"street signs." i'm carolin roth. these are your headlines. europe's biggest bank, hsbc, sees a near 20% drop in first quarter pretax profit, but it beats expectations as trading revenues support earnings, sending shares higher in hong kong and london. >> the uk is going to be interesting for the next two years, i suspect. but again the business has grown well in that area. if you want to orient tate that to a particular region where we see growth opportunities, it's asia. shell posting a 130% jump in

net income as the recovery in the crude price helps oil major boost profits ahead of expectations, while refining margins improve. the u.s. and brazil give ab inbev a headache as earnings slip the brewers two largest markets, despite the tie-up with sabmiller progressing well. front france equities hitting a high as emanuel macron tears into marine le pen plans before the final election calling her plans nonsensical. >> to make this happen, we have to leave a system that coproduced you. you are living thanks to it. you are its parasite. good morning. glad you're with us once again. straight to breaking news in the form of central bank decision, this time from oslo. as expected, norway's bank

leaving the key rate unchanged. the key policy rate will most likely remain at 0.5% in the period ahead. there is no statement coming along with that decision today. no rate path forecast. it says the 12-month rise in the cpi rate was approximately as expe expected. so no major surprised from the norges bank this morning. let's look at the eurozone pmis on the services front. we saw some pretty strong manufacturing pmis earlier this week at six-year highs for the eurozone. the eurozone april services pmi came in at 56.4 versus a forecast of 56.2. the march number, just by comparison, that was 56. the april composite pmi for the eurozone at 56..

a bit higher than forecast. we saw that the french number that has moderated a little bit, but we saw really a monster number out of italy. let's move on to the european markets and see how they're doing. we're seeing a sea of green. the ftse 100 up by 1%. the cac trading at the highest levels since january of 2008, up by 0.3%. when we look at the sectors, once again it's all about corporate earnings. you'll see that the banks are doing well. this is in part because that sector is given a boost by hsbc. we'll talk about that in a few seconds. autos doing well, up by 1.2%. bmw one of the key stocks to watch there. we have an analyst in house to discuss that. on the down side, basic resources, financial services and real estate slightly underperforming. let's get back to the banking picture.

shares in hsbc are trading higher after the company reported first quarter profits of $5 billion beating analyst expectations. the uk lender also saw its ct 1 ratio coming in at 4.3%. iain mackay commented. >> we see the intention of the committee and the u.s. administration to put a hold on any new regulation and to reflect on whether the regulation implemented over the last few years has struck the right balance. that certainly is encouraging to see. the industry is still absorbing that regulation and implementing it. i think again, when you see the strength of our capital print this quarter, we're in a great space from regulation perspective. and that is -- that's central to focus from an hsbc standpoint.

when wealkbout where we go from litition we provide detailed disclosures around that. you know, i think it's one of those unpredictable areas up. shares of shell, they're trading higher after the oil and gas major reported a sharp increase in quarterly net profit beating expectations. the company attributed its improved performance to a pick up in oil prices and better refining margins. first quarter net income rose 136%. staying in the sector, statoil posted an adjusted operating profit of 3$3.3 billion in the first quarter, well above analysts expectations for 2$2.7 billion. they said higher crude prices and organic production growth were boosting cash flow. and finally we'll talk about bmw. let's look at the stock, because it is trading to the upside this morning. bmw has seen net profit jump by 31% thanks to one-off gains which helped offset weaker

margins. the automaker incurred higher auto costs because of investments and self-driving technology. bmw added it predicts a slight increase in profits. let's dig deeper into the numbers with the head of the global automotive research sector at isi. strong first quarter. do we extrapolate this to the rest of the year? >> the company doesn't want that. they don't want analysts to write estimates so to chase the company. but it was, as you said earlier, a monster quarter. they beat expectations by about 20%. today we see a free cash flow of 1.6 billion euros in the first quarter. they're launching the 5 series this year. the momentum should be good for the rest of the year.

>> when we look at the core margin for the auto business, 9.4% for the full year, a range of 8% to 10%. do you think that margin could be easily surpassed? >> i think they'll end up in the middle of the 8% to 10% range which is a great achievement for a company that keeps growing, dealing with electrifycation, autonomous driving. they've been in this margin corridor for 28 quarters in a row. people call it a cyclical stock. i think it's a great company that's outgrowing market expectations every year. >> you recently put out a note, that was one of the bullish notes i've seen when it comes to bmw. you say the naysayers, the bears are wrong. why is that? >> we've been on the sidelines for about a year on the stock. there's a lot of talk about u.s. market peaking, which has put some pressure on the sector. now, look, the market is forecasting flat earnings for the company for two years. hardly revenue growth. hardly unit sales growth.

bmw is launching more product than any other premiummaker globally. so i think the market got top-line estimates and bottom line wrong. >> the market is right about one thing, pricing power. we've seen pricing pressures, 2.8 billion euros was the impact of lost pricing over the past five years. you put that in your note. how quickly can they turn this around? >> i think it coincides with the product momentum. you have fresh product, you can fix your pricing and discount structure, they're working on a much more effective sale of the option packages. the new cfo, he has some experience running the sales department for europe. i think he's the right guy to restore which is my most critical point on the company, this net price 2.8 billion they've lost. >> do you think there will be an

increase when it comes to the capital return story? >> that's a story for the whole sector. most companies are massively overcapitalized. bmw is north of 20 billion net cash. the industry has to decide what to do with the enormous cash levels, pay special dividends, carve out certain parts of the business, but running a business with that level of net cash when you achieftechieve north of 18% on equity, financially it doesn't make sense, unless the world is coming to an end and they need all that cash in the next two, three years. >> what if we do get the border adjustment tax? that would keep them from giving more money back to shareholders, right? is it coming or not? >> we don't think it's coming. what we're hearing out of washington probably supports that. in bmw's case, bmw is the biggest exporter of cars from

the u.s., so they have a fairly balanced set up. >> always a pleasure speaking with you. appreciate it. let's get back to some other earnings out there. those that are not doing so well. shares of next are selling off in early trade as the company cut the top end of its profit guidance. the retailer was pessimistic on the uk consumer and said the current environment was challenging. shoppers are feeling the pinch. they said any rise in wages was offset by inflation pushing real wage growth to near zero. look at the stock off by 6.63%. adidas scored larger than expected sales and profits during the first quarter thanks to stronger growth in online trading and a boost to the northwestern performance. the german sports wear brand confirmed its 2017 outlook saying it expected sales to rise by 11% to 13%. stay tuned for 12:25 cet, that's

when we speak to the ceo of adidas, kasper rorsted. appreciate seeing all your e-mails this morning. e-mail the show, streetsignseurope@cnbc.com. you can also find us on twitter, streetsignseope@cnbc and tweet me directly at @carolincnbc. we are going to go for a quick break. prime minister theresa may launchedary stronges ed her strn the bureaucrats of the eurozone accusing them trying to meddle in elections.

welcome back to the show. shares in ab inbev are trading sharply higher after the company posted a near 6% rise in core profit. the world's largest brewer reported total quarterly volumes

above estimates and expects revenue growth to accelerate this year. and carlsberg sales beat expectations in the first quarter. the danish brewer reported organic revenue growth of 4% despite flat volumes. the carlsberg ceo reaffirmed the full-year outlook saying it was on track to achieve mid single digit growth. prime minister theresa may blasted eu politicians for making threats against the uk in a bid to influence the country's general election and undermine brexit. speaking outside downing street yesterday, may said some in the continent did not want brexit to succeed. >> britain's negotiations position in europe has been misrepresented in the continental press. the european commission's negotiating stance has hardened. threats against britain have been issued by european politicians and officials. all of these acts have been

deliberately timed to affect the result of the general election that will take place on the 8th of june. the events of the last few days have shown that whatever our wishes and however reasonable the position of some european leaders there are some in brussels who don't want this to succeed. >> let's get out to willem marx in westminster. a couple days ago she said all the talk about her disastrous dinner with jean-claude juncker was gossip. now this. was she wearing the brexit hat or the uk general election hat? >> i think she's going to have to wear both hats for the next few weeks. this might play well to torry voters by pitting the uk against the european union in this way and using us versus them argument. last night she talked about people voting for my team. one of the concerns for the conservative party, even though they have this commanding lead

in the polls is voter turnout. a lot of would-be voters may think it's not worth going to the polls on june 8th to vote. that's something they can pointer with this line of argument that the brussels officials are threatening our democracy. those criticisms came in the back of some comments from michelle barn dominguezier sayi would not be a quick and painful process. also a report earlier in the week about that disastrous dinner with jean-claude juncker was said to leave number 10 downing street thinking that the prime minister was delusional. and also comments from angela merkel who says she doesn't think the british need to have illusions about how easy brexit negotiations will be. it's in response to those things that theresa may launched this blistering attack on the european union officials who have been briefing against her. whether that's playing as part of the negotiating tactics, whether that's part of her campaign here in the uk, it is possible it's a bit of both.

>> all right. willem, thank you very much for that. the fed kept interest rates on hold at its may meeting on wednesday but maintained expectations for further 2017 rate hikes. it views the slowing growth in the first quarter as likely transitory believing the fundamentals underpinning growth and consumption remain solid. steve liesman has more. >> reporter: the federal reserve looked through recent economic weakness and signaled to markets that a june rate hike remains on track. it went on to say fundamentals underpinning the continued growth of consumption remain solid. and that the committee views slowing in growth during the first quarter as likely transitory. the fed repeated the line from march where it said economic conditions would likely warrant gradual hikes in the future leaving many on wall street to think a june rate hike is more in play now. >> it's basically what we should have expected. that the economic weakness is

probably transitory, they want to stay on path to increase rates. >> fed funds future showed a sizable chance for a hike coming this june. the fed did not change its balance sheet language saying it would reinvest principle. most think a plan to reduce holdings will come later this year. steve liesman, cnbc business news in washington. for discussion we have peter rosenstrike head of market strategy around the desk. does the fed need to hike twice this year if the reflation story under trump is not playing out? >> two things. one, we need to look at what is important to the fed. they keep on acknowledging that the labor markets are strong. probably the best gauge of economic activity in the u.s. and we are seeing an extremely strong labor market in their view, that's aey economic indicator. second of all, with the potential passage of the u.s. healthcare bill, you know, trump

is finally putting in line very powerful tool, which is a republican house and senate. so all of this, the jokes and trump will never be able to put anything through, he will be a lame duck president, all the way through, he may have to start changing the story quickly. that trump reflation trade may come on hard and fast and quickly. >> do you think along with some others in the market that this friday the jobs report could be the turning point for the bond market but by extension the u.s. dollar? when you say it is all about jobs, could that cause a major re-rating when it comes to bonds? >> absolutely. at the start of the year the story was u.s. dollar domination. we took a back seat on that story, waited for things to play out. but that story will come back into play in our mind. we have a number of variables lining up well for the u.s. dollar, whether it's the re-valuation of the trump trade, the idea that the fed is raising interest rates with the tighter labor markets, a lower interest

rate environment with the fed raising rates. you know, all will support a u.s. dollar rally. >> what does that mean for the euro/dollar index if we are expecting relief rally if and when macron wins the second round of the presidential elections this friday? you have a stronger euro, a strongerdollar. which force do you think will be bigger? >> i think there's a big if with the french election. while the consensus says macron wins and walks away and we have that belief there are fringe analysts out there who think le pen does have a good chance. so we need to go through this hurdle before we start thinking about a significant euro rally. the divergence trade will balance each other out. i don't see an exceptional rally in the euro against the dollar because both are going to sort of net each other out. we don't see a huge explosion in euro/dollar or dollar one way or

the other. >> that means we're going to be range-bound when it comes to the movements in euro/dollar. not going to parity or susta sustainably above 1.10? >> the pmis today came out longer. inflation continues to outpace the ecb expectations. they need to address the elephant in the room, the ecb, and start saying they have to consider the possibility of maybe raising ratesheading towards a more normalized policy. that with the fed raising rates and the ecb considering the possibility of increasing rates, means, yes, a euro/dollar range bound is likely what we'll see. >> that's a long time off for the ecb to raise rates. before that, we will see a change in language. >> we see about 20 basis points of ecb increasing in 2018. already starting to be priced into the market. the markets are thinking about

it we're not saying that we believe the ecb will raise rates in 2017. but they'll start removing e language for emergency conditions that will start the process to tightening. so it's a very, very early stage. but enough for the market to start visualizing a more normalized ecb. >> let's come back to the french situation. is there a trade going into the second round? or is everything completely priced in? >> i think there's likely to be a -- somewhat of a relief rally. especially after last night, you know, dropping down knuckle up debate. i think people will be quite relieved that macron wins it and clears it. but there is the idea that the local elections, you know, the third presidential elections also increase the risk of the national front increasing their role in parliament. it's not completely done, but we believe there's a risk rally in there. the idea that a hidden vote will

pop out of nowhere, and lead le pen into victory is an outside trade now. >> i have to say, i tried to watch parts of the debate last night. my french is not that good. i know -- >> unfortunately my french is not -- >> you lived there for ten years. >> my french is not as good as it should be. >> i want to congratulate you on your call on pound sterling. you were here a month ago. you said go against the trend, buy the pound sterling. you couldn't see the snap election announcement coming but it worked in your favor. what do you do now? do you take profits? >> thank you very much for acknowledging that. i rarely get the praise iedy ser i deserve as an analyst. we're optimistic about the sterling. we don't believe it will continue to this hard brexit. the rhetoric is picking up. volatility is in there. but we think the long-term prospects of a completely

separate uk/europe is unlikely. i think the end result is a much more softer, kinder, gentler brexit. that makes the focus look at the economic conditions in the uk. and, you know, despite the horror stories, we've not seen a contraction in consumption significantly. we saw inflation pressures continue. the boe will keep an eye on that. that should keep the sterling well supported. >> peter, thank you very much. peter rosenstrike, head of market strategy from swissquote bank. the sparks may have been flying last night when le pen and macron went to head to head on their final debate. head online to see two market heavyweights battle it out over whether valuations matter. we'll be back with plenty more uk data after this short break.

welcome back. you're still watching "street signs." i'm carolin roth. these are your headlines. europe's biggest bank, hsbc, sees a near 20% drop in first quarter pretax profit, but it beats expectations as trading revenues support earnings, sending shares higher in hong kong and london. >> the uk is going to be interesting for the next two years, i suspect. but again the business has

progressed well in that area. if you want to orientate that to a particular region where we see growth opportunities, it's asia. shell posting a 130% jump in net income as the recovery in the crude price helps oil major boost profits ahead of expectations, while refining margins improve. the u.s. and brazil give ab inbev a headache as earnings slip in the brewers two largest markets, despite the tie-up with sabmiller progressing well. >> french equities hitting a high as emanuel macron tears into marine le pen plans in the final debate before the election calling her policies nonsensical. >> translator: the france i want will not be divided. to make this happen we will need to leave a system that coproduced you. you are the coproduction of the system you're denouncing. you are living thanks to it. you are its parasite. all right. we have some uk services pmi

numbers to tell you about. once again they are better than expected. this week, we had better than expected nufacturing, petter than expected construction pmis, and the trend continues with the services sect chor which is an important one for the economy. here are the numbers. uk april services pmi at 55.8, v versus a forecast of 55.6. and the march services pmi was 55. once again beating expectations and a nice increase from the month of march. there you go. sterling/dollar is rising slightly, currently changing hands at 12.83. t though we're not seeing an outsized reaction to the better than expected numbers at this point. we are broadly higher. the ftse higher up by 0.3%. a lot of earnings driving the markets. the xetra dax trading at a new

record high, up by 0.23%. the cac 40 trading at the highest level since january 2008. as promised we have so many earnings. we have this fantastic wall for you with all the earnings. hsbc's first quarter pretax profit fell 19% to just under $5 billion. the bank beat expectations amid higher trading revenues. socgen has also suffered a 19% drop in net income. this as it raised legal provisions by 350 million euros. siemens has beat expectations in its second quarter thanks to an 18% ride in industrial profit. the german group saw strength in revenue and orders except in the healthcare business which it is considering to sell. adidas has scored larger than expected sales and profits during the first quarter. this thanks to strengthening growth in online trading and a

boost to north american performance. anheuser bush inbev posting a 6% rise in core profit but missed expectations as weaker earnings in the u.s. and brazil weighed on the first quarter. look at the shares up by 4.1%. shell reported a sharp increase in quarterly net profit beating expectations. this due to stronger oil prices and better refining margins. airfrance-klm launched a net loss of 260 million euros this quarter but sounded a positive tone saying demand from asia and south america was recovering. infineon is called lower. i think it would be trang lower as the markets a now open despite benefiting from the auto sector demand for its cruise control chips. and alstom confirming financial targets for the near-term. also saying adjusted earnings

before interest have increased by 15% year on year. in fact, we will speak to the co of alstom in about a half hour's time. let's stick with france for a moment. the french presidential candidates, marine le pen and emanuel macron squared off in their final tv debate ahead of the second round of voting on sunday. the two candidates clashed on security, the economy, and their visions for france in the world. macron accused le pen of wanting to close france off from the rest of europe. take a listen. >> translator: what you carry is the spirit of defeat. it is to tell our citizens europe is too hard, so we will fall back and close our borders. we'll exit the euro, exit europe, because others can succeed but not us. it's a spirit of defeat in the fight against terrorism. because this fight every country is facing it. every democracy has to confront it. >> but marine le pen fired back accusing macron of fostering

unbridled globalization. >> translator: the political choice the french people have to make is clear. mr. macron is a candidate of unbridled globalization, insecurity, social brutality, a war of everyone against everyone else. the dismembering of france, notably by big financial interests, and humanitarianism d all of that led by mr. hollande who is behind it alln the most obvious way. >> let's get out to claire fournier who has been watching the debate on french television. i'm looking this morning and it says 63% of viewers in a snap poll found that macron was more convincing. what's the verdict from where you are? >> well, yes, you're right. the feeling this morning here is that he appeared more presidential and he stayed remarkably calm considering all the attacks that she launched at

him. she called him a puppet of finance, of globalization. she said he was supported by a radical islamist. there was a lot of work, i can tell you, for fact checkers on social media. and emanuel macron replied to her saying she was a liar and using alternate facts, just like donald trump. but the feeling is, yes, she was pretty aggressive. and that he managed to remain calm. it was an out of the ordinary debate. it was the first time that the two were confronted eye to eye. they have never debated just the two of them before. it was also the first time that a far-right candidate was making it to a debate between the two rounds. france's really at a turning point. i want to discuss it with a european economist. after the first round, there was a sense of relief from the investors on the market that macron was probably going to

win. two weeks after that, three days away from the second round, are investors still confident? what do you feel? >> it's hard to be fully confident. the voters generally speaking remain undecided. 20% of them are undecided. 50% of them are actually voting by rejection according to the polls that remain very much of a worry to some extent. nonetheless the polls point to a consistent 60/40 win by mr. macron. so a 20 percentage point win for him. so these were really reliable in e first round. we have to rely again on those for the second round. >> as you know, we talk a lot about the third round of these elections, which is the legislative elections, what is at stake for the 11th and 18th of june? >> exactly. it's actually a third and a fourth round, because we'll have two rounds of parliamentary elections. i think it's allowed, because nothing can be done if you don't have parliament with you.

the fact is that we have a fragmented political landscape, with four, maybe five forces. we could have four of the five forces into the second round of the parliamentary elections, which gives certainty as to whether mr. macron or mrs. le pen could get a majority in the parliament. >> i spoke to the senior adviser to marine le pen this morning. he said the front national is aiming at 120 seats in parliament. do you think it's possible? they have do mps now. >> they have two mps. yesterday was the first real poll which gave between 15 and 20 tops, mps for them. which is the first estimate. we have to see more of these. but clearly they may be on the rise from where they have currently. but it will be very much uncertain at this stage. >> will be a major force in the coming years, that's forever certain considering her results in the presidential elections.

did you understand what she wants to do with the euro? that wasn't very clear, was it? >> it's hard to say, really. there's no real legal framework to get out of the euro. it is understoo she wants to have coordined withdrawal of every single country out of the euro area. that's her major stake for negotiations over the next 6 to 9 months. but we have to see how it goes. we have to see how it goes on sunday. >> she's probably doing that, bag little confusing around the euro because it scares a lot of french people. they don't want to leave the euro so much. >> absolutely not. the polls again have been really consistent. the french population is between 70%, 75% in favor of staying in the euro, staying in the eu, which is remarkable compared to other countries, like italy.

i think that remains a major feature. >> thank you very much. car carolin, we'll watch the level of abstention. as a reminder, the second round is in the middle of a bank holiday here that could worsen the abstention level. >> that's a very good point. thank you very much for that. you and i will be working on sunday. do join us on sunday for live coverage of the final round of the french presidential election. we will have reaction from across paris asthma routi marin faces off against emanuel macron. we will have a special program online and added coverage on our blog. let's turn to the u.s. house republicans scheduled a vote for their healthcare bill today saying they have enough support to pass legislation through the house. the vote follows a scramble by the white house and congressional leaders to win support before the next recess. the american medical

association, american heart association, and american cancer society have all reiterated their opposition to the bill. >> house republicans say there will be a vote to repeal major portions of the healthcare vote. the president and congressional leaders scrambled for support. today two key republicans who met with the president announced they went from no votes to yes votes. >> he said this bill will be just as strong on pre-existing conditions as obamacare. >> reporter: $8 billion will ease insurance costs for americans with pre-existing conditions. democrats believe more needs to be done. >> this new change is like administering cough medicine to someone with stage four cancer. >> reporter: a previous version of healthcare reform was halted

back in march. someone is feeling slightly nauseous. for the first time, fbi director james comey publicly explained why he announced the fbi was reopening the clinton e-mail investigation days before the elections. speaking at a senate hearing on wednesday, comb i weey was sicky the possibility that he might have swayed the election but stands by his decision. >> reporter: a passion in the dafs from the fbi director. he said he faced two painful options. >> i stared at speak and conceal. speak would be really bad. there's an election in 11 days. that would be really bad. concealing in my view would be catastrophic. not just to the fbi but well beyond. >> reporter: just yesterday hillary clinton said disclosure

was a factor in her defeat in response to that, preside trump tweeted that comey gave her free pass for many bad deeds. comey says he has no second thoughts. this is terrible. it makes me mildly nauseous to think we had an impact on the election, but it wouldn't change the decision. >> reporter: he said the last discovery was 40,000 e-mails sent by huma abedin sent to her husband, and think weiner. >> why did you concluder in the of them committed a crime sfwhfrnlgts . >> we didn't have any indication that ms. abedin felt she was violating the law. >> reporter: he said he did not know the fbi was looking into the trump campaign, but the clinton information was already disclosed by the justice department. he strongly hinted that the u.s.

is moving on criminal charges against julian assange. it crosses a line when it moves from being about trying to educate a public and becomes about intelligence porn, frankly. just pushing out information about sources and methods. >> reporter: arresting assange would be tough. he's holed up in ecuador's embassy in london. >> intelligence porn, never heard that before. comey said virtually nothing about the investigation of whether any trump campaign aides were helping russia influence the election, but said russia has not stopped and called it the greatest threat to american democracy of any nation on ea okay. after the short break, we will be speaking with the co of

telenorris.

if you want to stay on top of your health, one simple thing to do -- is take the pledge to go and get screened for the cancers that might affect you. so stand up to cancer and take the pledge at getscreenednow.org it only takes a minute to take care of yourself, and nothing rhymes with "org"...

telenor posting core earnings in line with expectations and slightly raising its profit margin forecast for the full year. we're joined by the co, sig sigve brekke. thank you very much for taking the time. tell me why you have decided to raise the forecast for the margin? is it because you exited india or is it underlying strength in the business? >> the margin forecast is adjusting for india not being in the portfolio anymore. so, the underlying forecast is 10%. >> let's talk about the fundamental business and what you're seeing across asia give than more than 50% or 60% of your revenues come from asia specifically, emerging asia. i know that penetration in countries like pakistan and

bangladesh are low what is the growth story there? how intact is it? >> there are two asias there. one is emerging asia, pakistan, bangladesh and myanmar. we see this quarter we had double digit growth in all these markets. that is based on consumption. more and more customers are having smartphones, and we expect that to continue. i foresee that that growth is going to remain in the coming quarter quarters. >> so what -- go ahead, sorry. >> we also see data in the markets, however we see aggressive competition in the last quarter. so what you're seeing is competition but also in some markets like myanmar you're

seeing a tax being levied on mobile. how bullish does it make you about countries like myanmar if governments increasingly want to tax you? >> well, that's an issue that we have in all markets. but we still see that we have very healthy margins, even after we have included the taxes. so all the emerging markets, asia, iluding myanmar, are quite bullish on the market. >> sigve, thank you very much for your time. in our an other news, time k said iphone 8 caused weakness in china. speaking to cnbc, cook touted the iphone as the greatest consumer product on the market.

>> the iphone is the best consumer product ever. that's what i feel about it. it's become so integrated and integral to our lives. you wouldn't think about leaving home without it. it's your -- your health data there. it's your -- you're paying with it from an apple pay point of view. you're messaging friends. the community that you're a part of. it's your navigation system. it's your news. >> tesla shares have fallen in extended hours trade after the electric carmaker posted a wider than expected first quarter loss. however the company's revenue jumped to $2.7 billion, up more than 50% on the prior year. tesla says it remains on track to begin the model 3 in july of this year. facebook shares fell from an all-time high in after hours trade down by 2.4%, that's despite posting a big earnings

beat. first quarter revenue rose 50% year-on-year to just over $8 billion. joining us is our own tech reporter, arjun kharpal. they're still reporting growth numbers of 50% what is the market so upset about? is this profit taking? >> it's a bit of both. there is profit taking. we've seen facebook shares rally, hit record highs. at the same time, facebook is growing at double digits, high double digits. but it has been slowing growth over the last three quarters. that's one of the big concerns. another concern is specifically around ad load, the idea that facebook can only shove so many ads into your news feed before it annoys users. it denoesn't want to keep increasing ads. so revenue could slow meaningfully this year because of that ad load issue. that's why the pane is focusing on other products. instagram, and bringing video

into facebook as well. these are new areas where the company can put ads as well. >> you make an interesting point when it comes to the ad load factor. obviously they can only put so many ads on a user's interface or site without annoying them and they don't come back. where else could they be putting the ads? there's been talk about putting ads in the middle of video. wouldn't that turn you off even more? >> i think there's something to be done here with video. whether that be original content for facebook, like we've seen other players in the social media sphere, like twitter, jump into. there's that potential. live video and instagram as well. there's video on the instagram platform, instagram stories, and what's app with their status. that is another product as well. so there's plenty of areas where facebook could expand. that's why management talked about not just the core facebook

app but all these other products that surround that. >> there's been a lot of talk when it comes to controlling content on facebook live. we've seen some sad and shocking stories there. now facebook is announcing that they're employing 3,000 people to combat violent videos. can that be controlled by humans? >> one question is -- there was a haven't episode in thailand, which was horrific. in that case, the video was reported to facebook, but wasn't taken down for about 24 hours. that's the issue. does increasing headcount necessarily mean faster action? that's a question we have to see. the other thing is facebook needs to and is investing in technology, machine learning and artificial intelligence technology that can recognize a video or photo and whether that is violent or inappropriate content. thoselgorithms have yet tbe proven. >> we've seen a similar story unfolding at youtube when ads were placed next to extremist content. we saw some advertisers pulled

back and heavily criticized google, parent of youtube on the back of that. do we see a similar backlash at facebook? do you think more and more advertisers will think twice about allocating ad spend? >> i think so far there's initial pullback. what happened with youtube was really a lot of media noise as well if we look at alphabet's numbers, youtube was growing strongly and contributing significant amounts to advertising revenue. same with facebook, cheryl sanberg said this has not affected the company's revenue. i think it's more noise at moment than actual action from advertisers. >> arjun, thank you very much. let's check the u.s. futures. we're still a couple hours away from the start of the u.s. trading session. the s&p 500, dow jones, nasdaq seen modestly higher. s&p 500 seen up by 3 points. dow jones could add 31 points. nasdaq seen up by 2 points, this after a mixed close yesterday. the dow up 8 points, but the

nasdaq and s&p 500 fractionally lower on the day. financials did well on the back of the fed decision. european markets are showing a lot of green. we're seeing the ftse 100 here in the uk up by roughly a third of a percent. another record high for the dax in germany and you have the cac 40 at the highest level in nine years. for viers in the united states, "worldwide exchange" is up next. for international viewers, we'll be back after the break with the co of alstom.

time's up, insufficient we're on prenatal care.es. and administrative paperwork... your days of drowning people are numbered. same goes for you, budget overruns. and rising costs, wipe that smile off your face. we're coming for you, too. for those who won't rest until the world is healthier, neither will we. optum. how well gets done.

but we've got the get tdigital tools to help. now with xfinity's my account, you can figure things out easily, so you won't even have to call us. change your wifi password to something yocan actually remember, instantly. d that premium channel, and watch the show everyone's talking about, tonight. and the bill you need to pay? do it in seconds. because we should fit into your life, not the other way around. go to xfinity.com/myaccount

good morning. facebook under pressure. the social network turns in a blockbuster quarter but growth concerns weigh on shares. washington watch. republicans say they have the votes to pass an obamacare replacement. and tim cook on the record. apple's chief unveils a major manufacturing push in a cnbc exclusive interview with jim cramer. it's thursday, may 4, 2017. "worldwide exchange" begins now. ♪ good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen. i'm wilfred frost. good morning to you from me a