. welcome to "street signs i'm joanna he's are your headlines. european stocks set back from eight-month highs as mining shares fall after bh cut its full year guidance, and they get set to resume operations at a key iron ore mine. european chip maker stocks get a lift after better than expected first quarter earnings are delivered, and telecom and apple strike a surprise selttlement i their wide-ranging legal battle. shares in avb jump as ceo

ulrich stepds down after more than five years at the helm. zbliernlts dutch lender ing approached commerzba commerzbank. well, good morning happy street signs the big news overnight was that of the china gdp coming in slightly higher expectations leading to somewhat of a good session overall for asian equities today the picture in europe is a little bit mixed you can see from the heat map about 50-50 green and red, and overall the stock 600 is tradin weaker in the early hours of trading. down about .1% here the concern is more of the idiosyncratic names and the earnings that have come out and the miners today having one of

the sectors that had been dragging down overall. by switching to individual european markets to see how it's spread out amongst all over different forces, as i mentioned, miners are one of the key sector that is are underperforming today on back of the cycle and impact we had bhp warning about weak results this after we heard from rio tinto. we can see ftse 100 lagging. remember we've got trading around the fat line. 12,100 is the mark for europe you want to watch out for the final inflation print numbers. those are coming out in about an hour's time. headline is expected to come in at 1.4%. core is expected to stay at 0.8% watch out for any surprises there. the italian index have continued do well. they're up about .3% switching to sectors, right at the top we have technology up about .8%. again, we're getting some

positive momentum out of the u.s. session with the nasdaq closing above 8,000 for the first time since october some positive repercussions as well from apple and qualcomm having officially put aside their disputes that is also having a positive impact on the chip makers in europe autos also having a good day up .8% sicyclical sectors in recovery mode i want to point out mcis struggling down more than 1 .2% health care in the u.s. was the worst performing sector in yesterday's session. it is having somewhat of an impact today in europe food and beverages also struggling this morning as well down more than 1%. that is the picture across the board for europe perhaps not as positive as you would expect given the surprisingly stronger than expected gdp forecasts coming out of china overnight i was talking about the miners, and the one we're focused on today is bhp, which has cut its forecast for iron ore output

after a hit in western australia last night by a cyclone. iron orore without put hit 5%. the company also raised its full year production costs amid lower volumes and an uptick in remediation costs. can that is the picture for the miners this morning. for the most part seemed to be trading in the red anglo-american -- bhp, the largest miner in the world, down 2.6% rio tinto, again, we had weak goidance from then yesterday also down 2.9% not so pretty, and it's one of the reasons why the ftse 100 is under performing today let us bring in an expert to chat with me i have pat ruk armstrong, the managing partner and cio great to have you with us. i want to pick up and ask you

about those china gdp. we have overall a higher than expected number. 6.4% versus 6.3% a bit of a rebound in industrial production coming through for march. are you of the view that worry going to see a reflagsary impulse out of china in the second half of the year? >> we're already seeing it the gdp numbers, you have to take with a grain of salt. they can be massaged the fact that you saw consumer retail strength and fixed capital formation being in line with what people would have expected in industrial production very strong all of those numbers are consistent with basically the stimulus that choin has put into the economy. the hard landing we saw in december you can write those off right now. >> is it really the stimulus, though they only just announced the stimulus

i think the amount of credit -- that's where kr we were in the long-term, and it's good for consumer demand. >> it's a trillion dollar question about china that we've been talking about for many years. how much of the rebound in the data do you think can be pointed back to simply the detante in the u.s.-trade china discussions? sf march 1st was supposed to be the day that they were set to go up they didn't go up, so perhaps that provided somewhat of a sentiment boost. >> it basically -- the escalation isn't going to happen anymore, and i think we're getting close to where there is going to be a deal and clawback of some tariffs. it improves confidence it squares consumer spending. things weren't going to get worse. i'm going to break it down in more detail. chooirn's economy did grow faster than expected in the first quarter after a surge in

industrial production. bl bh blou rsh that is the same rate as in the fourth quarter, but higher than the 3.6% forecasted by on reuters other key activity indicators also beat expectations our colleague younis yoon filed this report from beijing >> kwet investors have is china's economy bottoming out, and it appears it is at least stabilizing. china's gdp came in at 6.4% beating expectations and further slowdown industrial output was at its strong nest four and a half years. 8.5% the statistics bureau didn't mention statistics, but it could be seen as a relief that the u.s. and china have been holding back on tariffs. the strength could also be due to seasonal factors since the lunar new year holiday, when factories close, in february the statistics bureau said recent policy steps like local government bond sales are

showing up in the numbers. retail sales came in at 8.7% fixed asset investment was in line at 6.3% a slight pickup from the first two months property investment was generally steady, but construction starts were interesting. they jumped 18.1%. the government has been loosening restrictions on property, which has been encouraging more speculation what does this mean for policy the stimulus could be good for now. pork prices will jump more than 70% year-on-year that's a record high production for the politically sensitive meet fell by 5.2% year-on-year china is trying to chain an outbreak of african swine fever that has been sweeping through the hog population here. pork prices in march push

consumer inflation higher. younis yoon, beijing that was younis yoon breaking down some of the component of the gdp print if up to take a view of the china reflags trade, what's the best way to dpo it >> we own chinese equities right now. the best way to do it is through naspers. we like the tmt stocks you call them in bap in china. if you buy naspars, you get 10 cent at 22 times earnings versus the 32 times earnings. they own 33% of all 10 cent shares that's below the market cap of its earnings in 10 cent shares it has our media companies in there as well.

>> the big cap companies are liquid there's options on them as well. it's not a struggle to get access to the big cap companies. the a shares that if you want to own them direct, it's a little more difficult if you are a retail investor based in europe. >> we were priced for hard landing fears in december. a part of it's a recovery. i think it's probably gone a little too far too fast possibly with the fed getting dovish and chinese stimulus happening at the same time, liquidity drives

assets and its tech companies and chinese stocks are the big beneficiaries. >> we ended the last segment talking about expectations about the trade talks between the u.s. and china. i mean, at this point it looks as though the market is working on the assumption that there will be some form of a deal. as an investor and somebody who has invested in chinese equity markets, this enforcement mechanism that steven mnuchin has referred to, does that give you comfort? >> the enforcement mechanism maybe stops china cheating on it, but it opens a can of worms. any time the u.s. puts an enfor enforcement on china, they retailat, and it's going to be a dual-ended enforcement mechanism.

>> the v-shaped recovery in china and the u.s. >> it's caught me by surprise how fast the recovery was, and i was in the camp that we're not going into recession in december, and i'm even surprised. a quick turnaround was seen in china in particular. you've seen firming in all countries. >> stimulus is still there fed central banks -- >> monetary zwroosh we're still at accommodative levels. people are talking about the need for a fed cut i don't think that happens i actually still think the next move from the fed say hike not this yoer but next year based on acceleration and growth in the second half you have never had an end of cycle where you have had the fed

rates so low and the fiscal deficit so wide in earning many. both things are going to push economic growth and eventually will spur some sort of inflation. >> you know that's a nice segue for me because we're just about to listen to some sound that my colleague did with the goldman sachs ceo. that's patrick armstrong, ceo of -- now, goldman sachs ceo has also expressed optimism. it's not just you, patrick speaking to exclusively to cnbc of the bank's builders and innovators summit, solomon said the fist quarter data looked reassuring >> i actually think china is also chugging along quite well, and i think the trajectory of growth here seems to have picture up a little bit over the course of the last few months. look, china is going to continue to grow. i just a question of, you know, to what degree and over what period of time obviously a huge economic force and very, very important in global growth. there's no question it feels

like there's been an acc acceleration as late i'm watching the data just as you are. >> a bit of an acceleration there. >> later this hour for more from that cnbc clus interview with goldman sachs ceo david solomon. his conversation with -- including why he has changed his view on the chances of a recession. i want to go to some company news we're looking at today in europe a.b.b. ceo ulrich stepping down as head of the swiss engineering firm it's a position he has held since 2013 in a surprise move he agreed with the board to resign and chairman peter has been appointed as an interim ceo. a.b.b. says an official search is underway. the stock is up 5.5% not giving the full clarity of the context here, but remember, back in december a.b.b. did spin off and the results were a little bit mixed since then.

that has been the reaction in a.b.b. this morning. as ever, you can get involved in the conversation tweet me you know, i'm available on twitter at cnbc. you can also spreet e tweet the show talk to us about your views about china gdp or anything, actually also coming up on the show, another bank has reportedly approach commerz bank. more on the top lenders after this break unpredictable crohn's symptoms following you?

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. swiss drug maker roche beat forecasts on the back of strong revenues from new multiple sclerosis and cancer immunotherapy medicines. it sees full year sales growth in the single digit range. you're seeing a bit of an underwhelming reaction down slightly. eriksson has posted first quarter operating profit of 4.the billion swedish krona.

the swedish equipment maker says earnings were mainly driven by strong growth in north america where it sees it continuing this year switching over which has posted a smart rise in first quarter sales beating expectations the french company cited china as a particularly bright spot in the beginning of the year, but flagged difficulty in the u.s. loreal plans to continue demand for mass market labels and says it has been seeing some encouraging results. particularly in europe that stock is down a little bit as willing sticking with frants the french food group has -- the company expects sales and profits to grow in the second half of the year despite a modest rooi rise of 0.8% compared to 2.4% last quarter. danone blamed a boycott in

morocco for the slowdown as it kept its 2019 financial goals. one of the names that's dragging down the food about and beverage segment today. moving over to banks, commerzbank has reportedly been approached by dutch lender ing away a merger offer. before it began official deal talks with domestic rival deutsche bank. all tree banks have delined to comment. annetta joins ous the line what's interesting about this story is apparently the talks between ing-customers bank took place before commerzbank started talks with deutsche bank what more can you tell us? >> there's exposure to the huge climbs they see in germany for ing it was made a greater

leverage on the german market. they already acquired large here and germany they have more than 9 billion customers. very active in mortgage lending. commerzbank would actually mean to really have the opportunity to learn from someone from ing how digitalized the business in a very efficient way they're looking at the cost income rate, and you look at how many people ing is employing for the same amount of revenues that they are generating. that tells us an awful -- it's a different story in a way, but i think ing and also uni credit it as a po tesh takeover parties are so far away.

if that fails, probably commerzbank would go into the hands of one of those who have expressed interest as of now, i'm hearing that the talks are going quite well they shouldn't expect anything to happen this week. also, not over east, given the religious, yeah, sort of the religious character of the easter break next week we will be an interesting part of the week for the merger stauks talks. either they go ahead or stay between deutsche bank and commerzbank. commerzbank skoer in an internal plel has admitted somewhat that the loan basis for commerzbank is not the right way that's probably why we also get all these expressed interests from various parties now in case deutsche bank or commerzbank

merger is going to fail. that's back to you >> so many moving parts here we look forward to finally getting some clarity hopefully about the future of commerzbank, deutsche hopefully in the next couple of weeks. patrick armstrong with jechlt e investment managers. you told me he hold ing stock. it's interesting what annetta is was just saying and they've made some good strides. potentially it'sated good partner for commerzbank here how do you think about it? >> be a great partner. it's whether ing will be interested in commerzbank. you and you would have to get concessions that have massive job cuts that's the only way that they're going to be attract i as a takeover candidate whether the german government allow that is. i think the model might even turn into good bank-bad bank or companies that know they have to be sold. create two different banks they sell assets to other banks, and some offer government structure where there's some support for the bad banks.

>> do you see that happening how do you see that story playing outs >> the only way that makes sense is massive job cuts. whether the german government wants to -- i think the government would like to put them together to get rid of some risks, but i don't think they want the job loss that is will come with it these banks, too many employees. if you look at american banks, if you look at the european banks, much more revenue >> ertainly, the cost-income ratio is go that european financial advisory really struggled with i speak to the ceos every earning season the same thing what do you doing about your operating expenses the macroisn't helpful either. i mean, how are you picking your winners in this thing? >> coming into the year we said ing and dnp is what we want. the thesis was they are trading at seven times earnings. trading at 50% tangible book value. 7% digital deals we started last yeek e week. it went up 25% year-to-date.

i don't know the model that it's going to go, but that will be the cat lits >> it's just the plaster of a gigantic wubd. it doesn't solve fundamental issues to your point about dividend yields do you like it when the banks are saying we're going to do a larger share buybacks >> to me they're essentially the same thing i've invested in bnp and ing he with think the def dends are sustainable. 12% tier one capital ratio

we'll leave it there thank you dpor breaking down your view on european financials name by name there patrick armstrong, managing partner. japan holds its first trade deficit in over three years. we'll be right back. ♪ ♪ ♪ applebee's bigger, bolder

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>> shards jump in a. about b. as -- steps down after five years. commerzbank shares rise amid reports dutch lender ing approached the bank about a cross-border merger before the german lender started official deal talks with domestic rival deutsche bank. in an exclusive interview with cnbc, goldman sachs ceo david solomon says the u.s. economy is chugging along pretty well and reveals he has changed his view on the chances of a recession. >> i kind of said 50-50, but, youen, my guess is probably not. i think the chance of a recession is low, and i don't see any data in any way, shape, or form that leads me to believe that that chabs is accelerating. we're just getting data out

of the u.k., and let's break it down for you because we are seeing a bit of a reaction in the pound here core cpi has come in at 1.8% year-on-year this is versus expectations of 1.9% year-on-year. coming a little weaker on the core metric. when we were looking at the overall number it's come in as -- the rpi number has come in at 2.4% year-on-year the coal was 2.6% year-on-year this is the lowest annual rate since november 2016. just in terms of the core number for rpi, the rpix has also come in at 2.4% year-on-year. in terms of the breakdown between goods and services woor seeing goods innation of 1.3%.

sterling dropped a little bit. i should mention, though, that in terms of political developments, of course, it has been a little quieter. we're all getting a bit of a brexit relief this week with mps out on easter holidays we've been going back to data watching so far the pound has been pretty steady between, say, 130, 131 over the last couple of sessions also, what's interesting about these numbers is yesterday we the higher wage inflation numbers. the average hours bonuses came at 3.4%. now with the inflation about 2.4% of course, we're looking at positive real wages. that is a good thing for the u.k. consumer. all right. let's switch on and talk about the picture overall for european markets. as i mentioned, overnight asian markets were trading up in the green on back of a better than expected china gdp first quarter. come in at 6.4%.

the picture is mixed in europe it's not really playing out as far as these markets are concerned. ftse 100 is the laggard. here it's not data driving it's more to do with earnings. we've had weak guidance out of bhp this morning largest miner in the world it follows on the weakness out of rio tinto they're dragging down the ftse 100. they're down 2% to 3% there. the dax is trading around the flat line. ftse mib giving back some of the earlier gains. now up 30 points or so that is a picture across urope not as strong as some of the asian momentum switching to currencies, though, we were just looking at the pound, and i was really pointing out it's been pretty stable trading very tight range with brexit developments on hold for the time being slightly weaker than expected inflation numbers. 130.50 is the mark we've also got the euro trading a little firmer versus the dollar this morning. up .3%

113.14 is where we're trading at now. don't forget, we also get the final european inflation print that is coming up in half an hour's time too. really have dollar yen not much action overnight. 112 the handle there despite some of the data that we had reporting. japan now reporting a trade deficit for the first time in three years. shamg high is where all the attention is focused on, though. we are seeing a little bit of strength there .3%. gdp was where the focus was at a bit of a rebound in march when it comes to industrial production data as well as retail sales and fixed asset investments where, that is driving some of the gains. i should point out, though, that shanghai composite is up 30% s&p in the u.s. is up about 15%.

really strong start to the year across the board for these asian markets. speaking of asian markets, u.s. negotiators raise concerns about the sizable japanese trade gap as the first round of new bilateral talks concluded in washington d.c the two sides discuss narrowing their focus. the goods, including agriculture. well, jpan's lead negotiator confirmed they would meet again next week after close frank discussions. that's as japan's trade balfour fiscal 2018 fell into the red for the first time in three years due to higher energy prices and china's sluggish economy. makiko joins us with more. >> yes according to government figures released today, japan booked a deficit of 14.2 billion dollars in the year through march. exports rose 1.9% from ae year earlier to 720 billion dollars as deliveries of cars and ships

increased. while imports jumped 7.1% to $730 billion with higher costs of crude oil and liquified natural gas. demand for japanese exports has weakened in recent months with the trade dispute between the u.s. and china, one of japan's biggest trading partners taking its toll for march alone, japanese exports continue to fall for the fourth month in a row. exports to china remain slow falling more than 9% from the previous year. imports of oil and other fuels fell also leading to overall trade staying in the black meanwhile, the tokyo stock market was strong with the nikkei index gaining which is a first in four months toyota motor rose to a year high as investors became optimistic due to chinese data showing steady economic growth and that's all from the nikkei bough. >> excellent wonderful to hear from you let's switch on and talk about what happened in the u.s.

yesterday. netflix shares were lower in extended trade after guideants on second quarter earnings and subscriber growth missed forecasts. the streaming giant posted better than expected first quarter results boosted by an uptick in international subscribers dough spite seeing some customers drop off following price hikes in the u.s., mexico, and brazil the company also waved off concerns over increased competition from apple and dids a disney who are launching their own service. sprint stock has slumped in after hours. the following multiple reports its perj merger with t-mobile is unlikely to be approved in its current form according to the "wall street journal" and reuters, the justice department staff told both carriers it has concerns about the structure of the plan's $26 billion deal. it would combine the third and fourth largest wireless providers in the u.s. raising competition worries. shares in t-mobile also fell in

extended trade following their course steep losses for those two companies there. some good news for qualcomm. shares surge 23% and continued gaining an extended trade after settling a royalty dispute with apple. some of that positivity is spreading into the european chip makers as well just a quick look at how some of the european tech names are fairing this morning asml is beating the pack there well, actually ams is beating the pack up 4.3% generally spiking, a positive start for tech in europe on back of these developments. luckily, i've got a great expert with me. elizabeth schulze joinds me on the desk a bit of a surprise move there obviously, we've been watching this dispute for a couple of months now it's been going on for a long time the announcement came as a bit of a surprise, and obviously a positive one for qualcomm. >> that's right. the stock 23% gain yesterday biggest gain in nearly 20 years in a single day. what this comes down to is this

is the heart of qualcomm's p business patenting chip technology. apple is essentially saying we need qualcomm's technology, and we're going to rely on it going forward. the settlement dismisses all of their worldwide litigation, and this has been a long and brutal battle between these two companies, so it is no small feat this is going to create this partnership going forward >> why were the shares of qualcomm up so much, up 23%, and apple was pretty much flat we don't know what the settlement is, do we >> we don't know the terms of the deal.

snoo where does this put apple in the race for 5g >> apple has been the kind of player that's waiting on the sidelines here as we've seen other companies release 5g smart phones we've seen one from huawei and samsung. apple says we might not see it until 2020 what this is saying is that we expect qualcomm could be the supplier now for those 5g chips in apple smart phones going forward. qualcomm is a leading supplier of 5g technology in chips. it's likely that apple said it needs to rely on that technology in order to release its smartphone to mark.

are. >> even just to keep up. we saw yesterday after the settlement came out -- the timing of that seems likely that that's not entirely -- that's related to, you know, the decision that apple would either use qualcomm or apple realize the intel wouldn't have the chips ready in time and said, okay, we're going to have to rely on qualcomm here. >> leaving no chips on the table. all right. elizabeth, thank you for that. >> thank you >> this is the selling when sports meet finance.

>> tottenham takes on porta. big moves there in the stock prices. >> what would voo thought that finance investors would be so invested in the sport? coming up in the show, results are beginning to trickle in for the indonesian election. we'll cross to jakarta for the latest after the break stay with us (client's voice) remember that degree you got in taxation?

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indonesian president is leading in an unif you feel count of the country's elections. he is running against former general sibianto in a rerun much their contest. let's get out to jakarta and break it down further. marten, i believe the polls have now officially closed for the world's fourth largest democracy. it's surprising they only had eight hours in total to put through all the votes.

>> it was 7:00 a.m. local to 1:00 p.m., which means basically that polling booths closed and voting stopped about a little over 2.5 hours ago you referred to the lead that jakoe has i can update you these numbers coming out from our partners here in indonesia, cnbc indonesia, and the latest numbers we have is that the joko ticket had 54.73%. that is what matters in this country and in these elections there's no electoral college here still, better than the outcome

the final outcome of the 2014 elections. that race was -- he won by the slimmest margin ever in modern indonesian electoral history six percentage points. the numbers have you to remember are 53 and 47, which means based on these latest numbers he has already surpassed that at 54.7 and again fort opposition for the prabowo ticket that's all we know so far. i need to adhere, quick counts, what i'm rescue to, are slightly different from exit polls chrks you may be more used to in the developed world. the reason for that is quick counts are statistically significant samples. taking a real balance, real vote and extrapolated from there for these statistics, these percentages, as posed to exit

polls which send e tend to be just another survey. on the one hand they are transparent the way they're done outside polling booths, what they'll do is they'll stay the sampling of ballots, hold it up to the sun because the way that indonesian's video is to punch a hole in the ticket with a nail, literally, right that's how it's done in the open in public. urts very trands parent. >> marten, thank you very much for breaking it down for us with a lot of things going on in the background i have to say, i got a little nervous at the proximity of that bus to martin when he was breaking down the results. switching on, u.s. banks continue to show their strength during the first quarter earnings season with bank of america and black rock posting stronger than expected results

morgan stanley will start things off when they report later today. meanwhile, goldman sachs ceo david solomon has told cnbc in an exclusive interview that he thinks the u.s. economy saw a sluggish first quarter, but is optimistic going forward he also changed his view on the chances of a u.s. recession. >> the economy is chug along pretty well in the u.s >> yeah, people saying it's good >> i think the u.s. economy is growing at trend at the moment you know, i do think as we came into the end of the year there was some fear that we really were in a place where economic growth was really pivoting into a very, very significant slowdown i do think growth slowed around the world, and i do think the tragedy accountry of growth slowed in the united states as we finished that 2018. it's pretty clear to me that while the first quarter was sluggish, the second quarter is chugging along pretty well, and certainly we're at trend, and i think central banks around the world, including in the u.s., have become much more accommodative here in the new year i think that bodes well for

continuing the expansion >> what about recession talk three months ago in dave yoos, said there was a 50% chance of a recession in the u.s what do you think? >> i think it feels less than that today if you are referring to an interview i did with your colleagues, it was in the middle of january in davos. it was before the fed had pivoted so abruptly. look, i am not a great speculator if you go back and look at that interview, you would say i kind of said 50-50, but my guess is probably not i think the chance of a recession in the near term in the u.s. is low, and i don't see any data in any way, shape, or form that leads me to believe that that chance is accelerating >> you talked about the fed switching over, you know, going from too hawkish to too dovish in a matter of six months. what does it mean for your outlook on rates do you think rates have peaked in the cycle >> well, those were your words,

too hawkish and too dovish i didn't say that. i think the fed definitely became much more accommodative, you know, here in the first quarter. look, you know, our forecast, the firm forecast, our chief u.s. economist has pushed out any forecasts of ran interest rate increase until the back end of 2020. he sees very, very little action from the fed through the rest of 2019 into 2020 he also sees the chance of a rate reduction very low at this point, too our forecast is kind of steady as we go for a period of time here >> okay. president trump tweeted over the weekend that -- and he was talking about the fed. the fed had done its job properly, we would have seen growth of over 4%. do you agree with him? >> i'm not a good speculator on this, that, or the other the reality that i'm living in is that u.s. economic growth is at trend and is doing quite well, and the expansion is

penned e extending i wouldn't speculate as to if this or if that what would have happened, but i think jay powell has done a very good job being the chairman of the federal reserve is not easy. i think he is executing his duty responsibly and appropriately. >> that was the coo of goldman, david solomon. he sounded more positive about the u.s. economy's prospects let's bring in my next guest, patrick spencer, vice chair of equities the at baird. let's talk about the reporting seen so far for some of the banks that have come out including goldman. actually, what is your take-away from what we've seen from the outside, it appears as though the traditional investment banking models are struggling a little bit versus the ones that are, say, a bit more exposed to consumer banking. >> good morning. first of all, we agree with david solomon. we think a slow recession. with regard to the banks, certainly the investment banking

side with the traditional model, as you say, is struggling. if you look at the low volatility, it's hardly surprising they're reporting low numbers in their trading area. we're an investment banker baird wrrks i represent the equities business our business is soft on the equity side. we all struggle under that at the moment i would have thought that's a buy signal for the future because volatility should pip bik pick up. what was more, i think, optimistic for me was that the retail side of the business, ie, the loans, corporate loans, industrial loans, personal loans, were strong, and they were quite bouyant the interest margin has provided that to me proves the u.s. economy remains strong >> i was going to say, isn't that a reflection of the u.s. economy? how do you put the context of people being so negative about the u.s. and the u.s. economy's prospects to the results that have just come out of the banks? the banks are showing a very different picture. >> the banks -- some of the

banks beat the numbers not by a large amount, but there was concerns going into the quarter for all earnings it was going to be lower you know, they were seeing the -- et cetera the outlook was quite weak with regard to the banks, we actually like the banks down here we can discuss that further if you like >> well, i do, but i also want to ask you about just broader markets right now because we're about 1% of all-time highs for u.s. equities, and this is a quarter where we're supposed to be seeing earnings per share contraction from with we were a year ago what is it is it that index investors don't really care about this quarter and they're more focused on coming quarters? why the disparity? >> it's a great question if you include dividends in the s&p, you're at all-time highs. europe is at 7 month highs china subpoena double digits the market is telling you it's looking through this weak patch

telling you that there's actually better results the other side it was the most documented bad quarter in the history of earnings releases and prior to this it was discounted, and i think we had a big knock in the fourth quarter last year. it's recovered nicely. it was well expected and results 80% of companies have beaten on the bottom line. 60% on the top line. they're better than expected the market goes up >> expectations were so low. it's an expectations game, as ever talk about expectations. sp up 15% this year. i mean, where are we going to end up the year? are we looking at 20%, 30%, similar to what we had in china year-to-date where do you see this going? >> i remain bullish, as i have over the last few appearances on the show i think china was an important number to actually print overnight. the interesting thing about china is that not only does it help places like australia, but germany. that's been sort of the problem

sooi child in europe. 50% of gdp is represented by exports. a lot of the exports go to china. >> i love to end the show on an upbeat note. thank you for joining us that was patrick spencer the vice chair of worldwide exchange coming up next. exchange coming up next. stay with cnbc i couldn't catch my breath. it was the last song of the night. it felt like my heart was skipping beats. they said i had afib.

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ing 5:00 a.m. here's your five at 5:00 china growth beats to the up side what it means for markets and trade negotiations that's coming up next. meanwhile, shares of qualcomm, they are soaring after a court settlement with apple. a massive corporate story. we'll dig into those details netflix has a u.s. problem when it comes to growth, but ceo reed hastings isn't looking in the rearview mirror. plus, a potential roadblock for the sprint and t mobile merger those stocks are moving sharply, an