hello and a very warm welcome. this is worldwide exchange. i'm wilfred frost. >> i'm seema mody. >> the german ten year yield hits 1% for the first time since september last year. the euro rallies on the back of the move. >> major banks wallow in the red as s&p cuts it's rating on the banks but standard charter beats. >> the largest retailer and owner of zara benefits from a

weaker euro and recovery in europe. >> a round of downgrades for china. they lower gdp and inflation expectations. stock rallies as investors bet on further easing. >> it's germ man 10 year yield cross for the first time. unwinding of various european qe related trades. this week that has been in part to play but also a little bit of sentiment imported from the united states where yesterday some jobs data the jobs opening and labor turnover survey better than expected so this move certainly at least linked with the u.s. leading the charge rather than just the german bund

yield itself moving based on european policy. >> it's not that high wilfred. especially looking at 2.4% in the u.s. ten year in the u.s. but it's psych lonlicologically significant. the question is what happens from here and how do stocks and current sys react interestingly enough. the u.s. ten year at 2.4%. large dividend paying stocks have been moving to the down side. down about 10% from their record highs. >> absolutely. in terms of what you're saying it's not that high. 1% for the german ten year in the grand scheme of things is not that high. that's exactly what mario draghi was saying last week. compared to where we were a year ago, five years ago, this is very low levels. that allowed some correction.

of course it is high on a short-term time frame compared to that 0.1% that we did hit on the yield, you know back in the middle of marchand of course the move since then very pronounced. >> touching a record low of 0.05% in april and now we're at 1% of german bundment it's the violent move to the upside in the bond market that's catching the attention of investors and what that volatility means for other asset classes. something we'll be discussing here on worldwide exchange. more pain for some of europe's largest banks. s&p downgraded the rating on four major lenders including deutsche bank and commerce bank. they're not so sure the government will rescue the banks in the case of extraordinary circumstances anymore. annetta is live with more. >> thank you so much.

he is saying the reason for the downgrade is as you said that they are most likely not going to get more bailout money from the government in case there were to be a crisis. which now we have a system in place here meaning that the first stop of the bond olders, of course equity holders so you have a functioning resolution mechanism and out by a government. look at what happened to his banks. they downgraded deutsche bank by two notches. it looks better than just after the market open he had a pitch coming out earlier this year

with the same reasoning downgrading the bank. also it is consequently warning of the low profitability german banks are facing. also the public lenders had super low profitability. the german central bank is saying really that there needs to be more consolidation in order to prop up profitability in the german banking market. with that back to you. >> shares are also trading off the back of that. bill winters also had that s&p delivered the decision. share prices reacting positively. the troubled bank undergoes a $400 million turn around. let's talk about banks in

general now. global head of financial he search at pimco. they don't feel that the policy will be there to support them as much overall. that's on one side. on the other side we have a bit of growth coming through and interest rates at a very low level. is the banking sector attractive? >> first of all on the s&p decision there's a lot of adjustment in the rating agencies so a lot is dealing with the ratings. the ratings were too high and now they're changing the methodologies to reflect the with draw of government support. they're doing what they should have done arguably four or five years ago so i don't think that this is a reflection of banks getting weaker. if anything if you look at the

metrics of u.s. banks they are strong if you look at capital ratios are much higher because of much tougher regulation. what is correct is if things go bad a lot of mechanisms are being put in place to protect taxpayers from future losses and pushes those losses on bond holders which is fair to me. >> when looking at greece which is expected to dominate market flows this morning. bank of america says banks would be the sector to benefit the most from the greek uncertainty ending. do you agree with that? if so why? >> i think that's probably right. that's certainly been the case in the past that banks have been the most geared toward systemic type of ooechtevents in the euro zone. and italian government bonds during the last two or three or four years. it's been less true in the last

four months in the sense that bank stocks have been resilient in the face of increasing uncertainty in the greek situation. i'm not sure the risks are se semetric. they will benefit a little bit but not in a major, major way. >> there's been quite a few interesting news over the last couple of days. kick off with deutsche bank a change at the top. does that make a difference? can that make a difference for them to get roes back to levels they'll be proud of? >> it does no magical solution for deutsche bank. it's a tough place. the bank is stuck with investment banking because that's the only business they're good at and where they have scale and that's the most under attack from regulation and from new leverage ratios.

so you know there's no magical trick to resolve that situation. however i think it's impressive to see deutsche and you mentioned standard chartered and credit suisse as well where there's a new generation of bankers taking over ceos and they understand regulation that the world has changed. that's a good thing. so i think it's a very good deal. but again there's not going to be a magical -- it's going to be much tougher than the restructuring of ubs where he was involved in the past. >> we'll leave it there. m.d. and global head of financial research with a look at the bank. thank you for your time. now franklin graham is $100 million away from from wells

fargo after add features lesbian couple. he says his organization is moving to bb&t. they don't take formal positions on social issues. he's also staying clear of tiffany following an advert showing two men getting engaged. >> belgium chemicals group higher after confirming it's 2016 profit target and announcing it will have bigger than expected cost savings next year. it's up 3.6%. now weir group flirting with the bottom of the stoxx 600 after it expects full year results to be more heavily weighted toward the second half. sain sainsbury up 2.3% after being

described as the silver lining in the sector catherine will be joining us later to talk about sainsbury. in retail news sales sharply lower on the back of a profit warning. the group is no longer on track to reach it's 2015 earnings and revenue targets due to shrinking markets. off incredibly sharply. it's down 27.6% the german fashion there. inditex, the spanish retailer that owns zara. it's up 1.1% earnings beat expectations expectations. of course that's off the back of a weaker euro and also added it plans to expand into a number of new markets. seema, back to you. >> here's what's coming up on worldwide exchange.

it's a tough life in the public eye. we ask is it better for tech giants to stay private? they say diamonds are forever but find out why millennials could be damaging the future of the $80 million gem industry. >> jeb bush hits the road before announcing his bid for the presidency. we take a look at the candidates hoping to win the white house. we're back in two minutes.

>> italian finance minister told cnbc he thinks a deal for creditors will come soon. how does he peel about the prospects for his own economy? michelle caught up with him in new york. she asked for his view that the greek finance minister is using italy as leverage after his comments that italy could grow tired of austerity. >> i have a good relationship with him. this is not the first time he said something i totally disagree with. italy is completely turned around. it's now growing. it's a country implementing more than any other structural

reforms. it's becoming an example for europe and i'm not saying the imf, the commission are saying that italy is an example and it's becoming stronger by the quarter so i'm afraid that this time my good friend got it completely wrong. >> now does the investment community share the confidence of the italian finance minister? there's strong interest in buying assets. the deputy head of corporate and investing banking joins us live from milan now. thank you for joining us. good morning to you. let's touch on that issue. is the greece situation effecting investors desire to invest in italy? >> from what we have seen yesterday during the conference and today in the investment conference we have been

gathering around 250 investors penning that they're not only strong but still alive and grow growing. >> italy's economy is finally resurging. unemployment situation is also improving in italy. do you think though this is simply the quantitative easing at play or signs of structural reform also here. >> it's a combination of all the factors. clearly investors are looking at the political stability. they're looking at the reforms. they're looking at the gdp slightly going up in italy.

the employment getting better and there is a hot of confidence and a lot of money coming back in the market this is being supported as well since 2012 from the ecb and the value stats within the quantitative easing so all of those factors put together not only fuel the confidence but brought a flow of liquidity and money back and a lot of capital back in the country. >> of course as you said the ecb has been adding huge support to the economy since 2012 and mario draghi last week making it clear that his qe program will continue well into 2016. that said we have seen bond yields rise pretty sharply over the last couple of months. how much of a concern is that for italian corporates? >> when putting things in perspective when we look at the absolute level of yields we're talking about a slight

adjustment from a situation that went to the extreme. so what is more important is accessing the liquidity and access to capital just last year 21 billion had been issued in the market. so there is access to capital. there is access to liquidity. there is access to long-term liquidity. the adjustment that's happening now in the european market is just a readjustment from an extreme situation. nothing to worry about in my opinion so far. >> if we just talk about the political situation quickly in italy. the last set of local elections didn't quite go to plan. is he under quite a will the of pressure domestically?

>> i don't describe that view. the situation is stable on that landscape. the situation has been on goingly improving since three years now and when i look at the amount of interest and the amount of capital in the market we have people extremely bullish on the economy and bullish on the country and are ready to put a lot of capital at risk in the country so i think that things are stabilizing. we are back in a normal situation. it will take time to improve much further but the trend is here to stay. >> thank you for joining us. deputy head of corporate and investment banking. let's have a look in on what markets are doing here in europe. they opened softly. they were down in the red continuing the sentiment that we've had both last week and this week but they have rallied during trade. we're up about 12 basis points on the stoxx 600.

let's look in on the european markets as you can see. italy leading the charge up .3%. france and germany just into the green and of course germany just recovering back above the 11,000 mark. the ftse 100 is up 0.2%. let's look at bond rates. big story earlier today was the ten year german yield crossing above 1% for the first time since september 2013. you can see 1.03%. over the last week it's been european yields leading global yields but yesterday we saw good jobs data coming out of the u.s. that brought the u.s. ten year yield close to 2.5% and that move itself partly sparking the move in rates today. because the german yield has risen and closed that gap today. the euro again at 1.135. it's up another 0.6%. the broader u.s. dollar index has been weak over the last

couple of days and the move against the yen pronounced today off the back of comments from the bank of japan. quick look at commodities. we've seen a nice little rally in oil prices taking the wti price back above 60. 61.3 and brent is look pretty at 65.9. >> greek prime minister is set to meet with germany and france but he could be rebuffed due to stalemate overreforms. let's get to nancy who is live in brussels with more on this story. >> thank you, seema. that's right. never a lack of mixed messages on greece but what we do know is that an eu source told us that he is due to meet with not only the german chancellor and french president but he'll also be meeting with the eu commissioner

later today it's his first trip to brussels since omitting the counter dollar for the debt deal. some officials have said it doesn't go far enough however he was striking a different more confident tone speaking to the italian newspaper. he said look we're willing to give some move on the surplus targets but then again the other side says he hasn't really put forward any measures that show how they will meet those surplus targets and another sticking point is that greece is really saying they can give any ground on the pension cuts. they say it would be inconceivable to think about cutting out pensions for the lowest income sector in the population. still we really do think both sides haven't come to a deal yet. we'll have to see what happens to the talks later in the day. this is all happening on the side lines of a major summit between the european leaders and latin america leaders. they're expecting 33 head of

state or latin american officials to be meeting here today. a lot of concern that the greece threat is overshadowing another major summit. >> what's on the agenda of the latin american summit. what are are they hoping to achieve? >> we have been talking to the eu sources and they want to look at a restart of the trade relationships with latin america. it's been seen as more of an aid relationship and they want to be partners in economic development. some of the key figures will be the presidents from mexico chile. now the president of brazil just announced a really sweeping infrastructure program estimated to be worth around $65 billion. so we could see talk around that. how european players get involved and again they're trying to play catch up with china which as we saw earlier last month chinese premiere was in latin america announcing an investment of 250 billion over the last ten years so some concern that europe is losing

out. so plenty here to talk about and we'll be updating you throughout the day. >> thank you very much. now the u.k.'s chancellor george osborne and mark carney will make their annual speech in london later today. the speech is often used to introduce initiatives. last year the bank of england announced its mortgage cap to address the hot property market as well as the fair markets review. results are expected to be published today. catherine joins us to talk about what to expect this evening. >> it looks as though we could be looking at a surplus of surpluses because we're expecting george osborne to and not only of course reaffirm his commitment to running a surplus in the next couple of years here in the u.k. but to almost make it the new normal to have that legally enshrined and we've already had economists coming out and saying this might not be a very good idea for the u.k. sometimes you do need to borrow to fund growth and also there

has to be some wiggle room for special circumstances and also it can be quite difficult to predict just where growth is going a couple of years down the line as we know here in the uk. it's a good political move. those in the opposition labor party running for leadership. we have candidates that have conceded that the labor party's economic reputation was tarnished the last time when he was pursuing a policy of running a deficit and porborrowing to fund growth in good economic times. that will be throwing down the gauntlet to those labor party candidates that are going to have to say whether they would commit to the surplus plan or not and go against their party's traditional policies. >> that will be interesting and i can imagine we'll get a lot of scorn on the political front

from trying to enshrine this into law. what are we expecting on the banks? it comes at a very timely moment following the announcements yesterday. >> it looks as though they have given the u.k. government a couple of months to try to woo it back a. it would be something that would help that. we've seen up to 8,000 job cuts at the bank here in the u.k. but there is almost a sense i think with this that this decision may have already been made. so we'll just have to see what the government is going to give. >> all eyes on george osborne. thank you so much. coming up hit the silk road. our next guest says it's time to play china's infrastructure poll policy. we tell you how after this break. 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.

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>> the euro rallies to a three week high on the back of the move. >> s&p cuts their ratings but standard chartered avoids the ax jumping to the top of the ftse the day bill winters takes the helm as ceo. >> inditex benefits from a weaker euro and recovery in europe. >> a round of downgrades for china. the country's central bank lowers gdp and inflation

expectation but stocks rally as investors bet on further pboc action. let's take a look at the european markets on this wednesday morning. stocks visit a one month low in yesterday's trade. i think too a lot of this has to do with the volatility that we're seeing in the bond market. elevated yields at 1%. not that high in comparison to what we're seeing on the other side of the atlantaic but it's psychologically significant. they're brushing off the volatility we're seeing. the dax back above 11,000. just up by around 8 points. the cac 40 up by 5 and italian markets with a 180 point gain. a good gauge of stocks.

the index following suit up just about 2 to 3 points in today's trade. >> bond markets shaken and stirred today. we have seen the german ten year cross above 1% for the first time since 2014. once again a little bit of a lead has come from the other side of the pond. 2.46% rising yesterday after a descent jobs data print and of course sharp move across the spectrum in bond yields over the last few weeks and months. let's have a look at it. a three week low. the euro has been the main beneficiary. it's now at 1133 but in today's move the biggest move to the down side for the dollar is against the yen. 122.89 as you can see. let's move on and mention china.

chinese markets close the day in the green after the pboc lowered forecasts for the world's second largest economy. this once again fuelling expectations that the central bank will step in with further easing. markets moving in the opposite direction to fundamental deep data. they cited increased downward pressure on growth for the move. >> meanwhile the msci said it would hold off on adding chinese equities to its em index until a number of outstanding issues are resolved. not to be left out investors in china are still getting a bite out of the stock market. eunice yoon spoke to china's apple pickers turned stock pickers. >> they say money doesn't grow on trees but apple farmer does learn that it does grow in the stock market. from his remote village in western china he invested more than $8,000 into the shanghai

index six months ago. a sizable portion of his life savings. >> it's a lot easier to make money from stocks than farm work but it's risky. you can earn $1,600 in 10 minutes and lose it all in the next. >> hundreds here are buying into the market for the first time. so much so that they have set up a ministock exchange center so they can monitor their investments minute by minute. >> they started plowing their savings into stocks after one heard about the market craze on a visit to a nearby town. he returned and spread the word to farmers here. >> my advice is to follow the country's economic development and government policies she advises and read the news every day she told me she started with $820 in 2010 and grew her portfolio 40 times over to more than $33,000 to date. she's known by the locals as the

stock market goddess. with the chinese government supportive of stock investing he has a bullish long-term view though he is still getting used to the highs and lows. he says the farmers now only tend to their fields outside of market hours. >> i've made some small profit and gained experience he says but i feel anxious when my investments aren't doing well. anxious that something could one day upset the am cart. >> is it too late to get investment or exposure to chinese markets? let's talk with the managing director and global head of growth strategy and solutions. pressure pleasure to have you here on worldwide exchange. when assessing what's happening on the index, it's up 100% so far in 2015. what would you tell investors

that haven't had exposure to china? is it too late to get in? >> china remains an attractive market in terms of the supply and demand and dynamic of retail investors essentially moving from property to the equity markets so one of the things that we like is more the a shares rather than the on shore domestic market that has rallied significantly so the a versus h spread is still pretty high to the advantage of the share which essentially trading at a discount. >> as you mention, the factors driving the a share, the shanghai market is not the same as the h share market in hong kong and foreign investors that like to weigh up valuations and earnings potential will be looking at t the h share market and there's no reason that should close the gap with this huge flow of money coming from the mainland. >> but at some point valuations do matter and what has happen sd the valuation of the a share

market has gone to pretty extreme level because of supply and demand. it's almost a physics analogy. ultimately the path of least resistance is to the outside. they do trade at a discount. so if you look at value they'll be switching and at some point valuation do matter and the shares will catch up even though the supply and demand dynamics are to the advantage. >> it's no secret that retail participation has played a big role in the rally we've been seeing in the chinese stock market. in fact retail investors increased their equity investments almost by 85% this year to a record of $400 billion but regulators have been saying they'll clamp down on margin lending. what does that mean for chinese markets going forward? >> yeah i think you mention a

very good point which is the regulation distorting asset prices. you'll have big snap back up. it will also make the market more efficient. so you'll take out people that use too much leverage and even actual through chinese government will be successful to the slowing economy and pressure on the property market to having the retail move to an asset price that's going higher so instead of having a debt deflation scenario what they're essentially engineering is an asset bubble that would ultimately ease pressure on the consumer and retail balance sheet. >> if people don't have investment in china yet, what's still worth investing in?

>> the banks are the sector that looks worth it. there's a net performing loan default that is pretty expensive because we all know about the shadow banking et cetera and we think deval you wagsuation out to extreme. our bet is on the banks. >> transparency not a concern. >> yeah but the question is what is the price you're paying for it. the point is transparency issues are more than discounted in the valuation at this stage. >> valuation alone makes it interesting. we'll leave it there but he sticks with us. managing director and global head of employee strategy. >> now a blockbuster debut for chinese state nuclear reactor. shares rocketed by 44% on the debut day of trade on shanghai stock exchange. the firm's ipo was the country's largest since 2011. head to cnbc.com for more

details on that story. >> alibaba founder is on a charm offensive in the u.s. this week. he spoke at the economic club of new york tuesday predicting the chinese e-commerce giant will pass walmart in sales this year but they're not seeking to invade america by taking on amazon and ebay. >> my purpose coming here that we need more american products to china. we have hungry 100 million people coming to buy every day. so this is why we come here. we do not come here to compete. we come here to bring the small business. >> jack ma also spoke about alibaba's blockbuster ipo last year. he told the audience if i had another life i would keep my company private. it's not only our people that watches us as well you have to get used to it. shares in alibaba are down around 6%. keep in mind exclusive interview

coming up at 2:00 p.m. eastern. >> on this topic we want to hear from you, do you think that staying private is better than going public? join the conversation on worldwide exchange. or via twitter @cnbcwex. this is an interesting debate. >> it really is. >> particularly where the valuations of the private sector are much higher than the pub hick sector. >> and i was speaking to the ceo of razor. one of the unicorns and i asked him the same question, why go public when you're getting this valuation in the private market and he said it's a goal that we want to go public. we would be doing it because it's the natural evolution of a company. >> i think as well of course for jack ma part of listening was getting foreign exposure and foreign money and such a huge company exhausted the private funding market but sit interesting going forward for the big ceos.

they're going to have to spend 2 or 3 weeks doing road shows. and for someone that's such an innovator that's at odds with what their dna is. >> i wonder if there's a way to measure the stress levels of ceos pre-ipo and post-ipo because the quarterly earnings calls and the stress of watching your stock price appreciate and depreciate and the volatility involved you wonder if that alone is a reason to keep it private. >> but it's an evolution of the company. they're very different types of operators than a ceo that we see in a big listed pharmaceutical that's been there for years and years that are managers. they're not the innovators that built the company to start with. jack ma i can understand his frustration but it's only going to get worse for him as we go forward as this company attracts more foreign investors and grows further and people get more and

more frustrated with tiny quarterly update which is is not what he wants to focus on but he has to now. >> at the same time you have to brush off the noise and keep your eye on the prize. the long-term goal which we know at the end of the day is for alibaba to expand into western markets and compete with amazon and ebay. >> anyway get in touch with us. should people stay private, go public? join the debate. >> coming up on worldwide exchange we'll talk india. the prime minister has big plans to add millions of jobs in the country. but can they become a reality? we discuss after this short break.

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he also expects foreign demand to contribute in the coming period. these coming on the back of a volatile session for turkish assets as well as the lira which hit a record low on monday. the deputy prime minister of turkey saying that despite the fluctuates we is been seeing in financial markets growth will

come in above expectations. >> now the dollar has hit a two week low against the yen following comments from the bank of japan governor. she has the story live from tokyo for us. >> thank you, wilfred. hours ago the bank of japan governor stated that the yen might not necessarily weaken further against the dollar on a real effective exchange rate basis and with this comment the yen strengthened dramatically against the dollar at one point reaching 122.7. it even reached 125 last friday. today's comments were addressing speculation that monetary policies by the u.s. and japan would further weaken against the dollar but he denied this and pointed o out there are many other factors at play regarding dollar yen rates and since u.s. rate hikes have been fully priced in there's no reason for the dollar to rise further

versus the yen. also with the positive economic indicators we have been seeing the market postponed it's estimate of when the next round of quantitative easing could come about but he emphasized should there be any difficulties the bank will not hesitate to change it's policies. that's all from the nikkei. back to you. >> thank you very much. >> switching focus to india, the indian prime minister is set to push ahead with the biggest labor reforms the country has ever seen for decades. reuters said modi is hoping to create millions of manufacturing jobs by making it easier for firms to hire and fireworkers. however any bill is likely to face strong opposition in parliament. that of course leads to some of the bills he pushes forward to take some time to actually get

implemented but the big question is he has been presenting a lot of bills like this. when do we see the fruits of his hay boar? when to we see the bills come to market? >> even in the lower house he lost some support since he's taken office. does this labor bill go against some of his other policies? doesn't it go against his bill? >> no it's putting more pressure on the private sector to create the jobs we need on the infrastructure front. >> interesting that from stepping back he had one year. the market has gone up a lot. >> and then down. >> he's done a huge huge amount of good but he's lost some support over the last year. so he's weaker than he was when he came to power. >> overpromising and underdelivering. not what you wanted to do when you're the head of the country. but that's what he needed. now the question is will he deliver?

>> indeed. let's move on and talk about south korea. the south korean president postponed a u.s. visit on wednesday. the president's office says the next week will be watershed for south korea's response to the disease. nine peel have died in the outbreak however the health ministry says all of the victims were suffering from serious ailments before they tested positive for mers. i want to bring you the latest flashes on the greece story. the ecb's hansen firm says everybody hopes one can reach an agreement on greece saying also that no meeting scheduled between france and germany and greece and that's the latest flashes we've had on that story. so this is really on going.

no major development there is so far. >> let's move on. billionaire investor that runs double line capital says the chances the fed hikes interest rates by the end of the year are less than 50%. in a client web cast he says that's partly because of a lack of wage inflation. last year gundlach said treasury yields would fall because inflationary pressures were non nonexistant. they raised questions from investors over the actual safety of the traditional safe haven assets. still with us is the managing director and global head of flow strategy and solutions. this is a really interesting debate people have been having so far. is it simply that these very safe assets whether it's bonds or the safer end of the equity market with high yields is it that they have fallen too far or

is there fundamental reasons they'll suffer? >> you raise an interesting point. definitely rallied significantly with the ecb having a distortive effect on the market. despite monetarily quiddityy liquidity the central bank the ecb is buying twice the amount every year. so when you look at government bonds the daily liquidity is pretty poor and you add to that the fact that the banks are committing less trading capital et cetera. so once you have been in a 30 year bull market and all of a sudden everyone wants to rush out of the same door it's unsurprising to see that gap in lid quiddity because things are not -- gap in liquidity and pick up in volatility. >> so with 35% of european bonds in negative territory, where

does one find safety? >> this is the conundrum and one of the work we have done to say that safe is the new risky. so in a conundrum way equities are the ones that provide better value. you have two arguments. number one there's definitely a hunt for yields. so equity yields are the ones defining gravity. so you'll get better yield on the fixed income and the second point the biggest u.s. companies are companies themselves. so in one way we have the central bank buying bonds but we also need to take into account the fact that companies are also doing a massive amount of buying of equities. >> how can you say the equities are safe? they have been totally supported by this monetary policy for the last 7 or 8 years. yes the european bank is still pursuing it's part of it but

relative to the global amount we've had that is quite small and that's going to change very soon and surely equities would suffer as a result. >> you need to remember the sort of action versus reaction dynamic because central bank are intervening to stabilize the inflationary environment. so the buy back and support you get will ultimately ease if and only if we get more growth and if you get growth what do you think the path of least resistance would be? you have growth which is something you see in europe and then ultimately the next vehicle. so equity tends to have more draw down but in this particular environment, we think equities is where you have the better value and from an investment perspective it's relatively safer compared to three year

bund. >> corporations have been taking advantage of the low rate environment. we have been seeing more m&a activity and now the next big deal could come in the auto sector but our colleague andrew ross sorkin wrote an interesting article. he said m m&a doesn't signal confidence in the economy. do you think it's desperation? a need for growth? >> it's more the latter than the former because i think companies so far have been trying to generate earnings per share growth through buy back and dividend et cetera but you reach a certain point where to get more tough on growth you need to go through the m&a route. one thing very important to remember is that capex alone is not a sufficient factor for growth. it has to be profitable. so what we see through m&a is companies have the ability to do cost and revenues. >> goldman sachs says companies

should not be buying back stock in this rising rate environment. they also say that valuation is a concern. do you agree with that? >> yes to a certain point. buy back is only rational if and only if you're earnings yield is above your cusp of debt. so i think companies are more rational than we give them credit and some companies who do buy back at valuations that are too high will be destroying earnings per share and value. >> we've just been looking at your european shopping list. we got just under a minute left. why would anyone want to buy morrisons? no one likes the u.k. food retail space do they? >> yes but it's a question of valuation and opportunities in terms of cost synergies because one of the things you see is m&a. that rationalizes the supply and helps the bargaining power of

corporates versus the market they're in. so ultimately one of the names we have are based from industrial rational but also economic rational. >> and indeed valuations. great stuff. thank you for joining us. thank you very much. >> thank you for having me. >> all right moving on they say diamonds are forever but find out why millennials could be damaging the future of the $80 billion gem industry. we have that story coming up after this short break.

. >> it's the second hour of worldwide exchange. welcome everyone. i'm seema mody. >> i'm wilfred frost. here are your headlines from around the world. >> the german ten year yield hits 1%. it's unlikely the fed will hike rates this year. >> a round of downgrades for china. the country's central bank blows gdp and inflation expectations but stocks rally as investors bet on further easing. >> jack ma regrets taking alibaba public. the founder also insisting his

firm is no threat to amazon and ebay. >> netflix streams ahead. the stock hits a record high as shareholders approve a massive increase in shares paving the way for a stock split. >> and welcome everyone to the show. the focus really today i would say would be the bond market. not the equity market. now the german ten year bund at 1%. bigger picture here not that big of a move but the question is what does this mean for stocks and currencies going forward already in the u.s. with the u.s. ten year treasury yielding 2.4%. we have been seeing dividend paying stocks losing strength over the past couple of weeks. in fact the utilities are down 10 to 12% from the respective highs. >> very interesting point in terms of the currency market because we have seen the u.s. ten year yield rise and getting closer to 2.5%. but because yields elsewhere particularly in europe have been

rising faster and closing the gap it's seeing other stocks rise we have the broader dollar index at a 3 week low. we have the euro spiking and closing in and the yen itself moving sharply today. even though the data has got better over the last week or so and the yield has gone up the dollar has been weak over the last week or so. >> do you think this type of activity, this type of move in the bond market will warrant dovish commentary to come from some ecb policy members? similar to may? >> the big move came off of the back of the ecb comments last week from mario draghi. he said i'm committed until september of next year but all of you have to realize how far things have already moved. the reaction we have seen in the german ten year yield is not because people think that qe is going to end early. they think that all the assets relating to qe trade has been bid too far. >> it's a little too early to unwind qe trades.

we're talking about monetary support to be in place until september of 2016. perhaps the longer end trade is to go long equities and short the euro and long bonds. we'll have to see if the yields continue to rise. we'll continue to discuss that here on worldwide exchange. a quick look at u.s. futures right now pointing to a higher open. the dow up 42 points in premarket trade. the nasdaq up 14 points. amazon shareholder meeting today could be market moving. s&p 500 up about five points in premarket trade. yesterday an unevenful day on wall street. but keep an eye on banks. if you want to know where we're seeing some type of leadership it's the banking index. up about 5 to 6% over the past four months. a lot of that having to do with better than expected earnings but also the prospect of rights to rise. that's good. that's positive for the banking sector. european bank versus been

europeans european banks have been fairing well after six consecutive days of losses in europe. will we be able to close the day in positive territory? we're holding on to gains but minor. dax only up about 10 points. just enough to bring it back above 11,000. a key psychological level that traders watch. the other one being 12,000 but it's far away at this point. cac 40 up by around 3 points. we're in our second hour of worldwide exchange. we vnhaven't mentioned greece as much as we typically do. that's another reason we're looking at stocks higher. not as much of a fear today least. >> i don't know. i think that's on going. no major developments on that. it's just we had a very weak start to this weekend. today they're pausing for breath in terms of declining. let's move on and have a quick look at bonds. we've seen yields rise over the last week or so it's been european yields driving u.s.

yields yields. perhaps the other way around. increasingly the u.s. ten year below 2.5% and still below that level and today european yields reacted a bit as well. the german ten year cross above 1%. look at the dollar index because despite the rise as i said at the top of u.s. yields we're now on the three week low for the broader dollar index. it's up another .5% today. let's look at the individual currency players because the main beneficiary has been the euro which is strong today up another 0.3%. 113 at the handle we're at at the moment but the biggest mover today, the biggest beneficiary of that u.s. dollar softness has been the yen. 1.3% move to the upside. that comes off the back of comments from the bank of japan governor earlier today saying that the currency may not remain that weak forever. seema. >> bond investor that runs double line capital says the

chances the fed hikes interest rates by the end of the year are less than 50%. in a client web cast he says that's partly because of a lack of wage inflation. last year he correctly forecasted treasury yields to fall because inflationary pressures were nonkpis tantexistentnonexistent. should we believe him? it is a pleasure to have you here around the desk. >> thank you. it's a pleasure to be here. >> what brings you to london? >> i was in scandinavia monday and tuesday. it's a good place to stop on the way home. >> particularly to see seema and myself. >> it's an enormous pleasure. >> let's talk about what jeff gundlach is saying. should we believe him this time around? is the rate rise not actually going to come until 2016 which is very different than what goldman sachs told us. they're saying we're going to see two fed rate hikes in 2015. >> there's a phrase that one attaches to publications saying something like past performance

is not indicative and our economists think they're going to move in december but that the risk is more september than 2016. the u.s. data have come back faster than anybody expected. beige book was aggressive in talking about labor market shortages. the atlanta fed is talking about wage increases. i think the fed wants to get off 0. how aggressive they're going to be is an interesting question. >> at the moment on current trends we're going to reach 0% unemployment before we reach 2% inflation. nearly 0% unemployment is inconceivable. thus which of those two current trends is going to break first and what does that mean for fed policy? >> the inflation trend is going to break first. ultimately you come to a wall and the indications are that we haven't crashed into the wall

but we're seeing the wall within driving distance in the economy. so i think that the fed would feel happier if they were closer to what they considered to be he equal. but not so aggressive as they are right now. >> charles plosser was telling us earlier in the week that the ecb has a much nicer job. do you think the fed wishes it had a smaller remitt? >> i don't think so. at the end of the day the ecb job is more complicated. they have to hold europe together and can't ignore what's happening in the economy and they have to at least pretend their sole focus is inflation. it makes the process harder. >> do you find more klines actively investing in equities that are interested in hearing your forecast on where the euro and where the dollar is headed? because it's really the currency market driving equity flows right now. >> that's true. it was great to be a currency

strategist until about a month ago. now it's great to be a bond market strategist. >> it's changing right? >> it certainly is. we were in the driver's seat for 8 or 9 months but not just the bond market but the german bond market is what's driving currencies at the moment. >> thank you very much for that. we'll have another chat with steven shortly. now the pboc lowered both gdp uninflation forecasts for the second largest economy. this further fuelling expectation haas the central bank will step in for more easing. they cited increased downward pressure on growth for the moves. >> meanwhile the msci said it would hold off on adding chinese equities to its index until a number of outstanding issues are revolved. they're expecting the addition of chinese shares to give the market a $400 billion boost. now switching focus to alibaba, founder and chairman jack ma is on a charm offensive in the u.s. this week.

he spoke tuesday predicting the chinese e-commerce giant will pass walmart in sales this year but he says alibaba is not seeking to invade america by taking on amazon and ebay. >> my purpose coming here that we need more american products to china. we have hungry 100 million people coming to buy every day. so this is why we come here. we do not come here to compete. we come here to bring the small business. >> jack ma spoke about the blockbuster ipo. he said if i had another life i would keep my company private. it's not only our people that watch us. the globe watches us. you have to get used to it. shares are down around 6% since the ipo. a very different situation than in november 206114. >> on this topic we want to hear from you. do you think staying private is

better than going public. we have been asking you throughout the show. jeff tweeted in and said not always. if companies stay private not much of market to invest in or to report on which would be bad for cnbc. a very good point for jeff. get in touch with us. you know our twitter handle and our personal handles on the screen too. it's a very interesting point. someone like alibaba, so so huge. the private market funding opportunities for them start to dry out because there aren't enough of those type of investors out there so i think of course they have to look to the public market at some point but it's a differ type of leader that wants to lead a public company to someone that wants to found and innovate a company and that's the sentiment he is touching on. >> he's still a new ceo and getting used to the public eye. perhaps he has been receiving some push back and concern around the stock price and growth prospects in china given the slow down in the economy. perhaps this is alibaba and jack ma getting used to being a

public company and the stress that comes along with it. >> it's a very interesting topic and one we'll hear more about later. >> we will. jack ma will be sitting down for an exclusive interview from chicago later today. you don't want to miss it. that's coming up at 2:00 p.m. eastern on power lunch. now another stock in focus is netflix. netflix investors have improved a massive increase in the number of shares the company can issue. the first move toward a possible stock split. at the companies a annual meeting tuesday the ceo says management will seek board approval for a split in due course. netflix won approval to raise it's share authorization nearly 30 fold to 5 billion. now netflix keep in mind is the topper former on the nasdaq 100 this year up nearly -- this is massive, it's up 90% just this year. >> massive moves and i love also if we look at that chart those big, big jumps coming when -- >> after earnings. >> after earnings. it loves to react to earnings and big news.

yesterday 3% move because it's still small in the grand scheme of things. >> but you have to wonder when does valuation become a big concern. it's a big concern for any company with that type of move in the stock. but people will say does the fundamental picture mix match from the price. >> well played to those invested in it. target plans to double it's stock buy back program and boost it's quarterly dividend by 8%. that news came out late on tuesday hours after they accidentally posted the statement on its website earlier than planned. the release appeared ahead of a board meeting on tuesday afternoon and the company's shareholder meet chging which takes place today. >> tesla ceo says deliveries of the new model x suv will start in three to four months. at the company's annual meeting he says the cross over vehicle is shaping up to be five stars

in every safety category. he also announce oedd the ceo will retire later this year. ahuja joined tesla seven years ago from ford. you can see the stock down .9% in frankfurt. >> now leaders meet in brussels but will greek debt talks still steal the spotlight? we're back in two minutes.

>> here are your headlines. the sell off in bonds hits 1% since the first time since september. it's unlikely the fed will hike rates in 2015. netflix stocks hits a record high as shareholders approve a massive increase in shares. >> the greek government is still waiting for response regarding the latest proposal to reach a reforms deal. this as greek debt talks could overshadow an american leader summit in brussels. let's get out to nancy live on the ground in brussels. >> thank you wilf. well confusion keeps building here in brussels. as we told you earlier an eu source told cnbc that he was due to meet with the commission

president. the french government has since said that they have no plans for him to meet with him later today but we did hear from the greek government saying that such talks would take place. a lot of confusion surrounding the summit which is intended to be a meeting of eu leaders and latin america head of states. but it is significant that it will be his first visit since submitting that counter debt offer to creditors which he said was absurd when speaking to parliament in athens. there could be a lot of drama building. whether or not formal talks take place we have been told that unofficial discussions are expected but no details on the timing. more on that as soon as we get it. >> thank you very much. >> how big of a concern is greece in today's trade. let's bring in steven. he is fiercely defending protecting pensions. but with now less than 30 days until the deadline approaching

at the end of june will he be left with no choice but to scale back on these concessions? >> he will and at the end of the day that's what the market is assuming. there's a risk that we could have a very sudden deterioration in market conditions and in the euro. the fundamental issue is his definition of a reform is different than what everybody else in wrurp's definition is. he wants a stronger public sector and bigger public sector and they need more private sector and more vigorous economy to get the growth they want. they're talking two different languages and they haven't approached each other on this over the last six months. >> we're looking up another quarter of a percent today. we have seen the u.s. dollar broadly selling off despite the u.s. ten year yield rising. what's happening there? >> i think the euro isn't

responding to greece. it's like always a second away from disaster and she gets rescued. there is the possibility that the train runs her over at some point and that's what the market is factoring in. the key issue is notwithstanding good economic data the big moves from come out of europe. the big moves are position unwinding of the long bund position and nobody has a good idea how far it's going to go and the ecb while it's saying that they're accepting volatility they haven't given any indication of where they would like it to trade. the one thing draghi did say that the market ignored was that he has tools to act if it goes beyond what they want but he didn't say what they wanted it to do. >> let's touch on emerging markets very quickly. when we do start seeing rates going up who in the emerging markets is best placed to deal with the rising rate environment? >> none of the above might be the answer. the real issue is that you

know, right now we have the g-2 with very sharp rate increases so anyone who is a high beta currency and depends on foreign capital is in trouble. viewed as a stable economic and political environment will do the best but it's going to be difficult. >> steven thank you for joining us. >> enjoy your time in london. >> thank you. >> the global head of g-10 fx strategy at citi. >> still to come. they say a diamond is a girl's best friend but why millennials could be damaging the future of this multibillion dollar industry. we have that story coming up after the short break. don't go away. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift?

ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

two oil companies answer questions about whether their fracking activities are leading to a vast increase in the number of earthquakes in the region. morgan has a preview of what's at stake. >> it's the latest chapter in a con debate between oil production and earthquakes. today kicks off a series of hearings where they'll speak about the potential between the waste water disposal wells and

up surge in seismic activity. a recent study by scientists found that some disposal wells drilled too deeply along faultlines can trigger quakes. these injection wells are used to get rid of the toxic waste water that's a byproduct of oil and gas drilling. in states where oil production has soared so too has seismic activity but in texas where earthquakes used to rare more than 3 dozen quakes magnitude 2.5 or higher struck since the start of this year. one of the latest in the dallas ft. worth areas spurred them to request the investigation of several disposal wells including two owned by exxon mobils xto unit. that's what's happening today. they'll discuss the sites and ahead of that the comment is not commenting and next week more energy companies doing the same.

then regulators decide whether to shut in the wells and if they do it will mark the first time that texas has held energy companies accountable for earthquakes. that in-turn could set a precedent for other states grappling with this issue as well and ultimately all of this could have big ramifications for shale oil producers. back to you. >> all right. now they may be a girl's best friend but the world's biggest gem makers are facing competition from handbags and wine. they have formed the diamond producers association. the advertising campaign aims to convince the millennial generation that diamonds are worth their hard earned cash. how about that? we did bring in goldman sachs a couple of weeks agatha did this study on millennials and what they're buying because they're seen as the next big consumer of goods. one of the big takeaways is they

are now looking to invest in a variety of different assets. not just stocks or bonds. they're also looking at one other alternative investment which speaks to what's happening here. >> have to say i wonder if this was a mistake. the whole point of diamonds is they have this elusive allure. they're super expensive and very very pressure. you don't want people our age having them left right and center. otherwise people start to think they're not as exclusive as they once were. >> so you wouldn't buy a diamond for a girl before marriage? i'm just wondering. >> that's not what i said but i don't think if they try to make them more attractive to younger generations therefore everyone is wearing diamonds for whatever reason then they lose their elusiveness. >> the allure. how did you say it? i'm always learning from you. the diamond debate continues.

plus jeb bush hits the road in europe before announcing his run for presidency but is someone else a favorite for the republican nomination? we have that story coming up. don't go away. by the time police arrive on a crime scene they could have little to go on. a vague description. a single piece of evidence. a partial plate number. with an app from ibm officers can now access

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welcome to worldwide exchange. i'm seema mody. >> i'm wil fres frostfred frost.

>> german bund hit 1% since september. it's unlikely the fed will hike rates this year. >> not this time. the msci holds off including chinese shares on its emerging market index but investors strug off -- shrug off the decision. jack ma insisting his firm is no threat to amazon and ebay. >> netflix streams ahead. shareholders improve a massive increase in shares paving the way for a stock split. >> if you're just tuning in thank you for joining us here on worldwide exchange. two important economic data points investors were digesting yesterday. first wholesale inventories in april rising by .4% which was twice the expectation.

much better the read on inventory levels in the u.s. also spiking higher to 5.38 million. this is the highest figure on record since the survey began in 2001. keep in mind a very important indicator that janet yellen watches when it comes to the slack in the labor market. in the u.s. right now premarket trade suggesting a higher open. the s&p 500 is still trading about 2% below it's record high. here in europe a little bit of a come back after six consecutive days of losses in europe where we did see the xetra dax yesterday move to the down side by around 1%. deepening it's move into direction territory. some of that having to do with the move we're seeing in the euro which is now at 113 against the dollar and a lot of that also has to do with the volatility we're seeing in the bond market. the german bund now yielding 1%. there you go. take a look at the 10 year

german bund at 95 holding on to 1%. not that big of a move in comparison to the u.s. ten year but investors say it's more psychologically significant. >> we're going to talk politics now. former florida governor kicked off a european tour by calling for closer trade and security ties between the u.s. and europe. in a speech bush said both sides have a common interest in marks across the world. he also emphasized it in the face of russian aggression in ukraine. >> the governor is expected to announce his candidacy for presidency on monday. it should only get larger with the anticipated announcements of the real estate mogul donald

trump and bobby jindal. james thank you for getting up early with us. how are you doing this morning? >> doing good. >> given the number of candidates on the republican side how important is the political operative choosed by all of these candidates to really have a unique message going forward? >> well listen every one of these republican candidates is going to have a big tax plan. we all know that. so sort of beyond that what are each of the candidates going to say that's going to separate themselves to everybody else and hopefully set them up for a strong challenge come the general election. what's interesting is that we have bush announcing officially next week. he had a soft announcement earlier this year. we have no idea what the

economic plan is. i'm going to be looking for next week some details. what is the bush tax plan? what is the bush plan on regulation. what does he want to do about education. he's very broadly sketched some things out so we'll be looking for him to fill in that broad picture. >> you just listed quite a long list of things we want to hear from bush about. foreign policy wasn't one of them. why is he on the foreign tour at the moment? >> listen u.s. senators have a huge advantage in that they can be on foreign policy committees or defense committees and have a natural edge on foreign policy and bush will be going up against u.s. senators most likely marco rubio with a lot of foreign policy experience. that's one of his strong points and bush has been governor of florida. obviously his brother is president of the united states.

he's looking to move those credentials as it looks like it will be a key issue. >> does bush have a good chance of winning the republican ticket? >> listen when he announced there was talk of a shock and awe strategy. he was bog to raise a lot of money and scare some people from not running. that hasn't worked. look like he won't raise quite as much money as what he thought. everybody and their brother and their sister is getting into this race including rubio in florida who looks like maybe is one of his main challengers. so he needs this announcement to be his second launch. usually when you announce you have your moment in the sun so he needs to reintroduce himself to republican voters. >> let's talk about the democrat side of the coin. is hilary nailed on and do the republicans welcome her nomination because they should be able to differentiate themselves quite clearly from

her. >> she is basically a have to run. they'll paint her as the third term president obama and they're going to tie her to that. unfortunately for republicans the economy is gaining momentum so maybe they won't look like quite as much of a failure as what republicans think but she is going to be able to raise a lot of money. she's not going to have a hard serious challenger so she'll be able to come out during the general election with a very strong message. >> i think the big question is how far left does clinton need to go to mobilize voters and basically appeal to the general broader audience? >> that's going to be the hillary clinton strategy rather than try to have a more sen trous message to appeal to the broad swath of the american public the democratic plan is going to be to motivate their

core voters and get them out and make sure that all the people that voted for obama vote for hilary. it will be a more to the left message. some people on wall street are worried that she'll be focussing hard on inequality. higher taxes on the rich. maybe more financial reforms so there's some concern among her potential donors that she is going to be too far to the left which gives republicans an tun to maybe steal some of that money over and help finance their campaigns. >> it's going to be an interesting run. presidential race coming up. thank you for getting up early with us here on worldwide exchange. economic policy analyst at american enterprise institute. let's get you a look at the other top stories at this hour. an fda panel backing a new drug that fights ldl or so-called bad cholesterol cholesterol. it is only used by patients with abnormally high cholesterol

levels. they also want more data on whether the drug reduces problems. sanofi up about .3%. regeneron is down by 1% in frankfurt. >> big u.s. cities are clamping down on salt and sugar. they will require a warning label at chain restaurants. it will be the first city in the country to do so. san francisco approved ads on sodas and other drinks. it goes for a second vote next week. everies to impose a tax did fail last year. >> you're a big fan of coach and pepsi. >> try to go for the diet versions but yeah i have probably one a day. >> bad. >> probably more a fan of salt though. heyer my food with salt. >> i'm all about the kale and banana smoothies, you should join any camp. >> it's boring. i can't bear it.

>> it's good for you. when elon musk. musk musk. when he talks to investors they listen. the tesla ceo weighs in on a number of key issues at the shareholders meeting. the details of that coming up after the break. you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business.

all right in a stock you

want to watch today, netflix investors improved a massive increase in the number of shares a company can issue. a first move toward a possible stock split. management will seek board approval for a split in due course. now netflix won approval to raise it's share authorization nearly 30 fold to 5 billion. the best performing stock on the nasdaq 100. as you can see year to date up about 90%. a big win for netflix bulls out there. >> a really big move as well. there's big jumps on the chart behind you. they have been relating to earnings. it will increase liquidity but it's nothing fundamental. >> it could bring in more buyers. >> but very positive move for it yesterday. let's switch focus, elon musk took to the stage at tesla's manual meeting on tuesday fielding questions for more than an hour on a wide variety of topics.

landon was following it and is going to tell us all the details. >> good morning to you. he was at the company's annual meeting held at the computer history museum at mountainview california. he confirms the first deliveries of the model x will start in three to four months. it was set to go into production in 2013 but it's been delayed twice. it has doors that open upwards is shaping up to be five stars in every safety category. he also says tesla will release an early version of the auto pilot program for the sedan by the end of the month. it has an auto steer function that uses cameras, radar and ultrasonic sensors. >> i'm actually testing several of the auto steering functionally every week. so we make sort of improvements

most weeks it gets better. some weeks it gets worse. >> tesla's new battery factor should begin production by the middle of next year. it will like lie reach full production capacity in the next three to four years and in an unexpected announcement he says the ceo is retiring later this year. he joined the company as the first cfo several years ago first worked at ford. he says the decision was difficult but it is time to check a few things off his bucket list. musk saying the company expects annual fwroeth annual growth of 50%. have you drichven a tesla? >> i haven't. >> seema has. >> they're seriously expensive. they'll have to send us on a test drive. >> they're so quite. you feel like other cars won't

even hear you on the road. that's my biggest fear. >> i like to put this out there if you're watching mr. musk invite me for a test drive so i can do a feature on it. >> there's plenty that have them. >> but i can't buy one. >> i'm sure you got friends. >> anyway we'll leave it there. thank you very much as ever. >> from tesla to facebook. facebook is bringing in more ad dollars from overseas markets. they generate 5d 1% of revenue from outside the u.s. they're the fastest in the world at 57%. this is the first time facebook has detailed ad sales outside the u.s. and canada as a percentage of global revenue. taking a look at shares of facebook. it's had an okay run and it's up about 9% but is out performing witter shares only up about 2% year to date. the big question is will it continue to outperform it's

social media peers in 2015. >> i think it's the second part. the growth that's really interesting here because in terms of foreign earnings other companies like google have 57% of theirs from outside the u.s. gook facebook crossing 57%. asia 57% it's growing at and facebook now that it's been allowed to enter certain markets is grabbing a lot of market share and that's exciting. >> in markets like india they were not the first mover. in fact this old social media firm dominated the mobile audience in india but because of its marketing strategy and it's focus on really delivering growth in india it's been able to be the number one social media platform. >> are you on orchid. >> i was when i lived in india. now i'm on book. i like twitter. it's all about instagram and snap chat.

>> the social media queen. >> i got to be. you botgot to stay present. >> i got bored. i left took. instarting rotation in instagram for private and twitter for work. >> you love instagram. >> i do but it's a private account. franklin graham is moving up to $1 million dollars away from wells fargo in protest to the bank's ad campaign featuring a lesbian couple. it caused up roar after he said they're moving to bb&t. they don't take formal position on social issues. he is also staying clear of tiffany following an advert showing two men getting engaged. >> they may be a world's best friend but the world's biggest gem makers are facing strong competition from handbags gadgets and wine.

it's promptdeded a number of big players to form the advertising groups association. they are to convince the millennial generation that diamonds are worth their hard earned cash. i like how there's new ways to express our love and appreciation for people. there's a variety of different gifts you can give a girl that you love. >> but this story is the opposite. they want them to be top of the list but it's a good thing that they're not. i like how they're finding different ways to express their love and appreciation. >> an apple watch. >> a gift card. >> the wine we mentioned in there. >> sure. a tesla. there's so many different ideas. >> right. before we go to break let's remind you of the headlines. >> here they are. a sell off in bonds as the german ten year yield hits 1% for the first time since september. it's unlikely the fed will hike rates in 2015 plus netflix stocks hits a record high as shareholders approve a massive

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>> still waiting for a response from creditor to reach a proposal for the cash for reforms deal. this as debt talks could overshadow a summit in brussels. nancy is out to that summit. let's get out to her now. >> thanks wilf. the greek prime minister is due to arrive here in just over an hour along with 60 other leaders for a summit intended to focus on latin american trade deals however a lot of back and forth over whether greek debt talks will take place on the side but even if they do the two sides are still at odds and i would not hold your breath over a deal

happening today but what could be exciting is a restart between trade leaders and mexico is in the midst of energy reorganization. they're opening up to liberalize energy sources and a lot of eu players are really keen to get involve sod perhaps we could see some developments on that front. also the brazilian president is due to be here and she has just introduced a broad infrastructure program in her country. we'll see whether any european players are looking to get involved for that program. never a dull day in brussels here. back to you. >> thank you. we'll move on and talk about alibaba. jack ma is on a charm offensive in the u.s. this week. he spoke to the economic club of new york on tuesday predicting that the chinese e-commerce giant will pass walmart in sales this year. >> he also spoke about alibaba's blockbuster ipo last year. he told the audience if i had another life i would keep my company private. it's not only our people that watch us the globe watches us. you have to get used to it.

shares are down around 6% since the company went public and keep in mind jack ma will be on power lunch at 2:00 p.m. eastern. >> private or public. we want to hear from you on this debate. should companies stay private or should they go public? we have been asking you throughout the show. john said remain private. who needs guys like carl iicahn tweeting for dollars after they become public. >> the next big company to go public that will captivate the attention the way book and twitter did? >> i don't know. >> uber. >> could be. >> will they go public. or spotify. >> that's a great example of what we were seeing earlier. >> reported at $50 million. >> why does it immediate to go public. >> sometimes it's a natural evolution for the company regardless of getting the type of capital they need in the

private market. >> in terms of leadership are thr already better prepared? elon musk and jack ma they're the entrepreneurs and innovators. they're not the s&p 500 ceos jumping from ship to ship. >> they will be though. this is a new phase of leadership. these are fast growing companies commanding the market attention. that's why there's so much focus on the type of growth that companies are seeing. >> but elon musk has said he will stand down at some point when the company gets that. do you think jack ma is someone that will be leading a big listed company for two decades. >> good point. he is an investor and innovator so you could see him find new ventures and new opportunities but his comments yesterday were just basically him getting used to the public eye and volatility that comes with watching your stock. >> but then he could be chairman and then he would be chairman ma. >> that's a nice little role

there. >> did you get it? >> we got it. billionaire investor jeff gundlach says the chances the fed hikes interest rates by the end of the year are less than 50%. in a client web cast he says that's partly because of a lack of wage inflation. last year he correctly forecasted treasury yields would fall because inflationary pressures were nonexistent. >> we have seen the ten year german yield fall back below 0.99%. still elevated levels the ten year u.s. note 2.46. quick look at european markets as well which have found a little bit of strength toward the last hour or so having opened down earlier. the dax up the best part of a percent. >> german dax back above 11,000. u.s. futures indicating a higher open. the dow up 75 points. that does it for us here on

worldwide exchange. we'll see you again tomorrow.

>> good morning, under investigation just days after apple unveiled it's new paid music subscription service two states attorney general want to know if the company violated antitrust rules in negotiation with record labels. new this morning, netflix takes one step closer to a stock split. it's the topper former on the nasdaq 100 this year and now investors okayed a big increase in the number of the shares that the company has authorized to issue. plus the food police. proving a health warning on sugary drink ads.

almost like cigarettes. meanwhile they want a high salt label on chain restaurant menus. i'm afraid to even drink this water today. squawk box begins right now. >> live from new york where business never sleeps this is squawk box. ♪ >> it's over. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. remember last summer's celeb gate? they ended up online after a hack. jennifer lawrence kate upton and kirsten dunst were effected. now it may reach wider than known. the breach of almost 600 online storage acounts. we'll have more on that story a little bit later this ho