and also, the shanghai composite was expecting 2009 lower and the fact that now the shanghai composite is down almost 20% from the top almost two weeks ago could be a bit of a concern. for if we're just looking at stocks. looking at china, i think recently there's been a a lot of speculation about how large a degree the speculation inside of china in commodities has been playing out a factor in this market. definitely there's been a huge impact on australia and the perspective going forward for us, also, the anticipation for australia and we have some indications that even the western hedge funds have been becoming active as physical speculators inside of china with regard to commodities. and i think that's a bit worrying. because also, the way the stimulus packages have been working is that they really have not been active yesterday. so the big infrastructure projects have not begun yet. so there is been a huge stockpiling of commodities in china recently. >> david, what is the european market's angle on the move we've seen originating from asia? should we expect the european market j

off 4.3% on the shanghai composite. not stepping in to prop up the markets.here is something else. we were talking about bank earnings. with bocom, that would be bank of communications kicking off the earnings season in china. numbers, up about 15.5 billion yuan, pretty much in line with the forecast. tomorrow wealth the big one, icbc, the world's largest lender. the growing concern is that they had the record pace of lending in the first half but that their net interest margins were under a lot of pressure. that's a look at the market asian action. let me toss it over to bertha. >> thanks, chloe. we're taking our cue from asia this morning, as well. futures are pointing to a lower start. we don't have any data today to speak of the oil inventories. those are out at 10:30 a.m. the oil markets are likely to be down because of the strong dollar. taking a look at the ten-year note here, we've got the ten-year yield back below 3.5%. we're at 3.44%. a lot of the economists are probably headed out west with. the fed is headed to the kc fed conference. ben bernanke

the shanghai index is down 20% in two weeks. the main cause of the problem they noted too bank lending has been slowing down. as banks have slowed the lending there's been lois money that's flowed into the stock market. this goes to the big observation that a lot of china's lending efforts have gone to speculate in the stock market. and the other two problems. ipos have come back. they weren't allowed for a whole year, now they're back in july. that's a lot of competition for the stock market. look at the shanghai index. what do you say for an index that goes down 70% in a year, then rallies back 100%, and now is down 20% in two weeks. i call that volatile. tradertalk.cnbc.com. rebecca, how are we looking over at the nasdaq? >> hey, bob, we're looking higher, but just as much as china is the story for stocks there, china has a lot to do with the story of stocks here. as you heard from maria bartiromo at the top of the show-n her conversation with hp's ceo mark hurd, china played a major role in their earnings, and we do see that

fourth largest stock market in the world, shanghai index. >> growing. forget all of the stocks and mum bow jumbo. if the middle class is growing? why do they get on the conviction buy list at goldman sachs. >> they were long already. >> they put in a practice rating on all of the base metals. they have been right all through the process of the commodities run. copper is what they found out with. under $2. they're pushing to $3. they think demand is real. they point to china, india. if there's a demand, a true middle class growing out right now, that's what we're looking for. >> is there an economic barometer for economic activity? it's not the same incident that the u.s. stock market is for the u.s. economy. it's nonanticipatory in any way. >> down 20% in the last three weeks, petra down 20% from july 28 and the local market is down 7%. same thing with sinopex. a lot of the big cap names. that's a disconnect i don't feel comfortable playing. >> something you can't play. >> you've got to prefer to play some of the american plays, whether it's a three-poin

the nikkei 225. up by 1.4%. shanghai stocks had a shaky start to the trading day, but the optimism carries through throughout the session and saw stocks rebounding by 1.8%. hong kong is essentially flat for the day. ross, back to you. >> let's get thoughts on was going on at the moment. joining us is loto. good to see you. we saw the ifo institute business sentiment up for the year high and up for the fifth month in a row. we saw the euro, which gained, but it seems to be a signal is for the stock markets to sell off slightly in germany. are we worried that we're getting ahead of otherwise and that our expectations are perhaps getting too high? >> i don't think our expectations seem to be too high. but let's face it, we've come to a market that seems to be different. all the sentiment at the moment means sometimes we get nervous, that perhaps we did get ahead of ourselves and then retrench. and i think that is what we're seeing at the moment. >> not much of a retrenchment. we were up 20 points and we're now down 19. 4/so

i would say the new shanghai is particularly sharp. i counted before i came up here, the 11th worst day going back to 1999 in shanghai. 5% drop in the market there. if you look at the charts, shanghai was really the market that first stopped going down, back during the october banking crisis. and so i guess people are worried that if shanghai is now turning around very sharply, it cut through the 50-day moving average like butter this morning. maybe that says something about the rest of the markets in the world. >> mark, this is christine. do you think what's happening in shanghai could have more lingering effects here in asia as opposed to what's happening in the u.s., for instance? >> well, if you look at the correlations of various stock markets, the mainland chinese stock markets are not tightly correlated to the rest of the stock markets of asia or the world. but they definitely did lead the others. they particularly led the oil prices, i must say. if you overlay the asia market with oil, you'll see they definitely led oil. you kno

everybody is focusing on the shanghai composite. take a look at today's scores, the overseas investors took the news about possible tighter capital requirements in a different way than the mainland investors. how should you read this and how should investors take these cues? >> hi, choey. this is where i do agree with andreas where he says asia is the strongest economy as we're seeing it now. i also think that the regulators coming out saying we knight need tighter capital requirements, i agree, you can see that in two ways. there's a big article out today that icbc has given so much more loans, i think 19% more than last year. if you look just at icbc, they're putting more money into the economy than all the developed countries altogether. so i think that you will still see china, you will still see more loans being given in asia simply because asia has been able to put more money aside in the last few years and the private individuals in asia have more savings than they have in the u.s. however, as we all know, asia is export drive

on rumblings in the chinese markets, but will more shanghai swoon send the s&p into sell-off mode?o help us with the trade as china, the world's growth engine, begins to show signs of sputtering. back in a moment. ♪e helping people save money on car insurance. gecko: aw thank you, sir. boss: but i think there are a few other things you can say about what a reliable company geico is. gecko: right. uh, well maybe how geico's the third-largest car insurance company in america? nice tidbit there. boss: exactly. and i've been thinking, looking a bit more businesslike might help too. gecko: oh my. uhhh, no it's, what's, what's the word... vogeico. 15 minutes could save you 15 percent or more on car insurance. ♪ >>> was it a deal with the devil? china providing us with cheap goods in exchange for trillions in u.s. treasuries. they get access to our insatiable demand and we get access to their unending supply of electronics, clothes and machinery. now, for better or for worse, the chinese and american economies are linked at the hip. sunday night it was for the worse. as the shanghai sold

take a look at the interday chart for the shanghai composite. lot of concerns about more scrips coming to the market, saying they're going to issue $1 billion more in shares. we're digesting a lot of earnings up. from the oil sector, we have cnooc out yesterday. today we're getting the big, big number out from petrochina, which is the biggest oil and gas producer in asia coming out after the bell and following up. but these stocks are closing lower because nymex light sweet crude did drop below that $71 a barrel. there were expectations in china to increase prices. coming out with first half earnings, they are excited about their mobile division. subscribers rose to $39 billion. with that note, back to mike in the u.s. good morning. >> and thanks, adam. and a pair of key economic reports are out before the opening bell here in the states this morning. the first revision to second quarter gross domestic product will be released at 8:30 new york time. forecast called for a contraction of 1.5% versus the initial estimate of down 1%. still, a vast i

on rumblings in the chinese markets, but will more shanghai swoon send the s&p into sell-off mode? cnbc's amanda drury is here to help us with the trade as china, the world's growth engine, begins to show signs of sputtering. back in a moment. i'm racing cross country in this small sidecar, but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t. introducing the all new chevy equinox. with an epa estimated 32 miles per gallon. and up to 600 miles between fill ups. it's the most fuel efficient crossover on the highway. better than honda cr-v, toyota rav4 and even the ford escape hybrid. the all new chevy equinox. ♪ >>> was it a deal with the devil? china providing us with cheap goods in exchange for tril

the shanghai market and the hang seng, the only market in the red today. there are lots of concerns about the fall in bank lending in the greater china market. in terms of nymex light sweet crude, this is how the picture looks, nymex putting on gains of 63 cents, $73.08 a barrel and brent is tacking on gains, $7 3.04 a barrel. ross. >> that's where we stand with the markets increasing consensus, as well. the u.s. is now probably out of recession. we're likely to prove when we get those third quarter numbers. joining us for more is larry hathaway. joinings now is peter cardillo, as well. the key question, against, is what happens next? there are the bulls who believe this huge stimulus we've had in cheap liquidity will drive a strong recovery to support stock markets and it's the bears, of course, who believe we still have a huge debt overhang and that deaf ledge raejing has a long way to go and that will cause us to have very poor growth. peter, which camp are you in, first of all? >> well, i think we're headed for strong growth over the next few quarters.

the shanghai composite stayed weak. we had news from china merchant's bank, which is the lender, saying it could raise as much as $2.6 billion in a rights issue both involving h-shares as well as a-shares. and it's coming at a time, of course, when lending is being concerned, so there are concerns on when this market can absorb at least the excess supply. now back to mike in the u.s. good morning, mike. >> good morning to you or good afternoon. and thank you very much. here in the states, the consumer is very much in the forefront for investors today. the july cpi is out at 8:30 a.m. new york time. prices are forecast to remain unchanged. the core cpi, which strips out food and energy prices is expected to edge up by 0.1% at 9:15 a july industrial production will be released. forecast to rise 0.6%. the capacity utilization rate is seen rising by half a point to 68.5%. then about 10:00, august consumer sentiment will be out. analysts are looking for a reading of 69. a pair of retailers top alternatings on today's calendar

i think that is helping to bring down further the shanghai index. mergeling markets and these accelerate the rebounding process in the u.s. dollar. it's true, last friday we saw both the dollar 0.stocks going up and yield going up. i think the dollar is going to continue to push higher, but the reasons are going to change. it is no longer going to be improved economic prospects. it's going to be risk aversion. this decline we saw in shanghai is very hard to ignore and implications of the sensex in india and in brazil yesterday started to retreat. i think when we go down at the end of the summer, it's going to be more a risk aversion and the dollar is going to gain mainly against the british pound and the canadian dollar. >> ashraf, what does that portend as far as for the u.s.? a strong dollar in this case would be bad news, wouldn't it? >> yeah. it would be a bad thing, bertha, if we're talking about 7% to 10% increase in the u.s. dollar from now, from these levels. do i think it's going to happen? probably not. you know, when you look at the other

the kospi is up 2%. shanghai composite, up 4.5%. the hang ang, get ago boost as a result, 1.9% and the bombay sensex is up 1.6%. this is the last time we checked, trading around the ranges of -- do we have the board for oil? there we go. $73.84. up 1.42. and brent is trading the other way, opposite direction, down 13 cents, $74.46 a barrel. bertha, over to you. good to see you. >> thanks, christine. interesting to see the die veteranence there. yesterday was the day to lead the market higher on an up note as we saw the surprise inventory. we've got dow futures pointing to another higher start at least. they are about -- let's call it close to 60 points above fair value. nasdaq, s&p futures looking higher, as well. we've got a bunch of data coming out today. of course, it is thursday so all eyes will be on the weekly jobless claims. we had a surprise build last week. this week we are looking for a drop. take a look at the ten-year bund yield where it is trading at this hour. right now at 3.28%. we have bonds rallying just a little bit

liquidity is hampering sentiment in the shanghai market. on that note, over to you, bertha. >> thanks very much, christine. here in the u.s., the futures have been mixed this morning. we've got the broader averages, the dow and s&p futures trading to the upside and that's where we stand. right now we've got toy futures up about 30 points above fair value. the american express ceo ken schnault saying things seem to be pretty steady. meantime, john chambers was cautiously optimistic. he thinks we've turned the corner, but is not ready to say we're in a recovery. we're likely to see quite a bit of hesitation this morning. taking a look at the ten-year note, yesterday that yield closed out the session at 3.76%. some technicians saying if we breach that today, watch out to the up side to somewhere at 3.88. we have the unemployment numbers out today and, of course, the big jobs number tomorrow. retail sales are expected to post their 11th straight monthly loss. >> 1 e straight monthly loss. that's -- well, what can i say? we're hoping it will turn

across the globe, the shanghai composite 4.5% to pull away from bear market territory. o who is leading this global market recovery and does the china bounceback mean it's time to buy now? we bring in dan genter and president of genter capital management. and scott ledler, chief strategist officer. how much on a regular basis are you watching the asian markets to allow that to predict what you're going to do here? and the reason i ask is because typically, historically, people have always sort of looked at the u.s. and said, okay, the u.s. will lead asia. are we starting to see a shift? >> well, within the last year, the relationship has changed. in 2007, when the market broke, the asian markets broke to the down side first. and at that point, it started to lead the rest of the world. and then if you recall in march, they led the first part of the rally. they rallied about two weeks before we even started our move. so when they start to have extreme moves, you need to use that as an indicator on your trading strategies. >> what does it tell you now? >> what it tells us n

the shanghai market and the hang seng tanking. a lot of concerns that the easy money in the chinese mainland is coming to an end. the bombay sensitive index trading down 1.7%. overall, it's all about the jobs report, jobs, jobs, jobs in the u.s. bertha. right, christine. and the expectation is that what we're going to get some signs, that the economy is still shedding jobs, that it will be at a reduced rate. the july jobs report is out at 8:30 a.m. new york time. that would be a big drop from what we saw in june, which was over 460,000. the smallest decline, in fact, if that were the case since last august just before the credit market collapse. the unemployment rate, on the other hand, is expected to tick up to 9.7%, which would mark a ten-year high. joining us now on -- let's call it a super friday. this is a very big jobs data. leo tillman, president of l.m. tillman and coauthor of "financial door wantism" and "max well clark" and i don't know if we're going to get a picture, but we've still got espin. leo, i want to start with

the biggest drop shanghai down 4%, 20% correction in two weeks here. a lot of traders noted that warren buffett's editorial in "new york times" very cautious about the economy with available just around the time that tin decks started to drop over in shanghai. the editorial was made available over there. that may have been a factor in that. deere is down 4% preopen. report earnings above expectation. company noted equipment sales are going to be weaker in this current quarter. that's their fourth quarter. bj's wholesale club beat estimate. mixed commentary. earnings guidance higher but they lowered their sales guidance. goldman sachs lowered alcoa on valuation. they are concerned that a run-up in a movement of prices may have been too fast too far. how are we looking at the nasdaq, rebecca? >> bob, we are looking lower, like the rest of the overall markets. premarket, the nasdaq 100, premarket is down about half a percent, a little more than that right now. we've got a lot of client metrics out of the brokerages for the month of july. look at the fact t

just yesterday in the shanghai daily, some news from a china official says china is wary about fiscal responsibilities in the united states or something like that. when there's talk of that that other nations might not look to the dollar to be their store wealth, going to look somewhere else, then all of a sudden we could go into a free fall, but as long as that talk is out there, i think it's going to keep a lid on the dollar. >> i love your name, i love the way, you know, mr. uirio, i love your last name, by the way. let me ask you a question. isn't that already known? don't we already know that? >> sure. no question about it. >> what isn't known is the fact that money supply has completely dried up. that's -- that's going to put a head wind on this market. let's talk about what's going to occur in the future not what everybody already knows. long-term the dollar is cooked. i understand that. i'm one of those first people to talk about that. but let's just talk about for the next few weeks, we're overextended and there's going to be a rally in the dollar. >> no, i thought it was --

the chinese, right? if you're trading shanghai, you must live in the main land, right? i cannot invest in shanghai directly. it's very difficult for me, or anybody who lives outside -- >> it's also separate classes, but largely, its the it's a retail-driven market, to a large degree. >> i'll tell you one thing. i think the best bet over the next five years is going to be a bet on the chinese yun going up. and maybe the best play is in australia. >> so would you take the money off the table now, peter, if you made money in the last six months? >> if you're a trader, yeah. the technical indicators are pointing down, get out. and by the way, you might be doing that in the u.s. as well market. >> thanks, peter. appreciate it. man mandy, thank you. see you later. >> thank you. >>> it was five years ago today, believe it or not, one of the greatest ipos of all-time. it was google. but what's the state of the market in that particular area ipo specifically right now? are we ready for an ipo-comeback? we give you the inside track. >> and here is a look at some of the year's high

china stocks suffering the worst fall since november. shanghailosed above 3,000 for the first time since june. the fettse and the cac trading down 3%. equities snapped their four-week winning streak. the s&p still up 48% from 12-month lows. retail sales not so hot and confidence down two months in a row. people beginning to thing not only is the market everextended but is the market going to be there like we were hoping it was going to be? don't expect people to start spending like crazy. >> every time the market starts to pull back, at least over the month or so, you'll see the buyers rush in. they've been thinking they missed that rally on the way up. we'll watch it very closely throughout the morning. oil prices also slipping overnight on worries about weak crude demand. remember, we are in hurricane season and watching the radar very closely. tropical storm claudette churned today the florida coast yesterday. hurricane bill, these storms are racing through the atlantic ocean towards the caribbean islands. will things start to pick up right no

the shanghai index plummeting almost 6%, taking the total decline since august 4th peak to 17%. certainly a big move lower, pointing out today the japan gdp numbers. >> shanghai was well on the way. we're worried about is this a signal because china has signalled this before.e. but gdp, expected 3.9. the problem is the domestic part of this number is dead. and japan needs 7% of their gdp is domestic consumption there even though it's a big export country. and if china dries up and that's the big if. because the export component to china was pretty good. german exports last week, pretty good. but people watch this number. so china as a leading indicator for the rest of the globe. david rosenberg was talking about this today. if you look back to october of 2007 and where that ultimately moved down to, that was the start of all this. there's the shanghai, the shares, the local market in china which was also overly inflated in october of 2007 when all the way down and bottomed in october of 2008, but bottomed before everybody else. >> you know, if you think the dollar's going to con

the shanghai market up 0.26%. in terms of nymex light sweet crude, it is trading off $1. $70.53 a barrel and brent right now is trading around the ranges of $72.86 a barrel. >> let get some analysis on the trends we're seeing in these mblths. very good to see you today, linda. in terms of investments, defensive and cyclical stocks, you're not going to get a bang for your buck in this rally, are you? >> i think it depends on how strong you think this rally is. i'm not so optimistic that the market is sustainable. a lot of this rally is based on the earnings forecast. if you look at the s&p companies, some two-thirds of them have beat expectations. but if you see how they've beaten expectations, there's a few things that come to light. one, they're starting with low expectations to start with. and two, the very strong showing of most of the banks, except for ubs, is actually on the back of investment banking with government-backed guarantees and yet bad debts are still being written off. if you look across the corpor

the shanghai composite off 4.3%. as i send it back to you, it looks like you may be getting a cold front from asia. from where i am, the air-conditioning chills have nothing to do with the weather outside. carl, back to you. whatever it is, it's definitely on the wake. let's turn to the u.s. trading day ahead here. anthony chan and rob morgan, market strategist for claremont wealth strategies. guys, good morning to you both. >> good morning. >> it's been pointed out that china let u.s. equities higher and it appears now they're going to lead us lower. do you see the selling in china overnight and over the past couple of weeks here as irrational in any way or orderly? >> i think it's orderly, carl. the shanghai market had basically doubled and now, just since the beginning of all, they're down 20%. some people are saying it's a bear market. i think that's premature. we've been calling for a here and shanghai is precipitating that a little bit. but our view is that this is a -- i'd say if we came down 10% to 15%, that's

the shanghai composite up 0.4%. data showed lending slowed sharply for the month of july, taking away any concerns of monetary tightening. the hang seng is up 0.7% and the bombay sensitive 30 index up 1.1%. in terms of nymex light sweet crude, crude oil is trading up 0.43 cents, $71.03 a barrel. brent also trading at these levels, as well. brent right now trading across the lines of $73.83 a barrel, up the 33 cents. bertha, over to you. >> thanks very much, christine. this morning, you'll want a double shot of expresso in your la ta. we're going to get productivity up, we'll be watching the start of this two-day fed meeting and bond auctions this afternoon. so plenty to focus on. so far we've got furchd slightly above fair value, taking a look at the ten-year bund yield, the ten-year bund had been higher this morning. we've got the yields now moving higher to 3.5%, a bit of caution lady of the fed meeting this morning. landlords, we've got the auction, the $37 billion of three-year notes at 1:00 new york time. part o

the kospi marginally lower. shanghai composite up 0.9%. hang seng up 2.07%. this market tracks closely what happens in the u.s. and the bombay sensitive 30 index up 2.5%. crude oil seems to be getting a lift on the upbeat comments coming from the fed. nymex light sweet crude up 86 cents, $71 even, and brent is putting on gains on hopes demand will pick up, $74.20 a barrel. bertha. >> good morning, christine. we are seeing the futures point up here, on the back of the fed saying they believe the end of the recession is near. bank of america right now up about 44 points above fair value. nasdaq futures up about 9 and s&p futures up about 5.5. taking a look at bonds this morning, bonds yesterday rallying on the back of that fed news. taking a look at the ten-year bund. doesn't look like that was going to come up, at least -- all right. we'll give it a little time. and the yield here is moving to 3.48% on the back of some of that german gdp data. and taking a look at the ten-year note here, the ten-year auction did not go well. some of that could be written off to

a bit of warning regarding the shanghai composite index. chinese stocks may fall by as much as 18% to the next three months. stock index futures are indicating a lower open for us on wall street. we are watching silver spring communications today. it has popular networks such as discovery and tlc, and it released its earnings ahead of the bells morning. that is business news at the new york stock exchange. i am reporting for wbal tv 11 news. back over to you. >> thank you. >> it is 5:22 and 67 degrees on tv hill. >> the ravens give suggs boot. -- the boot. i will have that for you next. >> what do you think is the appropriate age for a child to have their own cell phone? email us your response to watercooler@wbaltv.com. hi, may i help you? yes, i hear progressive has lots of discounts on car insurance. can i get in on that? are you a safe driver? yes. discount! do you own a home? yes. discount! are you going to buy online? yes! discount! isn't getting discounts great? yes! there's no discount for agreeing with me. yeah, i got carried away. h

i've got to till china says we're monitoring the stock market. and shanghai sells off. china is making these sort of nebulous comments about asset bubbles and these various things in the last several weeks and the market goes up and down on it. how much credence do you give this? >> you know, you can't give a ton of credence to it but you have to believe it a little bit. they did say back at the beginning of the year they would ease back on buying treasuries. they've done that a little bit. they're still obviously a major holder of our debt but they've eased back a little bit. i do take some note of what they're balk r talking about and what they're saying is purchasing commodities as opposed to going out and buying other assets throughout the world may be a better diversification for themselves. in that sense you have to watch commodity prices. they've had a bit of a run right now. i still believe in the macro economic theory here, the third quarter is continuing to grow, the economy is glowing brighter and brighter, but prices are stagnating a bit should they decide to

. >>> here he is, show the shanghai sinker. turned into a surprise here. >> remember, strange linkage between oil and our market versus the chinese market. and i've been thinking about this. 15% of our market that's through a mineral, machinery. oil that's directly related to the drive of demand in china. if you can somehow delink oil from that equation, then you're starting to talk about 5% of the s&p directly related. when oil is up $3, it counteracts the major chinese trade. also even counteracts bizarre secondary trades like potash which should be down, there are important negotiations with china. it trades up as if its ethanol. it is a more complex linkage. >> then the simple china -- u.s. -- >> if oil had been down today, we might have been down a percent and a half. >> then i get to the issue, on one level, a very, very high level, going way up. that doesn't make sense. oil is above 70. that's bad for people. >> i have been pondering this over and over again. and it bothers me immensely because it counter intuitive. 85% o

people should keep in mind with the shanghai composite, there are a number of names that trade here, and a lot of the tech names are multinational companies that get some of their revenue overseas from the likes of china, asia. also of note, you had earnings yesterday after the bell. looked weak to some of wall street, but did say they see signs of stabilization. the question is u is that flat line stabilization, and we see the likes of dell under 3/10 of a percent to the down side. of meantime, a baby goog was born five years ago, it jumped today, not a lot of action in the stock. back then, 100 bucks. meantime, perry ellis another story what we have been hearing out of retailers, the apparel maker essentially cost controls, expense management helped them beat. but they are saying their guidance looks like it's in line. but profitability, they anticipate it could come back by 2010. the stock is up 7.9%. keep in mind, however, folks, it's a small-cap name. meantime, e-trade out with its record performance in terms of new accounts. that was looking good earlier, and dry ships. i want t

on rumblings in the chinese markets, but will more shanghai swoon send the s&p into sell-off mode? cnbc's amanda drury is here to help us with the trade as china, the world's growth engine, begins to show signs of sputtering. back in a moment. ♪e helping people save money on car insurance. gecko: aw thank you, sir. boss: but i think there are a few other things you can say about what a reliable company geico is. gecko: right. uh, well maybe how geico's the third-largest car insurance company in america? nice tidbit there. boss: exactly. and i've been thinking,

good as the monday mentals are. i'll be in shanghai not. the companies are doing okay but not up 80%, 90% like the shanghai. we have stocks outperforming the fundamentals and that's serm true in the u.s. >> one other name, radio shack, which is now the shack. have you seen this? >> what? go they're repurposing their brand. >> sued by shaquille o'neal. >> like they're that cool. is it because radio -- >> brian shactman already owns that. forget about that. >> radio's considered a little analog. >> outdated. >> oh, yeah. >> the shack, seriously? >> good for them. >> they did boost their repurchase, their buy back from 90 million to 200. no expiration date for the company's buy back program. >> good. >> yeah, some decent stuff in there. beck? >>> coming up, we'll have this morning's top stories. plus, we'll be heading back to the grand tetons. steve liesman has been making the rounds, chatting with fed officials, playing his guitar, trying -- >> harmonica. >> -- recruit harmonica players everywhere. he'll fill us in before mr mr. bernanke

the nation's fastest 3g network. only from at&t. >>> welcome back. a shocker in shanghai as chinese stocks have their worst one-day loss since november. so is china's bubble about to burst or can this and other emerging markets keep up the recent rally? cnbc asia's amanda drury is with us. she's here this week at cnbc global headquarters with her take. mandy, great to see you. we're fortunate to have you this week. can you give us a sense of what it looks like on the ground right now? >> it's really interesting because i remember only about six weeks ago when the market in china was up about 90% year to date. in fact, the best-performing index around the world year to date. a lot of people were saying, you know, it really feels like the heady, frenzied bubble days back in 2007, when everybody was wanting to get on the bandwagon and throw their money into the stock market regardless of what the valuation was and what the fundamentals of the market were. massive liquidity-driven asset inflation-driven kind of rally. and everyone was wanting to get on board. now we're seeing

we're calling this one of the sweet and sour shanghai -- >> no, you're not. >> we're trying not to, but why not? after dipping into bear market territory yesterday -- >> sorry. the puns continue. >> the sauce, the dipping. you have to continue on the seoul theme here. you've got to carry on the theme here. china stocks surged 4.5% today. tim, you know, this is not surprising. usually you see a bounce the next day because the retail mentality over there, people want to buy when you see a pullback. >> there's a couple of things you can point to. big earnings in shanghai. after the bell by industrial, the biggest banks in the world. morgan stanley said they're seeing price upgrades. merrill lynch came out with a couple of strong buy notes. so people had a reason fundamentally to come back into this market. the government reaffirmed. the government is listening. we said this last night. they're not in this market trading it, but they are very concerned about sentiment, so that trickled through the rest of the world. did our market go up today because china was up 5% overnight? i don't think

8% of the time in the past year, we have seen swings of 5% or more on the shanghai index. so this is typical. this is par for the course. you're talking about a market that doesn't have any ability to short itself. there's no efficiencies in this market. >> and the market scares me. it might not scare other people. it scares me. there's a growing middle class in china that doesn't scare me, so that's where you have to go. again, that's where i would go if i wanted to play china. valuations, a litter richer than mcdonald's. they deserve it. yum is still the place to be. >> let's move on to the ancillary plays. you mentioned yum, but the minors were up on this move higher in china. tim, you followed those guys. >> rio tinto had numbers today. they were not weaker in the first half. you talk about china and commodities and about their employees being under arrest in china. you talk about a very delicate situation that commodity producers around the world need china to be playing ball. they need them to be buying commodities. they strike a very hard line between driving a hard

kind of increased confidence in terms of the global recovery. but shanghaie trends on worries about a fall in bank lending. the composite there slumped as much as 3% before paring losses to end 3.9% lower. according to local media, new loans by china's four state-owned banks fell sharply. the hang seng fell 0.7%. also on concerns about liquidity driving up. >>> despite weakness in the region. all there is by the lort decline in jobless rates. the national elections weekend also in focus with the opposition democratic party likely to win sunday's elections. that's it from asia. carl, i trust you are being nice to mandy? >> i think the bigger worry is whether or not she's being nice to us. >> is that the question, is it? that's the water cooler talk. >> don't worry, we talked about this already. >> where is my coffee, carl? >> thanks, christine. >> let's see how the u.s. markets are shaping up so far this morning. we're, of course, preparing to wrap up another week of trading. i think for global markets we're clocking up to seven weeks in a row now? >> this wo

i mean, in the summer of 1937, japan had--had attacked shanghai. but this--i mean, th--this is the rea--they had--war was--had already broken out. c-span: but what was the reason? >> guest: well, it goes back a long a way, but i--the j--japanese had, actually, for hundreds of years, ambitions in china. it's--it's really--it's not something that--it was not something that just started in 1937. it--it was--it had--there is a long history of animosity here. c-span: what's the reason? >> guest: reason for? c-span: the animosity. >> guest: well, again, you know, we--i don't know if we have enough time to go into this, but there had already been, you know, war between--you know, there was a f--there was a first sino-japanese war and there had been already numerous attempts by the japanese to--to--to carve up par--parts of china. they had already seized manchuria by the 1930s. c-span: wh--what was it and--and what is it about--it--what--was it the japanese character that led to this kind of slaughtering? i mean,wh--what did you find in this process? i assu

>> listen, you saw asia, the shanghai index just fall 10% like that. that's the kind of environment -- >> you talking a few days ago? >> within the last two weeks. they're 10% -- >> 5 in a single day and came back the next day. >> it came back a percent and went back down another 4.7%. down 10% overall in two weeks. that's the type of move that could happen once the rug gets pulled. >> how much was shanghai up in the previous 6 to 12 months. it doubled, right? >> that's where the growth is. we're more of a mature economy. >> more than doubled. a lot of the chinese stimulus money went straight in the stock market. >> you're still gettinging way ahead. but what happened was, anyone that bought that market on those highs -- >> go ahead, john. >> but dennis, almost half of the government stimulus money in china went straight in the stock market. that's not very healthy. >> it's been pretty healthy for investors over there. go ahead. >> what i'm thinking if we do continue and you're right with a great recovery, you still need to be prudent on your entries. y

the excite. whether it's beijing or shanghai. you see the excitement in every part of china. so i'm very, very optimistic about the prospects of china. and let me add, maria, china has declared that the gdp growth rate is about 6.5% or 6.8%. the way i look at it is the differential gdp growth rate between china and the western world is about nine points because the western world's declining about 2 to 3 points. so to have an economy with over a billion people industrializing, growing gdp at a 9-point differential over the western world is a very, very exciting market. >> are you seeing a movement of people moving from the suburbs to the cities and really adding to that vibrancy that you're talking about? >> i mean, i wouldn't quite call it suburbs -- cities or the suburbs. it's more the interior part of china, not just the coastal part. the interior part of china is also developing extremely rapidly. i was looking at a study which showed a little rural village in a province and some people have been tracking this development over the past three or four years. in three or four

the shanghai ended down and the biggest loss since september 19th.you want to play it, what's the best way to play it? long-term, you are extremely bullish on china's economy. this is a set back after a rise. >> it is a set back. we shouldn't be surprised about that. one thing that worries me is a lot of loans that were made in the first half of this year went into cross holdings. companies get loans and then we will speculate on buying other company stock. it's like wal-mart took out a loan and bought a bunch of intel or whatever. if the economy does well, they are underexposed to china and all emerging markets. >> what's the best way to do that? if i want exposure to the growth rate you have in china, i will put something away. >> two ways. etf and the two etfs that i think stand out are fxi, 25 enterprises and well-known and you get good exposure. another is hao which is a basket of small cap stocks that are leading the way in china. >> do they give you exposure to state-owned companies? >> exactly. >> i cannot buy a stock in shanghai. >> they are

the shanghai market datanked. all that optimism about china leading the world out of a recovery gave way to concerns of rally has been over-done. bear in mind, this market is still up some 60% for the year. hong kong bore the brunt of the sell-off outside china. hang seng, 3.6%, steepest drop in 4 1/2 months. china led thes loes in the hong kong market. sok south korean market is down. indian market is down. sending it back to you. >> thank you very much. >>> up next is bon voyage to the travel channel? julia boorstin has the answer. >>> and then, can we kiss that summer rally good-bye or is this just a pause? word on the street and buzz from beyond as we're getting you ready for a very big market monday. dual sector spotlights in that vain. we'll be right back. >>> you're watching cnbc "squawk on the street" life from the large e.r.est financial capital of the year. >> we're back. the white house is going to drop the idea of giving the americans the option of government-run insurance as part of the new health care

>> we should not be letting the shanghai drive our market here. letting china economic growth be a dictator watch the pmi at the end of the month. merrill lynch and morgan stanley came in and said there will be earnings upgrades. you know, the ipo of the china construction, which was a $7.3 billion ipo earlier, last week, sucked a lot of liquidity out of the market. so technical factors had a lot to do with some of this move down. and that earnings will be good. i think china has got fallen apart. i can this market was overheighted, i don't think it's cheap, and i don't think we should be driving a lot of our commentary off of it, quite honestly. >> what's the best play off china? you were got exposed to the china market, really whatsoever at this point in terms of pure china companies, where would you go? >> well, i think the insurance companies are actually still doing quite well. i think china life is growing, not only their revenue base, but growing their customer base. i do think china mobile is a great place to continue to see growth in 3g r

i do want to separate the shanghai composite from some of the other stock indexes around the world. we are talking about a very closed market, a market that has wild swings. if we welcome and the ftse in london was down 7% -- if we woke up, and he puts in london was down 7%, which would be in a panic. -- we would be in a panic. neil: still, they are saying that the problems that have been roiling us, lending, that we have some kind of come out of, at least the worst of it, and they are just getting his knee deep in it. >> there are concerns, it even though i want to separate the stock indexes, if you will, he our economies are completely intertwined. when you talk about commodities being at the root of what is happening in china, are they going to continue to buy or oil hand over fist? looking at cropper, will they continue to buy that? -- looking at copper, will they continue to buy back? , are they going to spend more internally? , are they going to spend more on their own internal fiscal policy? so these are the things that we have to consider, and with that government, and they

the shanghai composite, a lot o guys have been looking at this because it has been leading the marketit's but the in a candletop. if it doesn't hold $31.75, we could be in for a sloppy session as far as equities are concerned later down the road. >> david, thank you. we'll see you again very soon. >> thanks, erin. >> david lutz. he likes that boat show in annapolis. general motors announced something today, the chevy volt will have a fuel rating for 230 miles a gallon. that is not a typo. is it too good to be true? brian moody and publisher, auto week magazine. a couple of question questions, brian, too good to be true or not? >> yeah, it's definitely too good to be true because this is really an electric car. the way they're measuring it is not exactly accurate in terms of how you're going to use it every day. some people will get great gas mileage no, question about that. but 230 seems a little high. >> what do you say, dutch? >> i think brian is some kind of seer because this is what the government has said in terms of the epa. these are the kinds of requirements that are asked of

the stock underperformed and the shanghai composite index. this is without some richk because growth brings competition and expect and unexpected innovation. google is teaming up with china mobile, the world's largest mobile phone company to offer the o phone there. it will get a subsidy as well. it will get competition. furthermore, best buy agreed two days ago to california. china unicom products. >> they were able to play. ahead on "street signs," coffee wars. donut wars are on. the newest contender from the great white north. up to canada is tim horton with an interview of the ceo and find out if there is dough to be -- wow. he's ruling. the post office is raising prices and cutting costs. $7 billion this year alone. is it time to rip? at 155 miles per hour, andy roddick has the fastest serve in the history of professional tennis. so i've come to this court to challenge his speed. ...on the internet. i'll be using the 3g at&t laptopconnect card. he won't so i can book travel plans faster, check my account balances faster. all on the go. i'

and the first point i would make is the chinese market, the shanghai composite, for example, is really a -- it's a closed market, essentially for the chinese. and they are very kind of med - media-driven. it's all on one side of the bus or the other side of the bus, that's the way their market is. >> we should point out to viewers, if they wanted to buy shanghai, they couldn't. that's only for people who live in mainland china. and it's really a market that's not reflective of many other markets in the world. >> let me get back to this later. but -- >> jim, go ahead. >> we will make it back -- >> the chinese market topped before our market did. the chinese market bottomed before our market did. >> are you talking shanghai or hong kong? >> i'm talking shanghai. >> okay. >> their market topped before our market did and their market bottomed before our market did. and i think it's very much the driver. it may not be the biggest economy in the world, but right now it's driving a lot of things. chinese stimulus has driven a lot of things. it's driven a lot of the global activity, the increa