format and the fact that most of our large supermarkets are exposed to large store where is people don't want to walk a mile to buy a pint of milk anymore. that's the big problem. >> i know that they're losing shares to the big discounters but if they can't be profitable and increasing shares in market sales now in an environment very conducive, when can they? >> that's the point. what you're seeing is the

consumer is spending a little better but the consumer is focused elsewhere. a lot of nonfood retailers are doing well in the u.k. frankly they had a lot of free publicity last year and they're not getting it this year but they're still growing much faster. that has to tell you. this isn't just about the economy. people are shopping differently. >> that bring mess to my next question. do you think the underperformance of the supermarket space provides broader concerns of the health of the u.k. consumer? you would think consumers would be spending more and there would be a boom for all big supermarket players.

>> there's an element of that but largely it's the supermarket troubles themselves. itself the way people spend the changing. you have the likes of john liuewis that have done well. >> warren buffet called tesco one of the biggest mistakes. would you be a buyer of the stock right now? are you a fan of the turn around strategy right now? >> it's very early days. it's a very long road ahead. they had a big availability problem. >> the retail experience? >> exactly. one of the really quick fixes so at least people that are coming into the store end up buying stuff in there. they find stuff they want to buy. the real problem is bringing back newer people into the

stores stores. >> does that weigh on profitability going forward. >> it feels like it will struggle for awhile. >> next 6 to 8 months you will say? >> clearly. >> clearly what they're doing, that's helping a little bit even though there's impairments for example. if all of these measures don't help. if the price cutting and the selling off of property all of that does not help these firms what's the end game for them? are we expecting to see consolidation? >> it's very interesting because i think the government has more or less said we like the structure of big markets but that was done at a time when they were sodom nanlt there was no chance for any-- so dominant there

was no other chance for competition. i think you do have to reevaluate the best structure and can you actually see consolidation. you need to see wholesale store closures. doing 30 or 40 shows here and there and taking stuff out of your pipeline is not enough. we need to think about big stores going out of business. >> do we need to see consolidation in the space in order to see success stories and secondly are we going to see private equity money come in and try to turn around some of the companies? >> it's interesting. it's always been talked about that the backbone of these companies is the fact that they own such a lot of real estate and the fact is you can level up these companies and bring in a lot of debt and try to reinvigorate them. proper city worth a lot less than you thought. at the same time as the retail profitability has collapsed as well can you really build in a whole lot of debt to these structures and profits that are questionable as well? >> that seems to be the

discussion among investors. pleasure to have you on. great discussion on the supermarket space. founder and managing director. now switching focus, citi group, jp morgan barclays and rbs are expected to plead guilty to rigging the foreign exchange markets and pay billions of dollars in combined penalty. the wall street journal says u.s. authorities will announce separate settlements as soon as next week. the banks are expected to plead guilty to criminal antitrust charges for alleged collusion by traders. ubs which cooperated in the u.s. probe will also reach a settlement but avoid criminal prosecution. taking a look at shares of citigroup, jp morgan and barclays all trading lower in today's trade. >> lumberly inquiry at a tos will halt sales of chinese wood flooring immediately. they face dozens of lawsuits over the safety of the products.

lumber liquidators has been under fire since march when they aired a program saying the chinese flooring contained high levels of a known carcinogen. they would neither confirm nor deny the move but an announcement is expected today. >> a big deal in bio tech. alexion acquiring synageva. it's an ideal fit providing life transforming therapies for an increasing number of patients with devastating diseases. let's talk about the landscape. biotech were among the best performing stocks in the last quarter. joining us to discuss is the ceo of silence theer pudrapeutics. i want to focus on rare disease

drug angles because alexion paying such a hefty price tag. that's focused on ultra rare diseases. why are they paying such a big sum for a company targeting a very small percentage of the customer population. >> there's a variety of reasons. some is financial and some is scientific. in some ways the small population is easier. it's more quantifiable. so that plays from a scientific basis. from a financial basis and obviously this is now a very hot topic in terms of hepatitis c. fda and regulators have given companies such as alexion easier access to orphan diseases where they can be promoted to go after

diseases they ordinarily wouldn't target. >> but by being the only player in this market these companies can command high price tags but the question is for how long. because these companies will at some point deal with competition as well. >> there's always competition and pricing is probably one of the number one issues in bio tech at the moment. what is the right price and really one of it is a function of the life cycle of a product. it takes ten years to make a drug so a lot of costs are front end loaded. the risk is extremely high and any business with that business model is always going to struggle. there's a high failure rate and obviously people have to be incentivized to fail in order to succeed. it's a very very difficult question as opposed to your previous guest that was in supermarkets where it's easier than it is a ten year drug if you like. >> i want to talk about your

company. you just finished another funding round. how difficult is it to be a small company in this space where investors are fickle. >> one is a question of geography. in london it has been historically very hard. the london market has been addicted to oil and gas and mining for a long time and even after 2008 and 2009 that trend is coming to an end and there was almost a complete lack of capital for bio technology. now because of the enormous inflows into the u.s. there's a material valuation gap between u.k. companies and even european companies so i think we have been a beneficiary of that in

the sense that we have been lagging in terms of our access to capital. >> you're no stranger in this space because you're a citi trader. what do you make of the valuations in the u.s.? >> i think bio tech is hard to understand but there's a lot of technology break throughs going on. such as in our industry getting an rna molecule cell had pretty ground breaking break throughs in the last couple of years. oncology has changed entirely. the survival rates in blood cancers so there has been a genuine technology break through. >> this is a great time to be in the biotech space given the amount of deals. are you looking to sell your company to a larger company.

>> no, not particularly. i'm looking to make meaningful drugs which have meaningful impacts. that's maybe the best way to put it. >> thank you for joining us here on worldwide exchange to discuss the moves we're seeing in biotech. let's get a check on european markets on this thursday morning. remember we had a mixed couple of days of trade when looking at equities given the strength in the euro. the euro is now at a 10-week high against the u.s. dollar we have been seeing the european indices come off their high. the dax down 1%. ftse 100 down by 1.2%. >> you were talking about the rebound in the euro against the dollar we're at a ten week high. 11355. slightly higher on the day but the dollar still under pressure from the disappointing adp data. the aussie dollar lower on the

back of mixed employment numbers out of australia. looking at the bond markets this is where everything has been happening. 8th consecutive rise 2.24% we're at 68 for the ten year bund yield. that's continuing. >> interestingly enough the moves we're seeing in the oil market is contributing to rising inflation expectations. that's one of the listens for bond yields higher. oil prices in positive territory of a 5% gain just this week. still to come what's the price of lunch with the boss of apple? we reveal how much two people paid for the privilege, later in the show.

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welcome. you're watching worldwide exchange. >> it's a global sell off. u.s. futures indicating a lower open as investors digest the warning from janet yellen. >> off the hook tessa ceo elon musk says demand for the energy products could overtake car shares in the future sending shares higher. >> zynga slashes 16% of jobs. investors bet on the ceo's turn around plan. >> cnbc sources indicate that

alibaba is looking to invest in india's number one smartphone player with negotiations underway. the volatility continues on wall street. and it was exacerbated by fed chief janet yellen yesterday saying that stocks are overvalued but i wonder if the fed is a contrary juanindicator for markets. by the end of the next year the housing bubble had burst and stocks plunged about 30%. july of 2014 biotech stocks are overvalued. since then bio tech is up 30%. >> wow. >> another question that you may want to ask is should i fed chair even comment on markets? i think, you know they're not a player in the market in the equity markets that is.

a big player in the bond markets over the last couple of years but not necessarily equity markets. do they have insight? of course they do but is it their place to be commenting on that? >> although it seems like janet yellen is increasingly focused on what the market is saying. when you take a look at the stronger dollar and impact on export growth and multinationals profitability she has referenced the stronger dollar and impact on the economy twice now in her prior two fed statements. something we haven't seen so clearly this is the new normal. the fed playing a more active role in markets and the economy. >> should we call her chief markets commentator. >> strategist. let's take a look at u.s. futures because yesterday we did see stocks move to the down side. the dow is down about 89 points in premarket trade. the s&p 500 down about 8 points and the nasdaq with a loss of around 20 points. the dow with as much as 195 points in late day trade giving back almost all the gains for

the year. the dow is in negative territory for 2015. the big story has been europe's out performance in comparison to what we're seeing in the u.s. but even here in europe stocks have come off their highs and a lot having to do with questions on quantitative easing and the impact on the real economy as well and you have to say the moves we are we're seeing in the bond market is also adding a little bit of pressure when looking at equity movements. right now the xetra dax which is the out performer, trading below 12,000 which is a key psychological level. so we are down significantly here at 10:00 a.m. in london. and in france 4,907 is a trade down 1.5% and let's take a look at the ftse 100 down about 1.2%. bonds a big part of the focus bt but the move is at a ten week

high. >> why is that? because we've seen that spike in bund yields. the ten year bund yield. a coup of weeks ago it was at a low of 8 or 9 basis points. it's getting closer to 70 basis points. what a sell off we've seen. 2.25% it has risen for the 8th consecutive session. also looking at the currency markets we're still seeing some dollar weakness as a result of that. that is because bund yields are rising faster than treasury yields. the euro dollar now unchanged. the dollar is some what lower against the japanese yen and we're seeing some weakness here because of mixed labor data. >> it seems to be affected by two things. the comment about valuations in the equity markets and also the

turmoil that we have been seeing in your bond markets in europe. so the loss leader is the market mainland chinese equities. representing the third straight session of losses. what investors are concerned about with the market is the clamp downs by the regulators or margins. this is about 20% of daily traded volume. so if a further clamp down was initiated by the regulators in beijing it could choke off the inflows and could be negative for the markets. let's switch gears and talk about australia because it was another loss leader today. in fact you're looking at three month lows here for the aussie index and it's on track for nearly 3% for this week. if it is sustained it would represent the second largest drop this year. there's concerns that the

central bank could be doing more. they cut rates by 25 basis points early on in the week. seemed to be quite neutral and that upset the markets. i think they wanted to see more of a dovish statement and more of a promise to keep the door open to more rate cuts. that's to settle the market as has the earnings numbers from the banks. let's not forget the nab, one of the big lenders down under announced they will undertake 5.5 billion aussie dollar capital raising to buffer it's balance sheet against capital requirements and a sluggish economy and that takes it's hold on the dividend and that has been a theme across the banks earnings in australia. a lower dividend pay out. >> thank you for that. as we have been discussing a warning from u.s. federal reserve chair janet yellen. one that moved the market. she says there are potential dangers in high stock market valuations but is not seeing

sign of a bubble. speaking at a conference with christine lagarde she was asked about that. >> we have seen a compression on high yield debt which certainly looks like a reach for yield type of behavior. i guess i would highlight that equity market valuations at this point generally are quite high. they're not so high when you compare the returns on equities to the returns on safe assets like bond which is are also very low. but there are potential dangers there. >> be sure to tune in to squawk box u.s. for two high profile interviews later today. they'll be speaking to tim geithner live at 7:30 a.m. eastern and plus he'll also be hoping to get some insight into the time ofging of the first fed rate hike with charles evans at

8:30 a.m. eastern. >> let's get you a run down of what to watch. weekly jobless claims are out at 8:30 a.m. eastern. new filings are expected to pick up but stay at levels consistent with an improving labor market. march consumer credit alibaba reports before the opening bell. we also hear from price line kate spade, cvs. >> alibaba is set to report fourth quarter earnings before the bell. they're expected to post a slow down of revenue. this could be down to the chinese lunar new year holiday in february. shares hit an all time low this week. they were down almost 15% since it's ipo lost 23%. >> you have insight as to what they could be doing or buying. >> according to my sources they're mulling a stake in india's biggest smartphone maker micromax. negotiations are underway

between the two companies. alibaba, the chinese e-commerce giant and micromax india's top smartphone maker. in order to expand especially in foreign markets like india alibaba needs a strategic partnership to get their foot in the door and that might be what this is. keep an active eye on what takes place here between potentially alibaba and micromax. head to cnbc.com for my full story about alibaba looking to invest in india's number one smartphone maker. >> tesla with a wider first quarter net loss on heavy spending relating to growing the company and launching the model x. but results beat forecasts. it's squeezing margins. demand for tesla's new line of stationary batteries is off the hook. he says it could one day be a bigger business than selling cars. tesla rose 2% in after hours. 204.80. >> it's now a battery company.

>> it's a utility company. all of these analysts covering it as an auto stock, they have to drop it. >> do you think there will be joint coverage now. >> that's a new idea. >> from carolyn roth there you go. all right. whole foods fiscal 2nd quarter profit rose 11% but revenue missed estimates. there's more competition as other supermarket chains are expanding into organic and natural foods. the company plans to open a sister chain of smaller, lower cost stores aimed at younger bargain conscious shoppers. whole foods fell about 11% in after hours trade. >> zynga reporting a narrow first quarter loss. revenue lost 9%. zynga is planning to cut a fifth of its work force or 364 jobs. it's the first major move since

the founder returned as ceo last month. they rose 6% in after hours. germany heigher by 1.3. >> get ready for this, oil, we have big news on big announcement about what to expect going forward from the next analyst with a big call on where oil is going. just stick with us. we'll get you that after this break. there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild.

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all right. oil extending gains after scaling a 2015 high on wednesday. favorable demand and supply dynamics helped crude rally around 50% since it touched a six year low in the month of january. let's bring in the oil analyst at barclays to discuss where oil is headed from here. you actually think it's going down. when you take a look at the fundamentals you have the supply demand equation the dollar

weakening, geo politics too, all of this is working in oil's favor. one trader i spoke to said this is the perfect storm for oil but you don't think the rally is justified. tell us why. >> we don't think we're out of the woods yet. as you said there have been some factors that improved in terms of demand and supply et cetera. but if you would look at it the momentum required for those balances to stay in a draw down category for inventories and stay that way, we haven't touched it yet. if you look at demand it's very patchy. china is a great example. q-1 demand number versus been phenomenal. if you look at the economic data coming out from china, especially increasingly turning out to be fairly weaker. >> we've had a slow down in china. that's something we have known for quite sometime. >> yes but the disconnect is going to weigh on diesel in

particular. the pmi numbers continue to disappoint lower and given the u.s. we have started seeing weaker patches of data. our economists think that's partly to do with the weather but the adp numbers for example have been weak. so in terms of economic data we don't think that's still supportive of oil demand getting the same pace and extending it through the rest of the year and the other important thing is the seesaw effect. the higher the price and swifter it's going we will see producers curtail on their ambitions to cut production. we're see ago announcements from the u.s. already. they said they're boosting their guy dance and output 25 to 30%. >> so that's a bullish indicator. >> that's not a bullish indicator because that brings more supplies to the market. >> but you wouldn't do that unless you thought demand would pick up is my point. >> yeah. demand is picking up. saudis are boosting production

as well. the only reason we had a constructive market in term of fundamentals in q-1 is because it was fairly high. 3.5 million barrels a day. that has helped and will it extend? would fluctuate. >> based on everything that you're saying right now you don't think that the reinflation trade in global markets over the last one or two weeks has legs because we have been putting on that inflation trade, reinflationary trade because oil prices are moving higher so you think we could see a reversal in the bond moves? >> so in terms of oil in the emerging markets we've had several policy makers go on an easing bias et cetera because inflation was no longer a concern and we're already seeing central banks being very

cautious. will lower oil prices bring back reinflation? it depends on a lot. >> that's of course a big concern especially as oil prices rebound but what about the dollar? it's down now 6% from the high it hit in february. don't you think that in itself will send prices of oil higher from here. >> the macro factor has been very constructive as well. the weaker dollar has been baked into the price as well but increasingly there's a disconnect we have unsold barrels in west africa and even in the north sea and this is exactly what we saw on sunday. but the financial markets for oil were very strong as well. that disconnect is growing and the other thing is even in terms of positioning, you have management money positions for oil which is hitting multimonth highs but if you look at

positioning from her chanltmerchants that's high as well. >> what's happening at the opec meeting in june. do you think they'll change their stance. >> the comments we've seen so far, they don't see a reason for a change in stance. a because demand improved and b because prices recovered. the other thing is if they do go back they do need support from other nonopec suppliers as well. that doesn't look like anyone else is on board. >> 115 in july. does it head back to that level this year. >> no. we don't think prices will head back. >> all right. it's been a pleasure to have you on. thank you so much. >> and a really interesting comment coming from the eu. if i were to say that grexit was an option what do you think would happen on financial markets? this is the statement that we're

getting from the european commission president right now. that tells you everything about what can or cannot be said by european officials right now. even if they privately think that a grexit could be a possibility they would never say this in public because of the effect it would have on financial markets. >> next up we're going to talk virtual reality and how this new ecosystem in technology could change the way we search the internet. that's coming up.

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welcome back. where's the first place you're looking if you want to find something? >> google. is it google? well, you could use the camera on your smartphone. the world's largest augmented reality platform lets the user point at any object and search the internet visually. it's including the nfl and nestle. it raised $45 million in march. joining us now from las vegas is the co-founder and ceo of blippar. thank you very joining us. it's either very early or really late in vegas. thank you for your time. what are you updating your

function with today? what's the news? >> so today what's happening is we're launching this new visual firm. and it comes out and it's going to allow people to point their phone at a lot of random things and give them additional information. it's very much based on the philosophy that you're not able to describe everything we are looking at so the search engine given the answer to all the curiosity you have. if you look at the puppy you want to know what species it is and how you take care of it and all of that you point it toward it and it gives you all the information. or you find fruit in the super market that you cannot recognize. there's so many instances in our lives where we look at something

interesting but we don't know how to describe it. that's where blippar is coming into play. we believe the physical world is big and it needs a new search engine. that's what we're building. >> that's the longer term version. i downloaded the app this morning. i tried out the app. i held it against one logo. it didn't recognize it so i guess for now though the application is still some what limited. >> it's limited. it's going to work on -- as of today on like a million objects which is quite a few leading brands and quite a few leading products and sport clubs and music labels or leading movie posters in the world and random food vegetables and a few domestic pets. the world we see with our eyes is really really big and it's going to take us many years to index everything. this problem is a much bigger problem than even what google

has as a company because as i said, like the digital world is much smaller than the physical world but it's brand new behavior and this behavior is here to stay and we are sort of one of the leading companies building upon it and as of today only a few limited things on it but on a week by week basis we'll continue to add new categories and we'll be announcing it. >> i want to get your thoughts on the space you're competing in. it's cool but some say it's a cool technology with no applications in real life. when would we see virtual and augmented reality become a bigger part of our reality and day-to-day life. >> absolutely. the speckkeptics their job is to be skeptical. i believe it will be bigger than the internet itself. last 25 years of the internet

all the infrastructure has been put in place and people have shared an amount of information by tagging stuff, creating websites and taking a lot of imagery but at the same time the planet is really beautiful and much bigger and there needs to be a situation where all the physical world objects is created to digital information. and augmented reality will be the key bridge where people will get a lot of virtual information about things they're looking at. so it's going to be redefining the internet. what is about to happen is actually internet on things. and where every object would become it's own portal. >> just briefly we only have a coup of seconds lef. now you're active in the advertisement space but what about expanding into tv or gaming?

>> i mean we are already working with a few tv companies where we'll be able to recognize live tv recognition of images. and gaming is another industry where a lot of virtual reality players are playing but we're doing cool stuff with disney and a company with a lot of good triggers coming about and we're working with several of them. gaming is definitely an area where augmented reality will have a role to play. >> appreciate your time. co-founder and ceo of blippar. thank you so much. >> let's look at futures. indicating that the sell off could continue. let's bring up the board. s&p, dow indicating a move to the down side by around 100 points. so the sell off accelerating. nasdaq down 27. more on today's price action and what to expect coming up after this break.

welcome everyone. >> these are your headlines from around the world. >> it's a global sell off. u.s. future with a triple digit move lower for the dow as bond yields continue to sell off. >> tesla ceo says demand for energy products could overtake

car shares in the future sending sells higher. >> zynga slashes 15% of job shares as investors bet on the ceo's turn around plan. >> cnbc sources indicate that alibaba is looking to invest in india's number one smartphone player micromax with negotiations underway. >> let's take a look at futures. red arrows across the screen. the dow sliding as much as 195 points. the dow in negative territory year to date. of course this as rates and oil continue to climb and investors trying to digest what the spike in bond yields and rally in oil means for stocks. for this point doesn't seem to be a great picture when looking at the european markets. we're lower across the board. the german markets down about 1.2%. here in europe a big proponent

of the european equity rally has been the weakness in the euro. that's a big boom for the exporters in germany but the euro strengenning against the u.s. dollar. it hit a ten week high at 113. a lot of investors are questioning if it can continue if the euro continues to strengthen. that's the case in europe. cac 40 down almost 2% now and the ftse 100 quick check there at 6,833,000 down 1.4%. >> we have the 10 year treasury note at 2.28%. the ten year bund yield at 74 basis points. that's a big move as well. just a couple of weeks ago we saw the ten year bund yield at 8 or 9 basis points. that was result of qe but we've seen the huge reversal over the

space of a couple of weeks. the ten year spanish yield is just below the 2% level. they have hit 2% this morning just below that. these are the highest yields that we're seeing for germany since the end of last year and what's really interesting about it is people are saying it's happening for the wrong reasons. it's not because of equity markets moving higher economic growth moving to the upside no it's because of weakness there and it's a very very unsettled market and that begs the question whether that will continue or this is really just a little bit of a correction. some profit taking and we'll revert back to the buying mentality. >> there's a lot of factors at play here but i do love how it's such a great example of how global assets are interconnected between even the rebound in the price of oil up about 20% that has raised inflation

expectations and that's another reason we're seeing the spike right now but as you just point out, do you really want to fight the ecb which is what you're doing if you're going to short the bond market and see yields spike. ecb at the end of the day, implementing their quantitative easing program. that typically leads to yields moving lower. >> that's a good point. at the end of the day, is anyone going to succeed fighting the ecb? maybe over the shorter term now that some of these positions have been really excessive as a result of the qe buying they have been plushed out. i don't think that bund yield is going to stay at these levels. >> is that the new normal? >> no, i think it will come down to something more realistic. 40, 50 basis points. not the record lows we've seen but somewhere in between. >> meantime alibaba is set to report fourth quarter earnings before the bell. the e-commerce giant is expected to post a slow down of revenue.

this could be down to the chinese lunar new year holiday in february. shares hit an all time low this week. they lost some 23% this year. you've got some news. >> listen sources close to the situation tell me that alibaba is mulling a stake in micromax. negotiations between the two are underway and listen when you talk about alibaba's expansion into foreign markets many analysts say it has to find a strategic partnership with one of the local players. this could be it. alibaba is trying get it's foot in the door. >> head to cnbc.com. joining us now to discuss alibaba, it's growth prospects and what to expect in terms of earnings getting up early with us in texas i believe. is that right? >> i'm here in new york today. >> oh you're in new york. all right. well then it's not that early.

let's talk about alibaba. it was of course -- there was a lot of fanfare around the ipo when it went public in november of 2014 but the stock cooled off cig any captainly over the past couple of months. what are you expecting in terms of earnings today? >> they're expecting lower earnings quarter over quarter but generally speaking it has a lot to do with gap accounting for that. >> you're a player in the technology space in e-commerce. some say for alibaba to expand it has to create a stronger brand. especially in western markets like the u.s. do you think alibaba can effectively enter the u.s. at some point? >> i think alibaba will enter the u.s. but strengths are in the international markets and expanding into areas like mobile and health care. >> but at the same point that takes a lot of money and

investments. currently it's getting no more than 5% of total revenues outside of china. it wants to raise the percentage to 50%. to get to that level that's going to take a lot of money. are investors going to be patient enough to wait out until that investment pays off? >> some will and some wonlt. alibaba has a monster opportunity ahead of it. the stock might have gotten ahead of itself. we're seeing insider selling, lockups expiring and that's putting pressure on the stock. it's going to continue to move into the every day lives of people. >> what do you mean? health care? furniture, car accessories? >> i think mobile health care is a huge opportunity. you see the aging population in china and the folks with chronic

care diseases like diabetes and heart diseases and mobile health care with a huge opportunity to expand. they enable them to ship their assets. >> thank you for your time this morning. co-founder of razor fish. >> coming up later today, alibaba vice chairman will be on squawk on the street to discuss the company's earnings today at 9:00 a.m. eastern. let's take a look at today's other top stories: they're among the potential bidders for the buyout lending arm. first round offers are expected today. the ge private equity lending business is one of the top pieces of the nearly $200 million both of assets the company put up for sale last month. >> golden gate capital is in advanced talk to buy retailer

ann inc. reuters reports a deal could come together as soon as last week. last year golden gate took a 9% stake in the company and rose about 9% in after hours trade. as you can see on the board up about 9.4% in frankfurt. >> investors were drinking up the results from k-cup maker green mountain. we break down the company's earnings next. don't go away. the network that monitors her health. the secure cloud services that store her genetic data the servers and software on a mission to find the perfect match. and the mom who gets to hear her daughter's heart beat once again. we're helping organizations transform the way they work so they can transform the lives of the people they serve.

what do coffee organic food and farmville have in common? the company is behind those. let's get to landon at headquaters. >> let's start with whole foods that reported first quarter profits rose 11%. revenue was up but missed forecasts. same store sales also shy of estimates but well below the 10% or more. whole foods ceo says there's just more competition as more supermarkets are adding organic and natural foods. whole foods which has earned the nickname whole paycheck plans to open smaller stores. this could be a shot at trader

joes. and green mountain is cutting it's outlook. sells of the k-cup machines have slowed in the past two quarters due to high prices poor reviews and confusion over whether they could still use certain brands. keurig with lower than expected results. and synga reporting i was net loss. the video game marker reporting strong bookings as they attracted more users. they were up 84%. also announcing it's cutting 364 jobs or nearly a fifth of its work force and closing it's studio in orlando. they're the first strategic move since the founder returned last month. in february they cut 71 jobs by closing the beijing office. checking shares today zynga is up more than 1% while whole foods is down. seema back to you. >> landon thank you.

have a great day. two people have won the charity auction for lunch with apple ceo tim cook for $200,000. the price also includes passes to attend a keynote event at apple headquaters. the names of the winners are not being disclosed. >> he needs to get to the number warren buffet is getting. $3 million. >> he still has some time. but that's the bar. very high. >> it is. >> deflation causing trouble for central banks and now football teams. for almost four months investigators have been looking into allegations that some tennis balls were deflated in a new england patriots game. it implicates patriot's quarterback tom brady suggesting he was aware the team was deflating the ball. the nfl is now considering possible punishments for those implicated in the investigation. deflate gate. >> now from one iconic figure to

another. pope francis pulled off some basketball tricks in st. peters square on wednesday under the guidance of the harlem globe trotters. the basketball troop met with the pope during his weekly audience and presented him with a frame jersey. pope francis is printed on the back. he tried. >> just a split second. >> quite talented. >> quite talented. longer than many of us can do it. i can do it less than a split second. these are the headlines for you this morning. global markets sell off with u.s. futures indicating a negative open. tesla co elon musk says demand for its energy products could overtake car sales in the future and black stone among the potential bidders for ge's $16 billion buyout lending arm. we'll be back in two. ts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard

of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.

the cac 40 losing almost 2%. a couple of factors at play here. we have a strengthening euro dollar exchange rate moving toward the 114 handle. this is a ten week high and that's weighing on sentiment. also higher yields across the board. it's choking off the rally we have seen in equity markets. we had mixed earnings out this morning. seeing pretty good earnings but the cfo and co are leaving so these stock specific moves are weighing on the index. the ftse 100 volatility index has risen 8.6%.

the index for the stocks have up about 4.5%. somehow that reflected in u.s. futures. >> some may be weighing on u.s. futures because you can see the sell off has accelerated. this is premarket trade but the dow isn't indicating a lower open by 122 points. the nasdaq back below 5,000. it's down 34 points in premarket trade. telecom and utilities. that has to do with the rise in yields. the dow now negative for the yield and the turn around in oil prices. traders are trying to understand what that means. we moved so far, so fast. we're up about 50% since the month of january but let's switch focus to autos. tesla with a wider first quarter net loss on heavy spending relating to growing the company and launching the model x. the dollar is squeezing margins

on the model s. on the conference call he says demand for tesla's new line of stationary batteries is off the hook. he says it could be one day bigger business than selling cars. tesla rose 2% in after hours trade. let's look at what tesla is doing right now. down 1.6% in frankfurt. george what do you think, ten years from now will we look at tesla is more of a utility battery company than an auto player. >> from a personal perspective i hope it's still an auto player because i'm an auto's analyst rather than a utility analyst but he did make it clear that at this point in time the priority very much cars and although some of the capacity will be dedicated toward the utility products he was saying it would be about 30%. >> so help us understand how big of an opportunity is this battery production tesla power.

>> in terms of what we know when we think about tesla's capacity an where they're going to price the product we estimate it could be up to a $5.8 billion revenue business for them which would fall down to around $5 a share. >> but this has to require a significant amount of investment to really get this battery production going. how much will that weigh on future profitability? >> in terms of the investment they're in a position now to start to sell the packs start of next year. so from a research and development perspective they must be there or there abouts. the present win assuming any incremental capacity. >> are you not worried about the cash burn? 1.5 billion is the cushion right now. it's down from 2.4 billion same

time last year. >> we're not. i think a company like tesla should be investing. at this stage of the cycle we would expect a high growth young company to be continuing to invest. your free cash flow is a function of your operations but also your cap x. they should stay on the gas as long as they're confident that can yield professional concerns. >> thank you for your time. let's switch over to phil joining us on the phone from atlanta. what are you doing in atlanta? >> well this is where porsche will be opening it's north american headquaters here in atlanta. if it was just a ribbon cutting i don't think we'd be here. this headquaters will include a racetrack. and a performance racetrack. one where porsche owners will be able to come and do a small test, if you will of their

driving skills. there's also going to be a museum here which will have some of the classic porches over the years and this is a statement by porsche that north america is even more important as we see this market when it comes to ultra luxury cars really take off. sales up 17% for porsche and it out paces most of their rivals when it comes to the luxury market. we'll talk to the head later this morning on squawk box. i've seen this headquaters. this is a place to behold and fans will be interested at taking a look at it. >> thank you so much for that. >> looking forward to it. tune in to squawk box u.s. for two high profile interviews later today. steve will be speaking to former secretary treasurer tim

geithner. plus he'll be hoping to get insight into the timing of the first fed rate hike with chicago fed president. charles evans. that's coming up at 8:30 a.m. eastern. investors are trying to reprice their expectation on when the feds will raise rates. a lot of that will have to do with the jobs report we get tomorrow and after that disappointing moment in march the question is will that begin until april. >> there is a possibility that we could be seeing the first rate hike until september. that could still be in play. the sell off we have seen starting a couple of days agatha is now deepening as voters are going to the poll. down 1.6%. the dax shedding more than 1%. the cac 40 off almost 1.75% you have the sell in the bond market and the higher euro dollar exchange rate and this is the picture of the bond markets.

2.27%. the ten year bund yield is the key focus for investors at 72 basis points. the euro dollar at a ten week high and this is pressuring the european markets. 11375. getting closer to the 114 level t. dollar still on the back after yesterday's disappointing adp data. >> now that we're looking at the dollar weaken finally against a basket of currencies some analysts say perhaps it's time to buy the multinationals which don't do well when the dollar strengthenings. let's look at u.s. futures. triple digit move on the down side. nasdaq down 29 points. utilities and telecom watch those sectors. the two worst performing sectors in yesterday's trade. oil continues to move higher. up to about 50% since january. so a big move in oil. >> that's it for today's show. >> thank you for joining us. next up is squawk box.

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market alert. u.s. equities futures under pressure after a couple of tough weeks already and the yield on the tenure at the highest level in december in the face of slower growth here. plus the need for speed. tesla results beat the street and the shares are get a pop on the news and deflatagate, oh deflate gate. nfl star tom brady's reputation at risk today after the nfl concludes the new england patriots broke the rules during a key game and that the quarterback was likely aware of

the inappropriate activities. it's thursday may 7th 2015 and squawk box begins right now. ♪ good morning and welcome to squawk box here on cnbc. i'm sitting in for becky quick, joe kernen and andrew ross sorkin, they are here. let's get you up to speed on the markets. we're going to have a negative open at this point. dow would open lower by 95 points. s&p 500 lower by nearly 11 and nasdaq lower by 24 points as we continue to wonder about what is happening in the bond market. this huge move and rise of government yields around the world where everybody assumed they were staying low for so long and it's just upset all