welcome to the show. the headlines today, here in asia, markets were mostly up thanks to a jump in tech stocks, but investors still sell the strength of the recovery. >> here in europe, they'll be paying billions to president obama's new bank tax. >> but in the u.s., investors await earnings for jpmorgan. >> and welcome to "worldwide exchange." i'm christine tan here in asia where it's 5:00 p.m. here in singapore. let's get a quick view of where asian markets are trading or have closed today inspect is how the picture is looking. pretty mixed across the board. better than expected earnings coming from intel. that is giving a brighter outlook on demand for pcs. that's giving markets like the nikkei 225 higher by 0.7%. the hang seng is down, a bit of profit taking going on, down 0.3%. the shanghai composite is up slightly, 0.3%. in south korea, this is how the her picture is looking. the bombay sensex marginally higher and the aussie market marginally higher. the ftse cnbc global 300 index, this is how the picture is looking. up just a touch 8 points, 4,665. ross, good to see you this friday. >> good afternoon to you. good morning to those on this side of the world. it's just gone 9:00 in london, 10:00 cet. we're up 0.3% for the ftse 100, 0.6% for the dax and the cac 40. the likes of infineon up in early trade. in germany, there is where we stand. bertha is with us for a look at the u.s. futures. hey, bertha. >> intel setting the tone positively for tech, but it's not helping at least dow futures at this hour. we're going to get readings of consumer sentiment. the cpi data as well as industrial production. of course, the big headline of the day, jpmorgan will be reporting earns ahead of the open. banks this earnings season are the big headliners. let get you caught up on the big stories we're following from around the world. jp morningan reports results at about 7:00 a.m. analysts will be watching to see if jpmorgan raises its dividend, which could signal management is more confident about 2010 earnings. jpmorgan closed up 1% on thursday. the other number they'll be watching for is what kind of compensation they have as far as what will pay out in bonuses. treasury secretary tim geithner says the government's bailout of aig was not meant to help out the bank's counterparties. the new york fed told aig not to disclose the payment. in an interview on cnbc with john harwood geithner said he had no role in the decision that said aig was legally obligated to make those payments. >> that was a huge by sequential position, deeply offensive to me, too, but it was necessary to do. and we did it in a way that i believe was not just least cost the taxpayer, best deal for the taxpayer, but helped avoid much, much more damage than would have happened without that. if we could have done it differently, we would have done it differently. >> separately, geithner says president obama's bank tax makes economic sense and it's not meant to punish companies. the proposal comes as it shows u.s. bankers are on a record to pay a record $145 billion in bonuses. and first round bids are due today for the famed but perennially troubled mgm studios. the eventual winner will earn the rate to the james bond movies and the next two lord of the rings movies. last year when it cut a deal to halt payments, mgm made one film, "fame." bertha, french industry minister chris anistrosi told the government the government is considering having greater step in the company's decision making. there is a 50/50 chance. the comments come amid a dispute over jobs. >> japan's shishetto is said to snap of bare essentials for $71 million. it will finance the buy using $328 million of its own cash holdlings plus $1.6 million worth of bridge loans for banks. it's offering a hefty premium to the share price of bare essential sales. getting a nice pop on the news, shiseido jumping 5%. the company saying it may become less financially sound since most of the acquisition costs will be financed with debt. still in japan, the transport minister will meet with prime minister hatoyama today regarding jal's financial plans. the struggling carrier could file for bankruptcy production as early as tuesday. shares of jal are tanking 5% at the close 7 japanese yen. russel's $2.6 billion ipo has been fully subscribed. its shares will debut on january 12th. this is the first time ever for a hong kong dual listing. investors with the remaining shares were scooped up by an sflushl investor. bertha. >> christine, the u.s. is taking a lead role in the massive global response to that horrible disaster in haiti. 5500 soldiers and marines will be deployed by monday. dozes of aids have arrived, but the damaged airport, poor roads and damaged port have slowed delivery. the international red cross estimates that the death toll stands at around 45,000 to 50,000. intel's fourth quarter profits surged nearly ten fold as the chipmaker benefited greatly from the rebound in the pc market. sales jumped 43%. intel is optimistic about 2010, as well, and plans to hire more people as part of an increased focus on research and development. >> we've seen steady demand increases since the secretary quarter. and it shows how people need technology and the stuff that we build becomes really important to them. >> in fraj further at this hour, intel shares run over 2.5%. joining us now is kim do, head of asian asset market. kim, good to have you with us. first of all, do you think those stronger than expected intel earnings have made you more bullish about the technology sector? >> in fact, that is very positive for our overweight in the technology sector in our portfolios at the moment, yes. >> so what does it says to you about overall tech spending? is it finally taking root? are things finally picking up? >> that's what we believe, yes. our research over the past six or nine months suggests that the supply and demand situation has started to very much work in favor of the hardware technology sector. the supply and demand situation very much favored the demand site side. the material prices or commodity prices went up sharply. and it's a shame it's happening to the technology sector at the moment. as you all know, over the past few years, a lot of companies have been cutting back on technology expansion. and as a result of increase in demand, especially from the emerging markets world and now from windows 7, we think that this trend is likely going to continue. >> kim, it's bertha here in the united states. here in the u.s., we watch what's going on in the chinese banking market and worry about a bubble happening there. there's been so much mo money coming out. i wonder what the view is with the way the government is going about the banking industry with a big tax. >> right. the well, the first thing about the chinese banking sector which i think that we should bear in mind is that if you look at the loan to deposit ratio among the major banks in china, in fact, it is something like less than 60%. so the banking system is in -- is not geared or not leveraged at all. if anything, perhaps they have too much excess reserves in the banking system which could be lent out. but as you know, the chinese government prefers to have some kind of a steady growth rather than domestic growth. and domestic growth of lending was a result of the global trade collapsing in the last quarter of 2008 and that's why they tried to, you know, motivate -- to borrow money in the first half of last year. that's why we have an explosion of loan growth. but we think that this year loan growth is going to be something like about 17% and if this compares against nominal growth in china, we think there's still ample money for anyone who wishes to borrow in china. >> what do you think about the american banks and what president obama is contemplating in terms of this big tax? >> well, i think that like every other investor in the world, we believe that the regulations and the taxation aspects in the u.s. banking system unfortunately are not going to get any better as a result of what happened in the 2008 with the subprime crisis. so we think that there is still going to be a few issues involved there in the u.s. banking system. so we're not really surprised about what happened or what we'll talk about in the papers today. >> yeah. kim, i mean, do you have any concern actually what it may do is even crimp credit availability in the u.s. even more be another headwind for the u.s. consumer and demand of asian goods? >> we think that the u.s. demand for asian exports has not been spectacular over the last six months. that is quite right. but if you have a look at the export growth numbers coming out from korea, taiwan or even recently from china, it's been spectacular because the best growth market for asia is not so much the u.s., but it's the emerging market world. and also in the interregional trade in asia is very strong. so we don't think that we need the u.s. to be that strong in order for asia to prosper, as long as the u.s. doesn't go back into a massive recession, i think we're fine with that. >> okay. kim, stick around. we'll talk to you a little bit later. still to come on the program, could obama's bank tax go global? as the president announces a plan to recoup the cash calls, governments are being called in britain and others to follow the suit. you're watching cnbc. that is the view in the hrt of the city of london, just down from our studios. bund futures open modestly higher. the 10-year bund yield, nudged down to 3.28%. we had gains in u.s. treasuries after a solid 30 auction helped consume supply concerns. the three-year note down to 4.71%. what about the currency markets? christine, it's pouring away over that. >> how did you guess, ross? this is how the dollar is looking across the board here. looking a little bit mixed, as you can see. the dollar weaker against the yen, 90.77. but strong against the euro, 1.4406, broadly because of the struggling weak economy. that seems to be weighing on the euro. sterling/dollar 1.6 21 and euro/sterling down 0.8826. bertha. >> u.s. investors wrap up the trading week. the consumer price index is due out at 8:30 a.m. time. then at 9:15 a.m., we'll get december industrial production, which is expected to have risen 0.6%. then at 10:00, the university of michigan puts out the preliminary report on january consumer sentiment. that would be up half a point from december. richmond fed president jeffrey lacker speaks about the economy to the risk management association. lacker is not a voter on the fomc this year. ross. >> meanwhile, european stocks are firmer today. they closed up around 0.3% higher for the ftse 100 yesterday, a bit motor for the cac 40. we'll bring you up to speed with what is happening in london. first of all, becky is with me here in the u.s. stutdo. >> and that's where we're talking about the london markets. >> exactly, yes. and pearson is in front again this morning. >> yeah. it's one of the big gainers on the market today. they are a media company today. now, there was a report in the financial times suggesting that idc was sounding our potential buyers. pearson came out and said that they are indeed reviewing their strategic efforts. we see this particular part of pearson's share business, it's financial data and analysis. it's a significant part of the business, too. we're seeing hears of pearson reacting, 1.9%. ex peeron, similarly, up by 1.8% today. ex peeron is a credit checking company, meeting expectations for the most recent quarter and rs, ross, telling us that their north american business, crucial to their operation, looks like it will be growing in the fourth quarter. we have seen some significant declines for mann group today. this is the world's largest listed hedge funds manager. so it's interesting to see what they have to say in their figures and their earnings. the shaers are down by about 4.6%. so off the lows of the session. basically, the company is telling us they have seen assets down by 4%. a couple of reasons, they're continuing to underperform. all in all, the stock is really the biggest decliner on the ftse 100 today. >> becky, thank you very much indeed for that. let's get over to frankfurt. patricia is standing by on that market. how much is the likes of infineon being boosted today? >> it was trading up more than 1%. at the moment, infineon is up 0.7%. but it's not amongst the main gainers any more. at the moment, the health care stocks are doing fairly well. up 2.3% the first time since the beginning of the sector. cargo up almost 30% for the month of december. all in all, very good numbers. plus as well, just a few minutes ago, news broke from air berlin, coming through with a positive bid expectation for 2010 and air better len trading up, 0.7%. s.a.p., down 1.8%. >> cars will be back in focus. we have numbers coming out from the apa. what can we expect? what are we getting? >> commute car registration for europe up about 16% on a year to year comparison. bmw is up 8.6%. from bmw, we had great numbers coming through with china sales from december. also saw daimler. in terms of our tier numbers, up 0.4% and bmw is up 2.2%. we are just hearing from opel. they have a supervisory board meeting today. there is new management being introduced. none of the rumors that we might see short hours being introduced at opel has been confirmed. we are still watching that one, as well. possible, of course, the entire issue with the chairman stepping down. what does that mean for a particular question after the rumor and the speculation that we might see a three-way tie up? there's a lot on our plate. at the moment, though, the market is reacting positively. >> patricia, thanks for that. carrefour came out with its sales yesterday. this is the world's second biggest retailer. it met expectations with fourth quarter sales. it will hit profits targets for the year. bank of merrill, merrill lynch analysts write a note saying they're raising the target price from 40.5 to 39 euros and they maintain their buy rating. that's where we stand right now in some of these european markets, christine. >> let's do a final check with our guest host. kim, before we let you go, tell us where you're putting your money, in oerms of sectors, where might you be more bullish? >> currently, our portfolio is still positioned overweighting in the growth and the cyclicals area of the market. so we still leak technology. we like consumer discretionary because the emerging markets consumer or the asian consumer, actually, with is a very happy chat, a healthy position. >> kim, you know, much of this growth or happiness that you're seeing in emerging markets, a lot of it has to do with the liquidity sloshing around in emerging markets because of stimulus spending, stimulus policies. once that goes away, are you worried snm. >> well, the demographics in asia and the demographics in emerging economies are relative to japan or relative to europe or the u.s. so i think that the working age population in asia is a lot higher than the retirees proportion. and as a result of that, we think that the consumption trend or the consumer plays in the asian and emerging market universe, i think that that is a very long-term theme. but obviously, one has to watch the valuations, as well, because if these stocks withover valued, with you wouldn't want to hold it in consumer discretionary polls. >> do you see not as much growth in sectors in the u.s. or europe? >> sorry. i have a bit of problem with my earplug. >> sorry about that. i'm just wondering where you're investing in those names. are you saying in asia? are you looking at multi nationals across the globe? >> sorry. i have a bit of problem. >> it's all right. kim, can you hear me? okay. i think kim has dropped out because there seems to be a problem with his ear piece so we're going to let him go. kim, thank you very much for that, if you can hear us. all right. >> so nice of him to join us. coming in at the last minute because of some other technical difficulties, we have a lot to come here on the program. jpmorgan is expected to report big profits ahead of the opening bell in the u.s. but it's the bonus numbers that will likely stoke anger. the obama administration looks at global tax taxing. you're watching cnbc's "worldwide exchange" brought to you from asia, europe and the united states. the ftse cnbc 300 up 6 points. the rest of asia, a little bit more mixed, christine. >> that's right, ross. in terms of sectors, we have the technology sector doing very well after that expected earnings coming from intel. that is giving a boost to tech stocks across the region like the nikkei and japan, taiwan and south korea. the hang seng, the only market down, 0.3%. shanghai composite a modest rise by almost 0.3%. in south korea, bombay sensex doing well. and the aussie market off just marginally higher, about flat. bertha. >> christine, you always think that fridays should be a quiet day, but we're going to have a very big premarket reporting session here in the states. right now, we've got dow futures down about 14 points below fair value. nas dax futures are flat, absolutely. tech is likely to be supported today because of intel's reported earnings. we're going to get consumer price index, and big earnings from jpmorgan this morning. so a lot to look at ahead of the open. back to you, ross. >> and the inflation daig data is going to be important in the u.s. brian, before we get on to the u.s. data, let's get your view first of all where we stand in ratio to here in europe. there doesn't seem to be enough detail. is it fair to say that most of the plans will rely on growth rather than cutting spending? >> we only just got the plans. we're still looking at the details. what is clear is that 2010, they're going to buy the bullet to understand pressure from the eu peers and the markets. but they have no choice but to tighten. they have a 4% tightening there and there's a lot more in the actual timing in 2010 that we previous had. these are some real concrete measures. there are uncertainties as to whether they're going to be able to carry on with a tight policy two, three or four years down the line. >> mr. trichet was pretty strangent in his view. there's not a chance in hell of anybody leaving the euro zone among speculation about greece. it doesn't appear, though, that they're going to much change the policy for peripherals, really. >> absolutely. the has to be on the core, france, italy, germany, and in terms of their policy, ecb does not want to be seen as being soft on greece in terms of some sort of quasi bailout. if there was a bailout, it certainly would not be the ecb that did it. >> brian, here in the u.s., we're going to get inflation data today, industrial production. it seems as though as of late the data has had more noise in it, a little bit more troubling starting with last week's jobs number out of december. are you worries that things are going to get a little soft here in the u.s.? >> i'm not sure. i've always viewed the market as a lagging indicator. we've always said that q3, q4 of last year is when the economy is going to start to pick up. we're not yet to the point in the u.s. so the pace of job losses is coming down, but the outflows of unemployment has not started yet. but that will probably get there in the next four to six months. i'm not too concerned about the flow of data out of the u.s. confirming our recovery view. >> brian, this is christine. we have boj chief economist saying that the risk of another inflation is not that large. do you agree? >> i think japan still has a major challenge with deflation. the central bank in the last few months has been more aggressive. i think they may have to do even more. the economy has picked up a little bit on the external side in the second half of last year. that was following a real collapse in the beginning. the domestic side stilt looks pretty weak to me in japan. he think it's still full tilt in the bank of japan in trying to stimulate that economy. >> are you worried about the debt situation? >> it certainly is the worries. it's the reason japan is not rated aaa. it's rated aa minus for the jgb and that's primarily because of the public debt problem. what it means is that the focus has to be on monetary policy. there's not the fiscal space to do the pump priming we've seen he elsewhere. >> what about the longer term implications we've seen in the u.s., brian, as the u.s. continues to issue this massive debt that we're seeing? there's a lot of folks worried down the pipe about whether this will hurt us quite a bit. >> ultimately, there has to be a fiscal adjustment over the medium term. but as the world's largest economy with the global and research currency, they've got a lot of time, frankly, to address that issue. we recently affirmed our aaa rating in the u.s. with a stable outlook. there will need to be a serious fiscal adjustment over the next three or four years. there is a structural deficit in the u.s. you look at what happened to corporate taxes, 55% down in the last financial year. previously has been very much inflated by asset price strength and financial sector profits. those are not going to come back. and briep, we'll have to leave it there. brian colton from fitch. after this quick break, a closer look at tech and outsourcing and spending on the back of tech results. stay tuned. ddddddddddd and welcome back to "worldwide exchange." it's 5:40 here in the evening in singapore. you're looking at a sunshine shot of the city. let's go out to tokyo and check in on the trading day there with nozomu kitadai. >> that you can, christine. the nikkei rose 0.7% to a fresh 15-month closing high. foreign investors took center stage and snapped up blue chips. shares in sheseido shot up after they agreed to buy bare essentials. the latest government figures marked the largest net capital inflow in 2 1/2 years in the seventh straight week of net purchases. analysts say a growing number of investors expect earnings to improve as the global economy picks up. the recent pause in the yen's appreciation is seen as a plus for japanese exporters. the nikkei has learned that japan airlines' two core units, japan airlineses and jal capital are expected to file for bankruptcy protection as well as their parent as early as the 19th. japan airlines plans to dmift its government backed economy the same day. 6/the money getting played by speculative investors gradually subsided throughout the day. >> kitadai-san, thank you very much for that. you have a good weekend. now for a look at the other markets we're watching, the kospi, for instance, here in asia, it closed up 1% led by a rally in tech and share building stocks. its shares are now worth about 842,000 korean won per share. shares of hyundai motor rallied to close up 4.4%. south korea's top automaker said it planned to invest more than $9 billion this year to develop eco friendly vehicles. over in shapg high, the composite there if she had 0.3% higher after the data showed improved direct investment. the only market in the red today, profits are going down. down in australia, the s&p's 200. pretty flat with financials helping to lift the markets a little bit. shares of commonwealth closed 2.3% higher at 58 aussie 10 cents. on that note, let me wrap it up and throw it to you, bertha. >> thanks very much, christine. index earnings well ahead of expectations at 30 cents a share, proving that the tech market is alive and well and spending strengths. consumers continue to drive the market while businesses hold back. let's get the broader picture. mr. shaw is the head of market research in india. intel is bullish. they had that the consumer is still out there buying products. they think 2010 will be so good they're going to high more workers. is this something you think is indicative of what we can expect in the tech landscape? >> certainly i think, you know, we have those that have come in india so far and they were quite encouraging. and going by the utilization rates, i'm prompted to say that the following few quarters should bring in an excellent rate. the base of more software demand and particularly the outsourcing boom which kind of tough to speak in the end of 2007, beginning of 2008. so perhaps, you know, we are not yet near to that, but we are beginning to go on that direction, which is very positive. >> examine we know tcs is expected to show earnings any time now. what are you expecting to see snm. >> our forecast is about 2% to 2.5% growth earnings quarter to quarter. we have, in the anticipation of improved demand, utilization and firmness in margins. we also already upped the earnings target to 39 rupees in the wreent period. the stock, like tcs, has already run up after the info and most of the other software sector stocks have run up. so we have currently a recommendation on tcs for its target price at 21 times next year's earnings. >> we know that a rival of tcs emphasis recently saying that pricing has stabilized. where do you see -- do you see tcs's ability to raise prices in this environment? >> well, clearly, i think this is very strongly focused on two segments, one is a banking and financial services and the other is foblter pharmaceuticals and health care. i think banking is moving rapidly and that is where some pricing improvement can be seen. as for now, for our forecast, we are not building in any kind of pricing improvement. we are more banking on the utilization improvement and that is what i guess most companies would tend to do. they are still knot clearly about any kind of strain and they would like to gain more of the market share issue. >> you're more bullish on midcap software.i wonder, what would you prefer, a midcap sector or other sectors like power infrastructure? >> well, in power infrastructure, we are bullish about a couple of companies. one is engineering and the other is solar technologies. both of these companies are well positioned to capture the -- the riding in the generation, in the hydropower and in the power distribution segments. these are a couple of companies that we like. apart from that, we are watching companies that are enabling power structure. those are in the large cap space. >> and what about the general market? we've seen tech stocks giving some of the other markets in asia giving a boost. does that help out at the market at all? >> yeah. definitely, in the last few days, after the infosys numbers, the tech stocks have strengthening. while on the other end, the other stocks like metal have come down. and it does kind of balance the rally in tech stocks. the market is holding on. until the budget is announced in the end of february, the market could be range bound with about 800 to 1,000 points of movement above and below the 17,000 sensex levels and similar with nif nifty, perhaps one can expect about 5% movement. but it is midcap and small cap space that will haunt the highlight. as the new data comes in in terms of the q3 earnings as well as the economic data like industry production, exported, etcetera, i think the mid and small cap spaces off a choice for the investsers for looking at, say, marnlal safety. >> we're going to leave it there. we apologize for the long delay in the satellite transmission and thank you for joining us. the first of the big u.s. banks, jpmorgan, reports first quarter results at about 7:00 a.m. new york time. that will be the headline story. the banks expected to earn about 61 cents a share, compared to about 6 cents a share a year ago. analysts will be watching to see if jpmorgan raises its dividend. we'll be watching that compensation number, which is likely to make headlines in the basic papers on bonuses. jpmorgan shares at this hour closed yesterday up 1%. the winner will be announced today for the mgm studios. they will rescue the studio from possible bankruptcy. it could refocus gm on making movies again. last year when it cut a deal with creditors to halt interest payments, mgm would only release one film. it was "fame." 2009 chose identity on a positive your. the nintendo wei was the top holiday eller. europe mario brothers was the top game, beat out all those war games that guys like too much. >> it would be nice to play some of the games with a bunch of young girls in my house. it's just never going to happen, really. the world's second biggest retailer did warn the consumer weakness is threatening the trading environment this year. there were encouraging signs out of the emerging markets that may indicate the company may have reached a bottom. in france, the government may reiterate its stake as much as 20%. the french industry minister told reuters the government is considering the steps to have a greater say in the company's decision making. the comments come amid results. >> ross, i think you need to clarify, when you say young girls, you mean your daughters, right, not -- >> oh, yeah. >> it's a bit deceiving, if you know what i mean. >> well, you see, i know what i'm talking about in my mind. yes. i've got two young daughters. there are no men, no boys in our house, you know, who want to play video games. >> fair enough. well, your girls might like this brand. japan's sheseido is sed to buy up bare escentuals for $1.7 billion. it will use $328 million of its own cash holdings plus bridge loans from banks. it's offering a hefty premium of bare escentual ss shares. taking a look at the boards, jumpling 5% on the news, standard & poors placing the company on credit watch negative, sag it may become less financially sound since most of the acquisition costs will be financed with debt. obviously, stock prices depress, the seller is not as willing to schedule. so you have to find a mid point where both sides are set aside with the upsides as well as the downsides. japan's transport minister says a state bank corporate turn around body will start its rewhat billtation process on tuesday. the airline is expected to file for bankruptcy in the same day in what could be the nation's sixth biggest agency. shares of bal janking 12.5% at the close. australia's cpr has an offer to buy its sugar business. csr says it plans to stick to its initial plan. csr's rejection of the bright offer is a play to even more attractive bids some say. shares of csr in australia closing pretty much flat today. 1 aussie 98, ross. okay. our guest for the next hour is joining us a little earlier than usually. we're going to kick off with the banks in the second half. we're going to get your views on intech and the tech sector. generally, does it make you want to buy the sector? do you still have doubts about the strength of it from here? >> i think it's nervousness about what the intel numbers were going to generate yesterday, ross. it's a great relief to see the numbers as good as they are in the short-term. it's in a cyclical sector. as the global recovery matures, we hope, early cyclicals, autos, that cycle maturing now from an investment point of view. and i think tech sector can carry the bat on some point particularly as corporate, not as much cap engts -- >> well within there's talk in there that the replenishment side. >> i think. and i think index will be one of those sectors.. this is all predicated on the fact that the world is improving and people are going to go out and spend a wee bit more. so i think this is a sector we would be happy to be overweight in right now. i took a lot of confidence in those numbers last night. >> and you'll be with us for the whole playing out. bertha. >> thanks very much, ross. here in the u.s. and around the globe, folks have dug deep and begun giving in massive amounts as the massive global response to the earthquake in haiti goes into its third day. search and rescue teams are on the ground. the u.s. southern command has taken control of the airport. and 5,500 soldieres and marines have been deployed by monday. the damaged airports, poor roads have big slowed due to the health offers. >> you text haiti to 90999. a company set it up like that and they've raised $3 million already. >> we'll continue to measure the reaction to that. bertha, thank you. also still to come, has europe's loose monetary policy sparked a surge in inflation or not? we'll get an indication right after this. hello and welcome to "worldwide exchange." in the u.s. today, tech may get a boost from intel's blowout results, but now we await earnings from jpmorgan. >> and bankers wake up in the uk realizing they'll also be paying billions for obama's bank tax. and in asia, investors are doubting the strength of the recovery. >> you're watching cnbc's "worldwide exchange." just getting inflation data out of the euro zone. we've got trade data out. i'm looking for the trade balances up 4.8 billion euros. that poll was 4.5 billion. and the euro zone, the december inflation confirmed that 0.9% is the annual race, with in line with december inflation, up 0.3% month on month in line with forecasts. probably nothing there too much to worry. as far as european stock markets are concerned, euro/dollar, 1.4409 is where we currently stand. that data is very much in line with what we're expecting. bertha, ahead of the u.s. open, it's all going to change presumably with jpmorgan figures, but what are the futures like at the moment? >> they've been trading in a fairly tight range. it looks like they've come up with ate from the last hour. dow fuchs, above fair value at the moment. nasdaq futures have complier. intel's certainings and its outalthough, the big ben factor will be jpmorgan. and we've got a lot of data ahead, xris teen. we're going to get consumer price index. we're going to get consumer sentiment mid morning. i don't know where it is they load up fridays with so much to do when all you want to do is cruise into the weekend. >> they're trying to punish us, that's why. the dollar seems to be in focus once again. a little mixed picture across the board there. dollar weaker against the yen, but stronger against the euro. the euro is broadly down across the board because of a struggling debt situation. dollar/yen 90.74. euro/dollar, 1.4406. sterling/dollar, 1.6299. euro/sterling, 0.8el 38. item, jpmorgan will be reimportant pewout technology. and and i'd be very surprised if jpmorgan doesn't come out with a good number. they took an 85 perls cut in the dividend last year. that is going to be fiscally sensitive. it brings back this issue for their shareholders. from what we've heard in the last couple of months, it looks like the form around the latter. at some stage, this bank will want to get back to a dividend pay schedule. whether or not that's today in the light of the banking levee proposals remains to be seen. >> tim, some reports are saying that that obama tax on the banks is likely to produce some big numbers, the likes of general electric because it took some money, had some government support. it could mean up to $800 million over the next ten years. and so on. and it could spread to the international banks. it's not just the u.s. banks that could be taxed. what are the impacts and kwha are you intended consequences, i think, in materials of getting more lending out? >> i do some have sympathy of the tax without representation philosophy where a number of non-u.s. banks with u.s. subsidiaries will fall into this net. of course, these were banks which weren't beneficiaries of t.a.r.p. at the time. that is one unintended consequence. if we loot this as a levy, i draw a parallel with what happened to the tobacco levies and what the u.s. government did there was they taxed future income of the toe packo companies. who ended up paying? the smoker because they passed it on to the price of a packet of cigarettes of tobacco thereafter. the banks will be paying on levelee bates approximated on trade. in underlying terms, i think the banks will be pushing up against risk limits and will be looking to optimize their relative balance sheets going ahead. does that give an unfair advantage to the non-u.s. world relative to the u.s. world? well, the world is still pulling itself together. i think this is why the americans are anxiousus to talk to european and asian cousins to see what response comes through here. we've seen from the french madam lagarde has said that the tax on bonuses are is a smart response in the short-term. >> but you know, the interesting things that everybody talks about is that these taxes and this regulation is harchlerring what everybody was wanting to hoop. they had, look, we can't lend as easily now. so if we put out a dollar for someone who doesn't have great credit who might need it the most, b we actually have to haveed 2 on hand to cover it and you can't make money that way. so will that's levys increase that pressure? >> well, the levy is a my. clearly, there is a desire that the come assumer for the gap is closed. having said that, it's nonperforming loans. pvk, the dash we had for lending through the next decade, credit quality rch sh sub-diawed. we're whack r back to a more normal world. there's something that allow is banks to trade in a more normal cycle. i think what the world doesn't want is tz auto repeat of the ventures we've had over the last few years. >> tim, hold tight. that's great stuff. you're going to stick with us throughout the hour. we8 have more on banks a little later because this is something that's going to impact the rest of the global banking system and raises questions whether we'll see some banking move to asia with all of this pressure in the here west. >> also, there will be some possible action on bonuses. we would like to hau from you. snow u.s. treasury secretary timothy geithner speaks to cnbc. he says the bank tax won't damage the economy and is a fair way to reimburse taxpayers for the bailout. and if you're wondering which is the cheapest stock market in the world, we're told it's russia. charts show that there is great potential there. but watch out for the price of oil. all that and much more on cnbc.com. >> and welcome back to "worldwide exchange." let's do a quick check on the commodities picture. start with gold first and see how the yellow metal is stacking up at this point in the trading day. down $3.895, $1134.05 an ounce. crude oil is pulling back, as well, down 58 cents, $78.88 a barrel. weaker as far as brent is concerned, down 57 cents, $78 even a barrel, ross. >> meanwhile, christine, ahead of the u.s. open, global stocks are trying to be a bit firmer. here in europe, we're two hours into the trading day. we've had gains in most of the morning. we'll bring you up to speed with what's driving us. becky has the details. >> flat as a pan calk for the ftse is 100 now. on the exterior, on the inside, though, there's all sorts going on. pearson, the shares have been strong all morning. 1.7% higher at this stage of the day. there's reports in the financial times overnight suggesting that its idc units of which pearson is a majority shareholder is courting potential buyerses for that business.. this morning, pearson came out and said that idg is reviewing its strategic options. pearson is a provider of financial data and analysis. pretty sizable unit, as well, as far as shares that are gaining as a result. experion is a bit of a gainer today. they came out and said they see improvement in the american markets. but it's the world's largest figures this morning. they told us that their assets are down by 4%. even though they've told us in their conference call that historically things aren't as bad as peeble may be assuming. now, the shares aren't doing very well at all, down over 5.5%. sylvia, how is it going in germany? >> well, there is a bit of a push from the futures market. we've seen that one coming. the future turned around and they're testing the down side here. there is insecurities in the markets, yes, about the retail sales in the u.s., about the way the banking industry st going with all these new shadows on there. but other than that, there's not really anything to rock the b t boat. in terms of the corporate, we keep playing musical chairs with one day up, one day down. today, you can see broadly, defensive stocks are moving today. >> now for a quick look at some of the markets we're watching here in asia, the nikkei 225 up 0.7%. 15-month closing high. we had the kospi closing up 1% led by a rally in tech shares. and ship building stocks, that hit a fresh historical high to close 1.8% higher. the announcement is seen as a move to set up a high threshold to curve the risk coming into the market. the hang seng is the only market in the red today. in australia, the s&p/asx 200 is ending pretty much flat with financials helping to lift the market. on that note, let me wrap it up and put it to you, bertha? >> no. we'll discuss what the european cousins think about the bank tax after the break. stay with us. everything okay? i work for a different insurance company. my auto policy's just getting a little too expensive. with progressive, you get the "name your price" option, so we build a policy to fit your budget. wow! the price gun. ♪ ah! wish we had this. we'd just tell people what to pay. yeah, we're the only ones that do. i love your insurance! bill? tom? hey! it's an office party! the freedom to name your price. only from progressive. call or click today. what are you doing...? calling chase sapphire, seeing if we have enough points to stay longer. now? you don't have enough time... and you have to push all those buttons... no buttons, someone answers every time. yeah, right... bet you a massage... yeah, ok. hi, julie... i have a question about my points. hi, what button do i press for a massage? hello? new chase sapphire... you call. we answer. no waiting. just press right here... go to chase.com/sapphire. chase what matters. welcome back. it's about 5:18 in new york city. that's times square. it's kind of empty about let's say six, seven, eight blocks away from there to the east, jpmorgan headquarters, they will be headlining this morning. we've got dow futures a little bit above fair value. the nasdaq futures are looking better with intel having reported blowout earnings that have likely supported tech stokes. they have certain across the board. u.s. investors get a trio of economic reports, as well. both the overall cpi and the core rate are forecast to have risen 0.9%. cpi numbers will be out and that's expected to have rich 0.6%. then at 0 o'clock a.m., consumer sentiment will be out. analysts are looking for a number of 74, up 0.5% from december. then at 12:30 p.m., richmond fed president jeffrey lacker will be talking about the economic outlook. he is not a voter this year on the fomc. president obama is charging financial institutions up to $117 billion to try and recoup the cost of the government's funded bailout at the height of the crisis. reports of big bonuses have heightened his results to get the taxpayers money back. >> my commitment is to recover every single time the american people are owed and my determination to achieve this goal is only heightened when i see reports of massive profits and obscene bonuses to some of the firms that owe their existence to the american people. >> john harwood then suppose exclusively to treasury secretary timothy geithner. >> it's very important for those people running these firms, for their boards of directors, for their shareholders to work very hard to try to earn back some basic sense of trust and confidence in the american time. >> and, of course, these plans come on top of the policy and resources economy, the worpt of london. of course, tim harris is still with us, as well. stewart, if i can get your view first of all, we were very worried here in london. of course, the bonus tax wab going too drive business away. in some sense, now that the president has announced this sort of bank levy, it may make you happy. as long as everybody is taxing, it's maybe better phenomenon competition. >> obama's is basically a windfall tax. the tax in the uk is designed to stop people, highly paid people getting bonuses. but you're right in a sense, that take a little bit of appreciate yuf avenue of london. as as we've already said -- we understand that the tax in the uk will cost airlines up to $11 billion. it's more punitive than the government tax that the uk government launched. >> for the u.s. banks, you're absolutely right and demonstrates a need for some idea about global coordination of taxation because of the cross borders through banking, you can get people getting taxed twice, if you like. christian, the french government plans to recovery some of those numbers, as well. but it's just peanuts compared to what they're doing in the u.s. do you think they're looking at this saying, oh, maybe they can do this, as well. >> i don't know. but the obama tax is good news, i would say. we are still far away from the level playing field. even if here in europe, if the greater system are not so far from each other, i think we have to improve our growth within asia, within the g-20. >> what do you want to see, then? >> what i want to see is that in pittsburgh the debate was open on this issue. and, you know, i think that the u.s. tax, my british colleagues say that it is a windfall tax with a u.s. tax which is going to last for ten years or more. and, you know, we don't know whether the french tax rt english tax is going to last for ten years. therefore, there are still big differences across the atlantic and achose the channel. i will say let's look at full convergence. this shows we have to improve our level on this issue. >> gentlemen, one thing i wonder is what impact will this have on lending? that's the big concern, that if you hamper us with all this onerous regulation, all this regulation with regard to having to have really high reserves, higher than we're accustom to, that is going to make it harder for us to lend. and if you put on this big he have xcisi, you'll have to around for your actions. >> i think in europe, there's a dress capital coming up and put together could seriously damage the economy of europe. i would stress here that we are in a competitive pog. pearis competes with london. new york with london. europe competes with the rest of the world, as well. so the idea of total convergence, in my view, is never going to happen. what we need to do is narrow the differences as much as possible. >> gentlemen, this is christine here. go ahead, christian. do you want to respond to that? >> no i didn't say total convergence. i did say greater converge yaps. the british tax could be important but we have to deal with the total subject and we have to take into account -- i would say that is regulation which is going to rerevised in light of the crisis and we have to articulate regulation, which is going to go out on this crisis. in the short-term, it would be bad for key credits. but in the long run, we ask to improve the tax on the regulatory system and therefore, there is the creditors. >> christian, stewart, i'm sitting out here in u.s. and am looking at you goose in the uk, in the france and the u.s. does this somehow pick up on the asian banks loading the market with cash at the moment. stewart, your view? >> you're rightly right. protective. although there maub some consense yuts the in europe. it will happen. they will challenge us. what we want to make sure is that we are competitive and is can can play on a level playing field. at the present moment, we will drive the talent from the west to the east and i think that is a big mistake for the european union and for the united states. >> all right. stewart, good point to make. thank you very much for that. christian, thank you very much, as well. and coming up next on the show, intel's fourth quarter earnings rolled past fourth quarter expectations due to strong results. does this indicate the tech sector is well and away inspect this and more, after the break. hello. welcome to "worldwide exchange." in the headlines at this hour, here in the u.s., tech may get a boost today from intel's blowout results as investors await earnings from jpmorgan. >> here in europe, banks are waking up to the relation they may have to pay billions for obama's bank tax. and investors in asia still doubt the strength of the recovery. good morning to you. if you're waking up to us here in the u.s., thanks for joining us on "worldwide exchange." looking at the furps, they've been trading at a fairly tight range. right now, they continue to be above fair value. the nasdaq looking stronger on the back of those strong results from technology titan intel, which forecasts that things are going to be better. in fact, it's going to be hiring. we've got a lot of data, as well, and the big headline of the day, ross, will be jpmorgan's results ahead of the open. >> and we'll talk about that in more detail a little later. right now, european markets run. they wasn't make up their minds how far they want to get. the xetra dax has now turned more negative. in terms of sectors, it's fairly mixed performance this morning. the winners include retail, media and leisure. >> ross, the dollar is looking pretty much mixed across the board. dollar weaker across the yen, 90.70. the dollar is stronger against the euro simply because of the situation with greece and that is weighing on the euro. sterling/dollar, 1.6279. euro/sterling wsh 0.8836. >> christine, joining us this guest our half hour, michael gushg ya. and still with us, our guest host this hour, tim harris, ceo of harris capital. tim, i want to get to you in a minute because i know you didn't get to play in the last half hour on the issue of banks. we've got jpmorgan earners, whether they're going to reinstate that dividend. but are we going to be able to get past the sound and the furry over the bonuses and the new banking tax that president obama wants to impose? >> i think it will be tough. some of that testimony that we had in the last 48 hours is going to resinate for a while. these are the banks that helped us get to where we are and many people want to blame them for where we went. jpmorgan, you have a very conservative structure over there and less than a risk aversion scenario. so the promise has been kind of built into the market as we want to expect. things will turn out okay. being an industry leader like intel is, jpmorgan can take that same backtrack, sprinkle in good economic numbers running through the fire today. and a lot of people did look for this earnings week to not dis appoint due to lower balance sheets and clean payrolls. >> and the previous banks were talking about banks and all this going on in europe. >> yes. in particular, the real estate market. but i have to address the scenario that we've also picked up this week, that the banks themselves and china are starting to get more regulation coming in because they are aware of some adverse conditions that could lead us to the scenarios that we saw 12 months ago over here on the western side. and i think what that means is basically that we're looking for a lot of these emerging economies that have such an amount of capital flow from and to china that could reverb rate into those markets, also. and i'm thinking right now, at least, that those are the type of measures on a global perspective that we like to see. and we want to get some adherence to curb those standards of lending so that hyper inflation doesn't start leading itself into these ridiculous assumptions because of booking the books and that standpoint. part of the stamt in the markets helps trickle into some of these investments i see, especially in technology, but of course in banking. >> go along with that, tim? >> yes, i think so. let's look broadly at where the market is going. because it is now earnings season that we're looking at. i think from the top line and bottom line points of view, you can be quite optimistic in the short-term subject to where inventories are moving and are where trade is moving. could give you a 5% print in nominal terms. and asia goes without saying. running into the new year quarter on quarter, that means earnings momentum will be positive, as well. as the head winds gary, withdraw a stimulus is a big one and is priced in inflation linked products. as that comes as a headwind next year, then i think as we see the yield curve taking the 10-year money towards the 5 handle, that would be a headwind for the equity valuation and the equity market mechanism. at the moment, we have valuations which are fair, not expensive. if earnings come in strong, that's fine. if you start getting the head winds which is risk free rates or the hurdle rate rising, then that is -- rink in the short-term, even if you're at the wror consrveive part. do you think that suggests this year to be different? >> the wh is rex rat right now. but by the end of the year, are we back to a flatter scenario? i know the fixed income market. i get excited hearing you talk about 5% on the ten year because it seals seems like it's going to be forever till we see that. working in these decades, we got used to these prices a little too easy right now. but the fed funds rate is near zero. i think right now there seems to be a premise that the equity market will survival pretty well for a couple of quarters at least because the thirst for yield is showing itself in a couple of places. we cook ourselves too high in the commodity index and all of a study that's r that becomes a problem. what do you think about the middle of the earnings right now? >> to your first point in terms of flows, i think fund managers and hedge fund managers are what they and they invest. i think at this stage of the year, that in itself demands that the money will be putting itself to work. and retail money will follow that. i think if joy public sees life looking at a fairly benign stage of events, from a bov, we're in reasonable shape. i mean, we are talking about curves that she claerl clearly wants to ride this year. >> michael, i want to hold it on that point. we are going to come back and have more discussion. terrific discussion, you two, and you will be staying on with us for the hour. michael gurka and timt harris. we have much more to come on the the jamts bond froes? first round bid are tu today. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. 154 are tracking shipments on a train. 33 are iming on a ferry. and 1300 are secretly checking email on vacation. that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. right now get a free 3g/4g device for your laptop. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com. welcome back to cnbc's "worldwide exchange." here are some of the top stories that we've been watching from around the world. first round bids are due today for the famed but perennially troubled mgm studios. the eventual winner will gain the rights to the james bond franchise, half the rights to the lord of rings movies. it can refocus gm on making movies again. last year, after it cut a deal with creditors to halt interest payments, there wasn't much cash left. so mgm had the release of only one movie, "235i78." the video game industry closed out a tough 2009 numbers. same of game consoles surgeoned. the nintendo wii, the top holiday seller. nintendo's new super mario brothers was amongst the top sellers. forget that war game, call of duty, that's supposed to be the big one that everybody likes, but not in your house, ross. >> not in my house. there's nothing like that in my house. you're never going to get daughters playing call of duty, are you? right? it ain't going to happen. >> i can't imagine that. >> no. i have to go to friend's who has boys. russia based rusal has a plan to raise up to $2.6 billion in the listing. its shares will debut in hong kong and harris on january 27th. according to reuters sources, 40% of the offering has been described by cornerstone investors with the remaining share being scooped up by institutional ones. >> there is a 50/50 chance the state will increase its stake in renault just over 15%. that comes amid concerns about jo jobs. >> japan's sheshido is snapd snet set for the takeover of $1.6 billion worth of bridge loans from banks. it's offering a hefty 40% premium. >> obviously, the stock price is depressed, the seller is not as willing to sell. so you have to find a mid point where both sides are, you know, satisfied with the upside as well as the downsides. >> well, sheshido shares jumped on the news, but standard & poors are placing the company on credit watch negative saying it may become financially unsound. a final thought from tim harris. we talked about techs. i want to wrap up the bank discussion. as a group, would you buy them not or not buy them? do you have to be very individual. >> financials are 20 pacific northwest of the recapitalizati recapitalization. i think real estate plays might be more interesting going ahead. if the world becomes a safer place mid year, that is the sector that will turn. we're not differentiating between the good stuff and the bad stuff. it's all rising and falling together. they've got a few good quarters of trading ahead of them. >> everybody else is saying you have to start differentiating between the good and bad stuff in over other sector. >> we've been saying that all the wayer through the try cuss. but read annoy. about do paem start it's more of a tom bhiker anticipates mountain. that isn't saying the market is going to run out of pass. that's another subject. right now, i think the banking sector has a bit of a boost left to it. >> kim harris, thank you so much. "squawk box" will be under way in just under 13 minutes. carl is with us to tell us what's coming up today. morning, carl. >> hey, ross. we continue to watch those intel results knocking the cover off the ball again tonight. jpmorgan is on deck again today. markets will be looking to that report some the open iing bells today abdomen as well. clint yinton will join us lye to talk about haiti, and the pictures coming out of that country at 7:00 a.m. new york time. austin goulsby, chief economist of the president's economic recovery board and pimco's ceo, another big lineup to wrap up an eventful week, ross. we will start it all off in about 12 minutes at the top of the hour. >> it doesn't stop. thanks, carl. looking forward to the program. coming up, we're going to bring back michael gurka and see what he has to do about jm morgan and intel. all right. we've got a trio of economic reports to wrap up the trading week. consumer price index due out at 8:30 new york time. both the overall cpi and the core rate are forecast to be up 0.1%. 9:15, we get industrial production numbers, expected to be up 0.6%. then mid morning, consumer senment, we're expecting a reading of about 74. let's get reaction now from michael gurka? it seems like we're getting more noise these days when it comes to jobs data and consumer data. >> it's definitely been more positive. one you didn't mention in there is empire manufacturing. that is something i'm really keeping an eye on. canada just showed us this week that some of their manufacturing numbers have spiked higher as a who whole. i'm not trying to start a transition. but i would not be surprised if we start seeing the nasdaq trying to look at this 218 had level as the next target to the up side. i'm finding a nice receiptspy here for a bull kish sentiment. but when we start finding these facts, i think he cans rs are stul clearly going to this is where the breakfast cell expectation could pick up. you know, you talk about ip dilg. they're petting pugging right 2010 and the market is going, oh, he, yeah. >> surprising. i marine, when you can get nfrt quarterback within, this is the lai and then as far as competition, start getting near those type of results. but again, what i look at from a global perspective is this is exactly what happens with top deer companies that spill into other markets. this is one of the yoens why we're starting to see this continuance of an upside channel and no breakouts to the downside twhb that is. i mentioned taiwan because we're against advance iing people. that just, for me, is another why why i start to remain stable. >> michael, are you making any overseas investments here in asia? >> clearly, any of the offshoots from china is very interesting to me. i think australia is starting to look lightly appetizing. i'm looking it from an etf standpoint and the equity minimum them i see more asset information into that. i think more and more institutions are starting to put more faith in and i think it's because of a compliance standard. i think right now at least we have a lot more transparency. at least what happens is i think much like south america where i look on frut plays, especially on deal, started to show you that the unanimous far an ex order facilitier. we'll start seeing results off those orders in the next couple of quarters. >> terrific, michael. thanks so much for joining us and waking up in chicago. taking a look at the futures, they're still in a tight range here. the you're tlading today, consider sending some of their proceedings. i'm bertha coombs here in the u.s. >> and i'm brian shactman here in april. thanks for watching "worldwide exchange." hi, may i help you? we're shopping for car insurance, and our friends said we should start here. good friends -- we compare our progressive direct rates, apples to apples, against other top companies, to help you get the best price. how do you do that? with a touch of this button. can i try that? 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