welcome to "street signs." i'm joumanna bercetche these are your headlines facebook gains $17 billion in market cap as mark zuckerberg apologizes to congress but dodges commitment to stricter regulation >> i'm not the person who thinks all regulation is bad. we need to have a full conversation about what is the right regulation. european stocks follow asian shares lower failing to build on

the strong session in the u.s. and a tale of two retailers. tesco shares jump, but asos slides as the online fashion store underwhelms investors with its first half sales still on the line, toich dee telekom shares rise after trying to merge sprint and t-mobile happy wednesday. we have a lot to get through markets are still grappling with the fallout or the results of the facebook testimony last night as well as various geopolitical tension that has been weighing on european markets. the markets are pointing to a weak start the stoxx 600 is down 0.3%

let's switch to individual bourses. xetra dax is leading the down trade. it's the one with the highest beta to the broad index. down 0.3%. we had some earnings come out. ftse 100 down 0.2% we will get uk trade numbers and industrial production and manufacturing numbers. big day as far as uk data is concerned. switching to sectors, see where the leadership is coming from. we spoke about deutsche telekom. that is boosting the telecom sector, up almost 1% in trading as talks of a potential deal between sprint and t-mobile are back in the forefront. we had earnings out of tesco and asos earlier we will talk about that later on in the show. food and beverages are the

underperformer today down 0. % healthcare down 0.7% >> i want to talk about what's happening in asian markets as well the underperformer was the nikkei down 0.5% this is the first down day in a while as far as the nikkei is concerned. it was pulled down lower by disappointing retail stocks. you can see the picture for china is more positive hang seng and shanghai both up more than half a percent that's as the market die guesge president xi's speech yesterday as saying more reforms in the chinese economy and opening up to the rest of the world now, let's get to u.s. markets, see how things closed up there the market did react very well to mark zuckerberg's testimony at facebook. the tech complex up 2%

the nasdaq up 140 points s&p and dow jones also had good days this is the fifth strong session in the last six. one of the top stories is that facebook ceo mark zuckerberg has apologized for a lack of data protection on the platform during the first of two rounds of questioning, mark zuckerberg did not back specific regulatory changes to facebook. facebook shares rose during the hearing posting their biggest daily dane in almost two years the move added about $17 billio back to facebook's market cap after suffering heavy losses arjun joins us with more on mark zuckerberg's testimony >> i want to recap some of the key points here from the testimony. we had zuckerberg speaking to lawmakers. he took questions from the

senators lindsey graham pushed zuckerberg on how facebook regulates itself >> what do we tell our constituents given what's happened here why we should let you self-regulate? what would you tell people in south carolina, given all the things we just discovered here, it's a good idea for us to rely upon you to regulate your own business practices >> well, senator, my position is that there should be no regulation >> you will embrace regulation >> the question is as the internet becomes more important in people's lives is what is the right regulation, not whether there should be or not >> you, as a company, welcome regulation if it's the right regulation, yes. >> do you think the europeans have it right? >> they get things right >> have you submitted -- [ laughter ] >> that's true so would you work with us in terms of what regulations you think are necessary in your industry

>> absolutely. >> okay. would you submit to us proposed regulations? >> yes, and the team will follow up with you so we can have this discussion across different categories where i think this discussion needs to happen. >> i look forward to it. >> lawmakers also asked zuckerberg about how facebook shares its data with advertisers. >> we don't sell any data to anyone we allow people to bring in apps with them. that makes sense that's basic data portability. you own the data, you should be able to take it from one app to another if you would like. >> senators asked zuckerberg if data obtained by cambridge analytica could be stored in russia this was his response. >> i don't have any specific knowledge that would suggest that

but one of the steps that we need to take now is go to a full audit of all of cambridge analytica's systems to understand what they are doing, whether they still have any data, to make sure they remove the data, if not, we take legal action against them to do so that audit we have temporarily ceded that in order to let the u.k. government complete their government investigation first, because, of course, the government investigation takes precedence over a company doing that, but we are committed to completing this full audit and getting to the bottom of what's going on here so we can have more answers to this >> zuckerberg faces another round of questioning from the house energy and commerce committee later today. we crunched the text of his prepared statement to look at the key thooemes of his testimo. people and information loom largest as he spent alarge ti t apologizing and promising to do better russian elections and fake pop up a lot because he's addressing criticism that fake news on the

platform led to the manipulation of elections >> some senators were unconvinced by zuckerberg's kamala harris said zuckerberg's testimony left her concerned about how much facebook values trust and transparency, by overall the market has acted well, arjun. facebook had its best day in months investors seem to think he handled the situation quite well he said we apologize we apologize for the breach. we hope it doesn't happen again in the future. do you think the market, as far as the market is concerned, we turned over a new page >> we've seen a few things from the testimony. there were a lot of questions about mark zuckerberg's leadership when the scandal broke. that was a huge deal they said he didn't come out fast enough to take

responsibility for what happened i think they saw with this testimony, he could be a leader, lead this company even though there were those questions the other point is what kind of noises do we hear over regulation from sol me of these lawmakers. does it give us indication of how tight regulation could be down the line? zuckerberg said we are open to regulation, but we don't want to be too strict. we want to be notified of data breaches within 72 hours none of that will fundamentally change the business model of facebook some investors were not concerned that there would be huge implications on the business as a whole going forward. those were two key points for me >> also they picked up on something that you have been talking about yourself, europe has actually been ahead of the u.s. when it has come to data privacy regulation we have gdpr coming into play in

may. even zuckerberg said europeans get things right, much to everyone else's chuckling going on he gets it he understands there needs to be more regulation, i guess the question is why did this not happen sooner? why were they able to thrive without people investigating properly why did we have to have a cambridge analytica scandal break? >> we look at the social media companies, we feel like they've been around forever, but they haven't. they're still relatively young companies in the context of many companies on the market at the moment much of how data is being used is still very new. actually the advances in how data is being used is moving so quickly, even how it's being used into machine learning, artificial intelligence, how google can look at a photo and say this is what we're doing i think regulators are always

behind that movement there is always that fine line do we want to regulate from the start and potentially hamper innovation and movement in the space or let it go and deal with it after i think they have gone too far to the latter option >> it feels like there's a couple things facebook need to get through. for now it looks like the market is giving them the benefit of the doubt. this was the only massive data breach that happened if another one happens, then it becomes a big problem. you probably then see advertisers pull out the second thing is earnings are coming up. what should we be looking for on the earnings day in terms of how to gauge where the direction of travel is from here? >> huge focus will be on the monthly average user figure and the daily average user figure and the ratio between how many daily average user there's are that's been stagnant over the past couple of years if we see that drop, that can be a problem because it suggests users are not coming back to the

platform after this happens. we have to see if there's revenue hits it doesn't look like that's the case for me, looking at those reports, those are two key sections to look at. >> absolutely. so far people are giving it the benefit of the doubt arjun, thank you. a photojournalist at the hearing captured a picture of zuckerberg's notes for a look at the pages and analysis of their content, head online to cnbc.com tune in to zuckerberg's second round of testimony later today. that's at 16:00 cet. in corporate news, asos opened lower after reporting a 27% increase in first half retail sales, slightly missing expectations pre-tax profits came in below estimates. the online retailer expects similar growth in the second part of the year asos says it wants to invest

more in logistics and distribution. tesco is trading at the top of the stoxx 600 after reporting a 28% rise in full-year profit beating expectations the supermarket group which last month completed the acquisition of booker, was helped by a strong year in britain tesco says it is firmly on track to deliver on medium term targets. i'm happy to say stacey widlitz joining me on the show great to see you >> great to see you. >> we had a mixed bag of earnings let's start with tesco the numbers have been quite strong and they did acquire booker it seems the integration has been going on. it's still early days. how do you see that acquisition from gresi i progressing in the future? >> it's a tale of two retailers today. the old school retailer today is winning. tesco reported comps up 2%

margins are up 3%. their goal, they talked about 3.5% to 4% they're paying down get. they're getting their house in order after the 2014 accounting scandal. and they made this acquisition in booker. now you got the biggest retailer and the biggest wholesale distributor combining forces, and that gives tesco a lot of control if the market. >> of course they are still met with a lot of competition from the likes of heavy discount players like lidl and aldi how are tesco able to pare up to that >> that's the biggest challenge in the sector, aldi and lidl went to 11% to 12% market share in a matter of years, tesco eluded to the fact they're looking at a discount concept today. they declined to expand upon that, but they have to be aggressive with pricing. >> can you so their target is on keeping up the margins, how can they target

margins and be competitive with the likes of these discount retailers like lidl and aldi >> that's the question we had inflation that hech ehele comp in the market to keep that 28% market share they have to be aggressive on pricing. again, it's a cost-cutting issue. also it's having this wholesaler, this vertical integration that will help them with the input of their costs. >> what's interesting is broadly speaking the general retail industry in the uk and we were both talking about this a couple days ago, there's research that suggests out of all of the sorts in the market, 30% have been in retail space it's an area that investors are skeptical about because of the heavy competition, because of the heavy rents, because of the business rates because of the advent of e-commerce so the likes of the traditional brick-and-mortar companies, they're struggling to compete.

then you have an e-commerce company like asos that is essentially struggling now what's the story there >> you look at these pure play companies, the multiples are so high and so out of control that it's priced for perfection when you have asos come out and slightly miss expectations and using that red alert word, which is investment cycle, invest. phase, which the street does not love, the stock certainly trades off here because everybody is worried about the competition is coming into the market what will they do to build that mote around them >> then you look at the likes of competition. what is it about asos that is making them stand out from the competition given the hurdles to entry seem to be quite low, there are plenty of other e-commerce sites coming up >> i think what asos does well they have that private label business they're able to take the best of the best of what's branded out there and make it for themselves

at a higher gross margin and certainly able to curate better than anyone in the market. now they're looking at investment cycles, and investors are getting nervous saying what does the bottom line look like >> the stock is down 8% today would you use that as a buying opportunity? >> i believe in the story but you need to watch out what they're telling you about the spending numbers >> stacey widlitz, thank you for joining the show today >> thank you elsewhere in corporate news, remy is trading lower after jpmorgan downgraded the stock. coming up on the show, christine lagarde argues against trade tariffs saying they do not tackle trade imbalances. more from the imf managing

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growth in chinese consumer and factory prices slowed in march. it was the slowest gain in 17 months for the cpi the cpi fell back to 2% as the boost from lunar new year spending faded china's central bank said it is working on measures to allow greater access for foreign investors to the country's markets. it said it would open access to its trusts, financial leasing by the end of 2018. a trading link between the shanghai stock exchange and the london stock exchange has also been announced the new pobc governor addressed the trade tensions said he would not devalue the yuan as a way to retaliate against tariffs. chinese president xi held a number of meetings it included a bilateral talk

with christine lagarde the meeting came after a pledge from the chinese president to lower tariffs on certain goods in a speech christine lagarde warned about rising risks, specifically the threat of a trade war. she singled out president trump's tariffs. >> unfair trade practices have little impact on a country's overall trade deficit with the rest of the world. that's what matters. that imbalance is driven by the fact that global -- that imbalance versus the rest of the world, that imbalance is driven by the fact that a country spends more than its income. the best way to address these macro economic imbalances, it's not to impose tariffs or raise barriers, but to use policies that affect the economy as a

whole such as fiscal tools or structural reforms toideutsche telekom is trad higher after renewed merger talks with sprint. sprint is owned by softbank. makiko utsuda has more from the nikkei >> it's the third time that merger talks have surfaced the last ending just five months earlier. while its carriers are racing to start next generation 5g services by 2019 and reports say both firms are hoping to shart financial burden of investing in those networks should the merger happen, the combined firm would have about 130 million subscribers, bringing it closer to verizon and at&t, the top two in the industry both firms stock surged following a report from the "wall street journal" on tuesday. today sprint's parent company, softbank shares were up.

the first round of talks in 2014 ended after u.s. regulators objected to the merger citing antitrust concerns the last talks in november tell through since the two owners, softbank and deutsche thelecom could not agree. it's unclear if something new will be brought to the table this time. that's all from the nikkei back to you. >> thank you very much for that, makiko utsuda. the stocks are reacting very well this morning. in japan, government approval has been won to offer mobile services as the e-commerce area moves into new areas. makiko utsuda asked questions about the changing business. >> the business model is evolving we had been the front-runner of creating a new business model when we got into the financial

services, people said this guy is crazy this company is crazy. now it's one of the most profitable businesses for us other people following us. traditional investors invest on the old framework but we are creating new business models, new ecosystem. i think it will take time for them to digest but we have a proven record. so i'm super confident our business will be very good and our mobile business is going to be very, very profitable. >> in addition to mobile services, since the beginning of the year, you announced a partnership with walmart for grocery delivery services, you also announced you will be launching a coin, rakuten coin when i look at these headlines,

what is the grander vision how does this all connect? >> it's all about ecosystem, if you think about what tencent is doing in china they're going everywhere every consumer facing services sometimes through their own services, sometimes through partnerships we have been trying to provide all the services through our group companies. now we are a partnership with walmart. we will start announcing more partnerships it's about ecosystem our customer costs for each service, including mobile, general insurance, life insurance, credit card, we are

the lowest the older businesses perform extremely well >> elsewhere, european commission investigators have raided a number of companies involved with sports broadcasting rights looking into possible cartel. a unit of 21 1st century fox w raided and the fox group said they are cooperating coming up, the build of geopolitical risk starts to impact russia as the ruble tumbles to follow the russian market asset selloff we'll discuss afr tethe break. big hype. big price. big deal. olay regenerist hydrates skin better than creams costing over $100, $200, and even $400. for skin that looks younger than it should. fact check this ad in good housekeeping. olay regenerist.

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welcome to "street signs." i'm joumanna bercetche these are your headlines facebook gains $17 billion in market cap as mark zuckerberg apologizes to congress but dodges commitment to stricter regulation >> i'm not the person who thinks all regulation is bad. i think the internet is becoming increasingly important in peoples lives, and i think

we need to have a full conversation about what is the right regulation. european stocks follow asian shares lower failing to build on the strong session in the u.s. and a tale of two retailers. tesco shares jump, but asos slides as the online fashion store underwhelms investors with its first half sales still on the line, deutsche telekom shares rise after trying to merge sprint and t-mobile >> we have data out of the uk with respect to industrial production and manufacturing output the factory output has dropped in february for the first time in nearly a year let me pull up those numbers

we have got the february manufacturing output minus 0 0.2 %, plus 2.5% on year that's slightly below expectations sterling is dropping a little bit after these disappointing numbers and after the manufacturing data has fallen unexpectedly that is on the back of -- well, most of the numbers that have come out of the uk for march have been disappointing. and a lot of that is on the back of the weather impact. the beast from the east, as it is called. that's putting a dent to uk data we're seeing that transpire as well this morning. let's look at other markets. we were talking about some weakness in nikkei overnight we're seeing that in european markets. ftse 100 down 0.2% xetra dax is leading the down

trade today, down 0.4% at this point. cac 40 also struggling this is just giveback from some of these stronger performances we had a strong day in european equities yesterday with almost all of the indices up 1% today paring back some of those gains. let's switch to foreign exchange a theme of dollar weakness euro/dollar a tad higher up at 1.2365 of course that currency pair, dollar/yen back with the correct correlation with the nikkei. nikkei had a weaker session overnight. you're seeing that dollar/yen a pointing to further yen strength cable hanging in around 1.42 we did just have the weaker manufacturing data dollar swiss around 0.9588 in the u.s. we had a strong rebound session in yesterday's

trading, led by the tech complex. today it looks like the picture will be different. dow is seen opening up about 120 pointslower. s&p opening up about 20 points lower. in line with what we've seen in asian time and european session. u.s. markets looking to open softer all eyes in the u.s. will be on that yshg cpi number. it's expected to go up 2.4%. a stronger number than that could spook the market let's look at the energy complex. we did see somewhat of a bid for energy and oilemerge in the session yesterday. this after rising geopolitical tension. the u.n. security council could not agree on a unified response to suspected chemical attack in syria during a meeting yesterday. washington and moscow failed to pass resolutions aimed at

investigating saturday's incident which left dozens dead. russian veto the american text, while two russian drafted resolutions failed to gather enough votes nikki haley and her russian counterpart dlashed daught clase meeting. haley argued about the independence of the russian proposal >> our proposal condemns the attack it demands e humanitarian access for the people in doumadouma, it create bare minimum that the council can do to respond to the attack. i want to say a brief word about russia's resolution, which is also before us for a vote. our resolutions are similar, but

there are important differences. the key point is our resolution guarantees that any investigations will truly be independent. >> translator: in actual fact the authors are being driven by completely different prioritiesment they hope very much the decision will not pass. this is what they want this is the fact that they will put in genitally in order to justify the use of force against syria. >> the u.s., britain an france discussed the possibility of military action in syria in a series of phone calls yesterday. the french president, emanuel macron, said a decision would be made in the coming days. downing street said it would work closely with allies to make sure those responsibility are held to account. and europe's air traffic control agency warned airlines operating in the eastern mediterranean to be on alert for possible air strikes in the next 72 hours they cautioned of intermittent disruption to radio and

navigation equipment. russian authorities vowed to minimize the impact from u.s. sanctions. friday's decision to stop sanctions on some of russia's biggest names sent shockwaves throughout moscow's market the ruble hit its weakest level against the dollar since 2016, while rusal shares head over 50% in one week. joining us to discuss is dean tyler. i was reading a bit about you. i saw that you worked over there when the crimea sanctions hit. would you say this round of sanctions is more onerous as far as markets are concerned >> it's still early days the difference with these sanctions is that we had specific target as far as individuals who own companies

that have bonds outstanding. rusal as you mentioned was a big target here in the sanctions on friday we have a situation now where rusal bonds can't technically be traded though the sanctions are trying to force u.s. sellers to divest from companies like rusal. that's difficult now a lot of the information systems that asset managers use to process trades are owned by u.s. companies. so they are almost frozen the ability to sell those bonds. this is something that happens when sanctions are announced things get technical it takes a few days for the system to unclog and for people to move bonds and move on from sanctions. >> would you say it's scarier at least as far as the market is concerned and liquidity is concerned versus the crimea sanctions? just trying to get context

>> with the crimean sanctions, what we saw there -- and i fear we'll see it again -- we'll see the people throwing the baby out with the bathwater as well though sanctions targeted particular individual companies, when clients get scared, investors will sell anything they can certainly we've seen inquiries mainly on the bid side people looking to -- sorry, on the offerer side, looking to sell bonds the only buyers for these bonds were the russian locals back then what will happen here again, i think, if sanctions are ramped up on the back of the potential outcome on what's happening in syria now, we'll see continued pressure on international clips to sell. and the distressed prices. and back in the crimean sanctions situation, the actual beneficiaries of this werebuyer

distressed prices. >> it is also contagious it started off with an em credit phenomenon now an impact on the local markets as well. because of what we've seen in the reval of the currency. do you get the sense that at least before this positioning was quite heavy, i think many people as far as i understand wanted to be long these local currency bonds because they benefit from two things, the potential for the central bank of russia to cut rates, and then the currency holding in. the oil complex has been beneficial as well it's positioning very heavy in russia right now >> that's correct. the last central bank estimates were around a third of the entire local currency bond market i would say a good proportion of

the investor base is unhedged, as far as currency is concerned. we've seen the dollar ruble move from 1.57 to -- 57 to 60s. that's affected the demand and we've seen ten-year yield move we will continue to see pressure on that market i can see the ruble continuing to weaken from here. m ms. nabula has said she can see the ruble weakening from here. any pressure such as this pushing the oil price up so it's receiving more dollars per barrel, and therefore more

rubles per barrel, which means its bukt dget is far more protected. it's difficult to heavily damage russia with this type of sanction >> so eventually you think this will present a good buying opportunity? >> i think so the local players made good profits last time around i would be buying right now? no there's far too much noise and the syria situation needs to play out >> and the lack of liquidity in these current times. >> definitely. >> dean tyler, thank you russia says that a secret resettlement of a former spy and his daughter will be seen as an abduction. it follows a sunday times report that they could be relocated and receive new identities they were found collapsed in salisbury after being poisoned

by a toxic nerve agent. saudi aramco has strug deck deals with a number of french companies adding up to $12 billion. the dealmaking comes alongside the saudi crown prince's visit to france. weapons deals with saudi arabia have been politically controversial in france, but president macron defended business relationships with the kingdom. coming up, a key measure of u.s. innatiflation comes in hot than expected. we explain what that could mean when we come back. ♪ most people come to la with big dreams. ♪ we came with big appetites. with expedia, you could book a flight, hotel, car, and activity all in one place. ♪

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welcome back to "street signs. u.s. producer prices beat expectations in march with a 0.3% rise. rising healthcare and food costs drove the figures as inflationary pressures continued to build up. the march picks saw the year-on-year ppi figure rise 3% ahead of the forecast. it marks the start of a busy week for u.s. economic numbers today the u.s. will release cpi

numbers, which is expected to show monthly gains moderating, while the annual rate jumps. i want to break down these numbers. the expectation is the headline cpi would be at 0%, but the overall near-on-year number upticks to 2.4%, the highest level in about a year or so. as you recall, the last time we had a surprise beat on inflation and wage numbers we did have that big route in fixed income so the markets want to watch out for this before we look at what markets did, let's switch and look at core cpi this one again, the forecast is an uptick up to 2.1% and actually interesting stat here is that the consensus forecast has been at 0.2% for the last 24 months forecast consensus has not changed despite the fact that unemployment is at multi-year

lows we're not seeing that inflationary impact pick up. going forward perhaps that is something that we should keep an eye on we could see potential drags to the downside from agra prices, lodging, motor vehicles as some of the post-hurricane subsides, but also energy costs could be higher, resulting higher air costs. the headline number could uptick to 2.4%. the ten-year note has been hanging in around the 2.80 level for a while now. 2.75, 2.8 5, it's been range bound. of course if we do get that surprise, anything north of 2.4% could send yields spiraling higher again, 2.8, 2.90. all eyes will be on this

all-important data print a look at the u.s. dollar. the u.s. dollar is not as exciting it has been range-bound, but for a longer period of time the gre greenback has traded in this tight 89 to 91 range it has not had a lot of direction. sitting around the middle. if we get a surprise number to the upside, that could have an impact on fed expectations which could help give the dollar a boost versus developed market currencies we also today will get the fomc meeting minutes from march in march they did hike but they released updated projections here the fed looks at the pce, had is a reflection of a business survey as opposed to the consumer survey which is cpi. the wedge between the pce number and the cpi is usually 50 basis

points what caught the markets attention last time is the core pce inflation number forecast for 2018 was 1.9%. 2019 was 2.1%. that's slightly above forecast or above the fed's target of 2%. this raised questions as to whether or not the fed are looking closely enough at this inflation data if we start getting more and more surprises on cpi, if we get that 2.5% number today, that implies a 2% pce already could have implications could have the dots and the number of hikes it is important when you look at it on a year-on-year basis the fed are eyeing that closely as well. i'm happy to say that joining me on the line is kevin kelly, ceo of benchmark i've given the whole background on what to expect out of the cpi today.

my question to you is is how closely do you think the fed are monitoring these singular data prints, given how much emphases the market has on inflation these days >> if you go back to the last recession, you can see the core pce, the preferred indicator has averaged 1.5 that is significantly lower than what they want around 2. when you break it down into goods and services, you see the inflation is on the services side it's coming in at 2.2%, with goods at 0.3 we are a services economy over here in the united states. so if the federal reserve starts to see services inflation tick up even further, they'll have to raise rates faster that's why out of the last march meeting you saw a dot plot indicating one member away from raising four times this year than just the indicated three

times. as services go up, inflation goes up. they have to look at tariffs, if tariffs impact the cost of goods coming in, that will significantly spike inflation. >> you pointed out goods inflation is still running low if these tar writ iffs gets imp that could be another impetus. to come back to what you're saying about the fed dots and they were close going to four dots for this year, how do you think the market would react if at the next meeting they do forecast these four dots forecast how do you think the equities markets would take it? >> you know, i think the equit markets would actually want to see where the current volatility level is and i think one of the reasons

being is you've seen a bifurcation between expectations in the equity markets and in the bond markets as we start going through the rest of the year and where earnings are at, i think guidance will move the market higher just given the fact that we've seen a spike to 3% on the ten-year, and here we are, you eluded to it earlier, we've been range bound between 2.7 5 aand 2.82.8 and you would think it would be higher given that the fed is hiking at a faster rate. i think earnings will move the market and guidance from management as opposed to what we see out of the dot plots and guidance from the federal reserve. >> if that's the case, how come equities sold off so much when we got this fixed income selloff at the beginning of the year was it the size and timing of the move or the fact that people

were not accustomed to fixed income yields ever moving higher >> i actually think it has to do more with -- it has to do with market structure if you think about the leadership of the markets, it was financials and technology. those got hit hard everybody headed for the exit. there was a lot of momentum. everybody didn't know how to adjust to the new market regime of a higher volatility market. that's what was telling. it was a flight to quality and safety they found that in the ten-year treasury they saw the curve was wider than anticipated, which was good which is leading it a healthier market, but that's flattened since volatility ticked up >> you said one of the best hedges in a high inflation environment is to own real estate i find that surprising given how

poorly the reit sector has done this year, and when interest rates are going up why own real estate >> i know, it's such a conundrum for the market to digest given the fact that 69% of the time in high inflation environments, reits have actually outperformed gold, the stock market, commodities. and think about this, it's because of the replacement costs of assets. labor has gone up, goods have gone up. so what is happened is actually the reits assets are worth a lot more in that high inflation environment. we've seen the real estate investment trust space trade down over 8% as the ten-year treasury has bottomed around 2.65 on the yield side so basically they're seen as a bond proxy, but in a rising interest rate environment rents matter more, where they can actually pass on the costs of

inflationtenants, the economy is picking up, the space is worth more because of the growing economy. i think the market needs to realize the value not only in the assets, but also in what they offer in inflation hedging. >> i have to leave it there. thank you for bringing us the latest that was kevin kelly let's look at facebook shares. we're looking at the frankfurt version. you can see they're also up 2% as well. let's look at u.s. futures looks like today will be a weaker day but make sure you tune in to zuckerberg's second round of testimony later today at 16:00 cet. i'm joumanna bercetche "worldwide exchange" is coming up you know what's awesome? gig-speed internet.

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it's 5:00 a.m. on the east coast. here's the five big things you need to know number one, day two of facebook before congress. can mark zuckerberg keep shares of his company moving higher or will the house bring tougher questions today than the senate did yesterday? the tug of war on your money continues. futures indicating a lower open after yesterday's big rally. three, global trade in focus. the head of the imf is out with a warning for the world. four, watch oil. inventories on the rise again, even as oil stocks have been great money makers lately. five, shares o