the box bay sensex down 1% and the aussie market up 1.8%. cnbc ftse global 300 index, up magically, 4,351. ross, good to see you. >> hi, christine. i'm a very happy bunny today. this is it, this is the team, right? me, you, nicole. we can move forward. there we go. look at that. >> you're just happy that you've got two women all to yourself. >> you've got it, absolutely. that's fantastic. so we'll on to you, nicole, in just a few moments. after gains yesterday of 1%, down about 0.3% or a little less. travel and leisure are up but it is the bp figures dragging down oil and gas and sectors are worse, as well. nicole, ae have good morning to you. >> a very good morning to you, as well, ross. in the united states, we are looking at major indexes down slidely across the board for the dow, for the nasdaq and for the s&p. this is, of course, coming yesterday after positive manufacturing really helped lift stocks as a major catalyst, but traders, of course, are looking forward to the jobs report on friday. christine. >> good to have you on the show, nicole. a very good warm welcome to you. joining us for the next hour, we have mark matthews from mcquarry capital. he joins us from our hong kong studios. mark, good to have you with us. the rba decision went pretty well with the markets. are you surprised that it didn't have more of a negative impact? >> well, it should have had a positive impact and it did have a positive impact, but the markets did fade today in asia. so, you know, it wasn't created with raptures plus. let's put it that way. >> the rba cited china as a key concern, all these concern about reigning in capital spending. are you surprised that china -- you think the rest of the world should be looking to china for clues the for what it should be doing for monetary policy? >> yes, absolutely, because china was the big credit event last year. they lent 9.5 trillion yuan in new loans. and that is, i don't know, something like 30% of their gdp. that's unprecedented. they don't want that credit bubble. i think i can safely say last year was a credit bubble in china. so they've already said they don't want loans this year, new loans to be in excess of 8 trillion yuan. you don't have to be a rocket scientist to know that there will be less new loan these year than last year. >> and the swing factor is less reason for investors to have risk appetite. is that the take away, mark? >> well, i'm not sure if i would make that direct connection, but last year, the big story was reflation and that was coming primarily from china and the united states. and this year, i think, you know, as we get further beyond the credit crisis, further away from the credit crisis, the reflation starts to fade and we start looking toward a economic recovery and an earnings recovery. and i guess what i'm -- i feel as though we just haven't quite seen the great economic numbers or earnings numbers to give us confidence that we'll make this transition from a huge liquidity boom to, you know, a global economic recovery without being in a sort of no man's land, which i think is where we are right now. >> mark, it's nicole from the united states. have we, though, made that transition from savings to investments? you say that is a trend pup expect to continue, but just yesterday in the i'd, we saw corporate demand for loans fall even though banks have basically made it easier to borrow money. so why is that? what do you make of that? >> transition from savings to investment. well, you know, we have seen it in asia, absolutely, because the deposit rates are so low in banks across asia that people have put all their money in assets, property and stock to mention two that did very well last year. and now you think if you do anticipate some kind of less conducive liquidity environment going forward and eventually tighter rates, then you would want to think that people might revert to savings. but i guess with the rba today, we can assume that we're still some time away from a global tightening. yeah. >> all right. stay with us, mark, if you don't mind. our guest host for the morning. thank you so much. we continue with some headlines making news in the united states right now. here is what we're following specifically. treasury secretary timothy geithner back on capitol hill today testifying about president obama's budget plan before the senate finance committee. that's about to happen 10:00 in the morning new york time. geithner won't be the only administration official. paul volcker will appear at 2:30 p.m. to talk about the president's proposed rules. risky trading practices should be curved and is urging international consensus on restricting commercial bank activities. and the big automakers report january auto sales today which could show the first impact toyota's massive recall is having on its numbers. toyota could post a sharp drop after it halted sales of the most popular vehicles last week, including the camry and the honda. u.s. consumers tend to cross shop between the japanese automakers. hyundai may also get a boost. ford and gm are expected to forecast double digit sales gains. christine. >> nicole, and a first pickup public comment from toyota headquarters, he says he did not know the extent of the damage on the bottom line, but admitted that he is concerned about future shares. >> translator: in recalls of the past, sales usually fell 20% in the first month and gradually recovered. so this is a first for us and this is the first time we have worried customers to this degree. i'm worried that there will be a slightly bigger impact. >> well, sasaki said he will monitor sales before reviewing toyota's 2010 target, adding that q3 results are still due on thursday. meanwhile, toyota says the worldwide recall of vehicles with accelerator problems has swelled to more than 9 million units. overnight, the company announced it would restart production of eight models in north america, boosting shares of toyota by 4.5% in tokyo trade today, 3,605 japanese yen. staying in japan, we have a couple of earnings to tell you about today. we have nomura holdings posting a smaller than expected quarterly profit in the quarter. japan's top broker remains confident it will post a for the year ending in march. japan's third largest cell phone company by subscriber numbers, soft ddz bank, says they jumped strongly due to apple iphone sales. bhb is warning up and telling investors not to expect a strong recovery. the ceo says not to expect that strong growth to continue. elsewhere, tony heyward told us that cost cutting was very much in focus and he doesn't expect a strong economic recovery. we'll get more from bp's ceo coming up on the program. and a danish pharmaceutical group novo nordisk has post ed its 2010 outlook. operating profit for this year is expected to increase by around 10%, as well. the management is fairly satisfied, as well, by its diabetes drug in europe after they approved it in january and is now working on getting it launched in the united states and japan. we'll be joined by the ceo of novo nordisk and you can see that interview about abdomen hour from now. still to come on "worldwide exchange," a debt to gdp ratio of 0.111. does the government have what it takes to curb deficits and reign in unemployment? we'll be in madrid after this. we're coming up on 13 minutes past 9:00 local time. let's bring you up to speed about what's happening in local markets. the euro zone government bond slipped initially at the beginning. 10-year bund yield up 2.31%. i'm waiting for the european commission recommendings later on greece's physical reform plan. u.s. treasury is little changed during the asian session, 10-year note nudging up 3.66% at the moment. the adp payroll report is going to be key later this week ahead of the nonemployment report on friday. christine, how are we doing in the currency? >> the dollar is looking pretty mixed ross. right now, the dollar is weaker against the yen and stronger against the euro, 1.3924. sterling/dollar, 1.5913. and euro/sterlth, 0.8747. >> the national association of realtors releases december pending home sales numbers at 10:00. this is considering a leading number because it measures signed contracts. also last month, the package delivery giant raised its fourth quarter outlook for u.p.s. other companies reporting include dow chemical, dr horton and hershey, marathon and whirl pool will report after the. after the close, we'll get numbers from aflac, metlife and newscorp. people are expected to gather in punxsutawney, pennsylvania. punxsutawney phil will make his weather forecast. if he sees his shadow, we'll get six more weeks of winter. the u.s. national climatic data center, yes, there is such a thing, says phil is only correct about 40% of the time. now, if my handlers were in charge of reading me, i hope they would say i'm correct 100% of the time, as well. >> i'm just hoping for an early spring. >> six weeks. six weeks, nicole, and the winter would be finished. or ootd six weeks -- >> i know. >> that's impossible. we're only at the beginning of february. winter finishes mid march? >> technically, we're in the middle of the winter solstice. so does it really matter what punxsutawney sees? we're still going to have technically six more weeks of winter. i'm just saying. >> yeah, exactly. hey, it's as good as any other forecast, though, right? let's take a view of where european stocks are trading right now. up about 1% generally across the board. we start in extra territory this morning. the smi is having a better day. it's really all about the feed, becky. >> it is. it's a dreadful january and we're back on the decline again. it's about 14 points or so for the ftse 100. bp, the biggest decliner and dragging shell with it. bp reported their fourth quarter results today. it doesn't look too bad. fourth quarter profit rose by some 33%. a lot of money, but not as much as had been expected. oil prices helped during the werd, but the numbers weren't as good as expected. now, the disappointment from the figures feeding into the stock because the shares are down by some 3.6% and that is hurting the ftse because of big weighted stocks. they had a very strong operational improvement for their business in 2009. it doesn't look like that will be repeated in 2010. tony heyward, who is in charge of that company, is also saying that the global economic recovery is going to be a long and slow one, so not too upbeat on how the recovery is panning out, either. >> okay. >> one of the biggest gainers on the ftse today, cable and wireless at this stage up over 2%. cable and wireless told us today they are on track to complete the demerger of their worldwide unit by march 26th, which may or may not be in wirchbt depending on how groundhog's day goes, i suppose. >> thanksz very much indeed for that, becky. the zex ra dax is down this morning and patricia is there with the focus and some discussion about siemens. >> they're saying they're going to increase and double their investments until 2012 or investing about 250 million euros. it is renewable energy which is on the top of their agenda and they will build some wind parks in india and the total layest new orders of that country. so very interesting data coming through from siemens on the investment. infineon, commerzbank, deutsche bank all trading up higher. daimler stocks and other car stocks dragging a little bit on the overall inconnection. you've got other stocks in focus this morning. just run us through that. >> ross, it is immune itch re, really. we had preliminary numbers for 2009, much better than expected. fourth quarter, as well, on the after tax as well as the combined ratio with the world's largest re-insurancer. so very good, indeed. the stock traded up 1.2% right after the numbers. but now we're hearing from the ceo about the entire market. and it is still open, apparently, and that is a quote of the ceo of whether they can reach about $2 billion worth of after tax profits. that has dampened sentiment out here. the share buyback program could start in 2010. they said they would not tell the market if they had spoken to warren buffett about possibly increasing his stake in the world's largest re-insurancer. that is why the stocks have turned negative today. volumes today, very low. so people are really waiting for the u.s. open, ross. >> just getting back to the flat line. thanks for that, patricia. carolyn is in zurich. is there anything to do with how swiss consumers feeling better about themselves? >> thajd be part of it. we've got lots of other have good performers on the smi. your swiss performer is up 2% here after the s.e.c. upgraded the stock from neutral. that upgrade, that was part of a general reraiding of the broader insurance sector. hsbc says that balance sheets and solvency sheets have shown improvement. swiss re also moving higher by 1.5% after very good figures from munich re. >> we also had an upgrade, as well, from hsbc. >> yes, i just mentioned that. that was swiss life. they upgraded that stock from underweight to neutral. let me mention that the earnings in the next few days, tomorrow will have numbers for roche. we're expecting a slight decrease down by roughly 8%. revenues are expected to grow by 8%. we'll hear from julius baer, and zurich financial in the next few days. >> thanks very much for that, carolin. spain's unemployment continues to climb. jobless rates from 3% in february and that's taken unemployment to just below 20% of the population. stephane, we saw yesterday when we looked at the manufacturing pmi how much spain was still sort of falling behind in this two-speed europe. what is -- what are they saying about public policy? >> you know, among the largest european countries, spain has been probably the most heavily impacted by the prices, ross. and there are two reasons for that. the first one, of course, is the global financial crisis. the second one, and that's most specific to spain, is the collapse of the real estate bubble, which accounted for 6% of the gdp and 12% of the unemployment in this country. since the beginning of the crisis, more than 1 million people lost their jobs in the sector bringing the total unemployment rate to 19% and that's, of course, a record level in this country. now, there's another issue, 2009 budget deficit is 11.4% of gdp last year. the government has unveiled a plan just before the weekend to lower public spending by 50 billion euros within the next four years with a clear target to bring back the level of public deficit by 2% in 2013. that's ambitious. would the plan be enough to reach this target? that's the question, really. and there's a risk that this plan will tackle the economic activity and recovery in spain because we're not expecting economy growth this year in spain. the recovery will not take place before next year and that is also one exception. spain will be the only of the largest economies in europe not to have growth in 2010. ross. >> stephane, we'll talk to you a little bit more later. christine. >> ross, still with us, mark matthews from mcquarry national securities. mark, first it was greece now spain. do you possibly see a debt crisis happening all around the world? is that going to happen? >> well, christine, i only look at asia as far as economies go and stocks. but i would say it does remind me of a lot of crises where you think, oh, this doesn't have anything to do with me. i remember unfortunately thinking that way about the subprime crisis back in 2006 when we first started hearing about problems with subprime credit in the u.s. and iceland, i remember when they first started talking about iceland thinking, that's awfully far away. but then, fink back further, i was in thailand at the time and asia has a lot to do with the rest of the world. but this is how crises happen and it's one of the reasons why markets have suddenly headed south over the last few weeks. >> markets are strange creatures these days. mark, continue to stay with us. mark matthews from mcquarry capital securities. ross, nicole. >> thanks, christine. we have a little construction program coming out of the uk. >> and instant analysis, of course, right after the break. president obama tries to straddle the line between a soaring deficit and a shaky recovery. we're going to discuss whether or not he's 3.8 trillion budget can do the trick. this is krvenz's "worldwide exchange." the headlines from around the globe. >> the bank of australia shocked market by leaving rates unchanged at 3.75%. >> here in europe, spain tells cnbc that its austerity measures are realistic, although painful. >> in the united states, it's groundhog day. will the united states see its shadow? automakers get a boost as they report january sales today. you're watching cnbc's "worldwide exchange." christine tan, nicole and myself, ross westgate. stock markets today are trying to get back to the flat line in europe. bp would be the main drag. their numbers came out this morning and disappointed. the ftse cnbc global 300 has bounced off the lows, 11 points. european stocks, as i say, getting back to the flat level. we had gains around 1%. maybe february will kick off -- certainly it did kick off in a better status than yesterday. christine, what's happening over in your part of the world? >> ross, it's a mixed session. a lot of focus is on the rba to hold rates stud steady. the nikkei 225 up 1.6%. toyota detailing plans on how to fix its vehicles helped the market. the hang seng up magically, 1.1%. of course, new share supplies are weighing on the greater china markets. the kospi is down 0.7%. the bombay sensex trading up more than 1% and the aussie market getting a lift on the rba rate decision to hold rates steady one 178%. nicole, always good to see you. >> good to see you, as well, christine. here in the united states, it's about 4:00 in the morning and futures are up slightly. yesterday we saw a boost because of positive manufacturing sales, not only in the i'd, but globally we saw the dow rising 1.2%, the s&p 1.4% and the nasdaq 1.1%. but it is pending home sales today, ross, and factory orders, another big day in washington as a lot of traders are going to be looking to capitol hill where paul volcker will be appearing. just yesterday, bank stocks soared just a little bit with reports that the plan would be knocked down by republican opposition. so we'll definitely be watching for that. >> that was something certainly that would come out for plans on banks. sarah hewin, i want to pick up on this rba decision to keep cash rates steady. besides talking about china, they also noted concerned over sovereign debt abroad. it seems like concerns about debt problems in the euro zone is having a bigger impact. >> yes. there's obviously been very significant impact here in the region and we've seen the euro come under sustained pressure as a result of problems really focusing very much on greece. but it's interesting that the rba is thinking about sovereign risk as a sort of global concern. i guess that the worry is rates are generally moving higher asterisks are arising. then central banks don't want to contribute to that by making their own policy rate hikes. we're hearing more today. we're in madrid today so we're hearing from spain and what their austerity measures are. what are the implications of this in terms of just how long low interest rate possibly is going to remain and possibly any extension of liquidity measures? >> well, i think that the markets got ahead of themselves in anticipating that there would be tightening moves across the major markets this year. obviously, spain was in a decision situation. their recession was muting and obviously, we had had the rate hikes already. i think what they're saying is they're pausing, they're waiting to see the impact of previous rate hikes. of course, within australia, market rates have risen somewhat higher than policy rates. so there is already a tightening impact there. elsewhere, we don't see inflation pressures arising. we think that economic recovery is on track, but we're certainly expecting that rates will stay on hold in the u.s., in the euro area and in the uk until 2011. >> sarah, the rba citing china spending as part of the reason for keeping rates steady. do you think that the rest of the central banks around the world should look at china when deciding monetary policy? >> i wonder whether too much is being made of the china tightening moves. i think what's happening so far is that china is policing its monetary policy rather than moving to a tightening position. policy is accommodating from where we stand. the main move is to make sure that most of the lending in china doesn't get bunched up into the first half of the year or even the first few months of the year. the operations are looking for extended lending that is going on throughout 200. so i don't think we need to make too much about china tightening policy. we don't need to worry that china is suddenly going to griped to a halt as a result of the policy moves that we've seen there. >> hi, it's mark matthews here, miss hewin. i heard the commentator in spain saying their inflation rate is approaching 20%. how much higher do you think that could go? sorry, the unemployment rate in spain. at what point does that become a social issue? >> i mean, unemployment in spain, unfortunately, was very high before they had their recent boom and we're seeing the impact now of the downturn in the construction business, the downturn in the property markets. the economy is starting to turn around, but it's still very, very weak, especially compared with other economies in the region. it suggests that unemployment is going to edge higher still. it's a big problem, but spain has to deal with its fiscal deficit in the same way all area countries are under pressure from the european commission to cut their deficits. so i think, you know, we are likely to see, unfortunately, unemployment edging up further in spain, even from current high levels. >> sarah, it's nicole in the united states. we are looking ahead to a big jobs report, of course, on friday. the dow jones is saying that report is going to be flat, but you're saying it's going to be distorted because of the census. so a lot of people are trying to read a lot into it. are we making too much of it? is it a nonnumber because of that distortion? >> i think the distortions are going to be quite confusing on friday. but also as of the next couple of months, it's difficult to see what the impact of the consensus is going to be. what we'll be looking at in particular is what happens to private sector job creation or job losses more likely. the job losses last month were of the order of about 60,000. over the past three months, job losses in the private sector have been around 40,000. so we would expect a similar result to be released on friday. anything much better than that would suggest that taking aside the census impact, the employment situation is on an upturn. >> sarah, we'll leave it there. thanks very much, sarah hewin, standard chartered. now, europe's biggest oil company, bp, has missed profit forecasts in the fourth quarter. steve sedgwick caught up with the ceo to find out why the markets were where they were. >> i don't think the markets understood how tough it was for the fourth quarter. refining margins were the most difficult than they had been in years. everyone else has reported a loss, we reported a small profit and with where the market was, it was all in the downstream. so i think operationally, it was a strong quarter, actually. >> given the concerns you've been talking about with downstreaming refinery, is it still worth bp being a downstream player? >> we've done a lot over the last five or six years, actually, and have created a portfolio refineries that are scaling in complexity. there are areas where there is quite significant integration with our business such as in the midwest and on the west coast. so while it's clearly very challenging, we're going to continue to focus, to get the portfolio to deliver. >> and how are you guiding for the refining downstream operations for 2010? >> i'm very bearish on the downstream in 2010. there is significant refining in overcapacity in the atlantic basin market pt. it requires a large number of smaller, less complex refineries to ultimately be shut in. that will take time. >> an impressive 4 million barrels a day production for 2009. 4% higher year on year, but you're guiding lower on upstream for 2010. why is that? >> we had a great year in 2009. production was up over the 4%. we've said all along that our long-term growth rate is 1% to 2%. as we look at 2010, we're guiding in line with what we had from a year ago but in particular, we had the benefit of in hurricanes in 2009, which we done expect to occur in 2010. so i think production is on track. it's just that we had a spectacularly good year in 20309. >> let's talk about iraq. you signed a deal last year for access to a field. but there are political and legal challenges to this. do you see this deal threatened? >> i think we'll continue to see the challenge periodically from individuals. the challenge is that during the quarter day from individuals, not from a party or a section of government. my assessment is that at the senior level in iraq, what they've done has widespread support and we're getting on with getting into action on the ground. and i think as the country sees the benefits of what we're bringing and the cash flow starts flowing, they'll probably become more and more comfortable with the impact we can with make. >> you say it's good for the iraqiy people. but is it good for bp the? you're only making a couple dollars per barrel. >> the reason that we can expect a couple dollars a barrel is the oil is very cheap to develop. this is low cost, easy middle eastern oil. >> you took out $4 billion of costs in 2009. are you still going to be cost cutting in 2010, given that apparently we're seeing an economic recovery? >> well, we're certainly going the take opportunity to grow in a growing economy if we have a growing economy. i have to say personally we think this recovery will be slow and gradual. but the big point is that we have a lot to do in terms of efficiency. the oil and gas sector is not the most efficient industrial sector. so my view is there's plenty more to do. >> as regarding alternatives, you have a portfolio of assets. is this the right portfolio because there will be a lot of blind alleys on the alternative route. >> well, about 18 months ago, we were pursuing thousands of alternatives. about a year ago, we focused on the things that we believe can make a big difference, a big difference to bp and a big difference in the world on things that we can do. >> and that was tony hayward, ceo. coming up, the reserve bank of australian surprising with its decision to keep rates on hold. are they seeing increased risks of a double dip? before we go, here is a quick look at how the aussie dollar is doing. and welcome back to "worldwide exchange." it's 5:43 in singapore. you're looking at a shot of the hong kong harbor. it is 40 degrees celsius and it's looking mighty cloudy, as you can see. i hope it's clear skies over in tokyo. let's cross live to the city there and check in on the trading day with nozomu kitadai with the trading day. kitadai-san. >> thank you, christine. the nikkei finished 1.6% higher fueled by short coverings and automakers. toyota lost about 18% in the past seven sessions. investors raced back to buy toyota shares after it announced yesterday that it expects to resume production of eight u.s. models subject to a recall. analysts warn, however, that the fallout from the recall remains unclear. with recalls in the u.s., canada, europe and china expected to cover more than 7 million vehicles, auto industry experts estimate their total cost at $100 billion to $200 billion yen. toyota will likely ended adding to the hundreds of billions of yen set aside in reserves for the recall related expenses. toyota's executive vice president told the pretty here today that the firm sales in the u.s. and around the world will likely be hit severely in the wake of the biggest ever recall. in other news, soft accent said it bought shares in a california based firm that allows users to stream live video over the internet on handheld devices. the mobile tire took a stake around $20 million with an option to increase its holdings. softbank, sole carrier of the iphone here plan toes launch the japanese version of the u-stream service later this year. that was the nikkei business report. christine, back to you. >> thank you for that. joining us on some analysis, we have adam gill dd more, head of derivative sales at asia pacific. also still with us is mark matthews, from mcquarry capital securities. adam, do you think the rba made the right decision by keeping rates on hold? >> i think they're overry cautious. just because they didn't hike today doesn't mean they're not going to hike on the last meeting. i think they're worried about what we might call a double dip in the other economies. the events in greece and some of the things that are going on in china have caused a lot of people to start thinking, you know, have would he have we gone overexuberant in the market? and i think people are a little too cautious going back in. the rba is a lot more kaush ynus than the rest of the market is. >> if china was to take more steps to reign in liquidity, to tighten bank lending, do you think that would make the rba more reluctant to hike rates at its next meeting? >> it might, but it shouldn't. i look at china as a tanker. it's very hard to move the course of that economy in a short amount of time. and i was in china last week and i can say that everybody is still very bullish over there. people are quite positive and people aren't looking at these measures as overdraconian. you don't so i don't think the rba should focus too heavily on this. >> so a march meeting hike are you expecting? >> i think we will, yes. >> yeah. i want to look at the broader moves here. we saw the moves in the euro down against the dollar. we're concerned about debt problems there, as well, adam. have we seen any unwinding of carry or are we re appraiapprai what yield differentials are going to be? >> i think a lot of carry is being put back on. i think people are focused on risk. people are looking at yield and risk and right now, risk seems to be center of play and, you know, it's obvious the way the correlations of all the assets that are considered risky and moving together, people are very focused on that. >> do you think that the aussie is a good buy still? >> you think you can be cautious, but i'd rather buy it on dips and sell it on rallies. the reason why, everybody thought the rba should hike today. generally positive economics. inflation. we still expect rate hikes will come and i think, you know, it's very hard to take the bottom on the aussie, but i'd rather buy it. >> and it's nicole in the united states. on t back of that idea about inflation, you are saying quite a few people lately have been talking about this double dip recession just in the last week or so. why do you think that is? >> oh, i think there's been some things that have come out that have scared people a bit. i think the data coming out of the u.s. is -- you know, in the last month hasn't been as strong as what people were hoping. there are problems in europe, quite excessive. and the market has been jittery for the last three months. any time there's any kind of bad news coming out, people are risk averse. >> adam, we'll have to leave it there for now. thank you very much. >> thank you. >> adam gilmore, head of deservive sales at citi asia pacific talking to us about the rba decision. mark matthews, from mccowerry capital will continue to stay with us. let's get an update on the receipt of the asian markets starting with a ayesha faridi in mumbai. >> thanks for that, christine. the indian equities started off quiet at least for the sensex and the nifty. not much activity, but you did have specific stock moves. as i speak, we're down about 30 odd points for the day's highs. similar case for the sensex, as well, staring down 1%. and more importantly, it's the mid and the small cap indices which have been outprmping. today it's the similar outperformance that we saw, but currently down about 1.5% for the mid and the small cap index. all the indices in the red, mostly down. it's the entire interest rate sensitive lot that is really at the bottom of the heap. so you've got real estate, banks and autos which started off the day very well on the back of good monthly numbers, but they, too, are staring down. ntbp is lower. so those are the news coming. but you are seeing some bit of volume and that is a bit of a concern right now. with that, it's back to adam in singapo singapore. >> thank you very much, ayesha. we had somewhat of a reversal of fortunes here today. all the equity markets in this region, beth these regions were up in the green following the positive session that we saw on wall street. and then everything turned around in the afternoon trading session. let's start with south korea. the kospi ending with two-month lows down by about 0.7%. the market is getting dragged lower by the exporter stocks. we saw the south korean won versus the u.s. dollar. we saw a fair amount of profit taking on the back of the auto stocks. and remember, we have the auto sales numbers coming out before the market broke yesterday. everybody was jumping into hyundai motors and kia motors. meanwhile, the tech stocks came under quite a bit of pressure. particularly, highlink semi conductor. there was speculation that the hanwah shares may step in to buy the company. a company spokesman said there is no way they'll be looking for a bid in that country. meanwhile, the crossstraits nded another day down, down 12 out of 14 sessions since this index started about two weeks ago. it's a weak session overall. >> the earnings on these two countries are looking pretty good. what's going on? >> that's right. but of course, everybody is wondering, remember, these earnings are coming off a very low base when you compare it year on year. the analysts i've spoken to say we have to wait until really the secretary quarter of 2010 when you're comparing these figures year on year and there continues to be lingering concerns about potential slowdown in china been we saw volumes in that market really sap. they came quite low today. so we saw weakness in the brokerage stocks and there's a lot of concerns that after the lunar holidays, christine, that we could see the chinese authorities clamp down on that bank lending and, of course, introduce more measures to stem the absolutely record pace of loan growth that we've seen in the china bank, at least in the first half of january 2010. >> that would be three weeks from now because china takes one week off for the chinese new year. >> that's right. and they're paring down trade for the new year. >> thanks very much for that. here in singapore, we're watching the air show kick off today. let's get the latest from martin soong on the ground. >> this is the global understand industry's first big event of the year. commercial big is still fragile. top of the news today, a u.s. had/taiwan arms deal which china is not happy about. over the weekend, china downgraded military ties with the u.s. but this is the first time they're threatening sanctions on military contracts. reaction? several senior officials at boeing are telling us, really, no xhen. it's a government issue. let them sort it out. more positive, though, on the commercial target. we'll hear from airbus tomorrow. jim leahy is briefing the press, but today, talking confidence, saying that they could be increasing selling prices um to 6% this year. full coverage as the singapore air show continues. >> thank you very much for that, martin. don't forget, all of our interviews from the singapore air show can be found in one place, on our website. go to cnbc.com. believe me, it has something interesting interviews. i was there at the air show this morning, and i can tell you that it was hot, very, very hot, but exciting. let's get a final world now from mark. mark, leave us some last thoughts about your investment strategy. what are you looking out for? >> on the one hand, i'm reminded of 1994 because we had a great year in '93 when asian market doubled. i remember so distinctly at the beginning of '94 we were all bulled up because everything was great and all of a sudden, markets fell 20%. and i feel a little bit like that today. but i think the important thing that there are so many attractively priced stocks in asia. i can give you numerous examples of big well run companies. it's anywhere from 25 to 50% discount nav. when i look add stocks, i have no problem recommending specific stocks. when i look at the overall markets, i think we need a catalyst or some story that i just don't see coming. >> where is the catalyst going to come from, mark? >> i don't see it. i think we had the big liquidity event last year. now we need some much better than expected earnings or economic numbers. but we've become so expectant that things are getting better that when we do get economic numbers and when we do get earnings, we're not wowed by themselves. thank you very much. >> mark matthews, from mccowerry capital securities. novo nordisk posted a decline in fourth quarter profits. we'll find out what is behind that optimism when the ceo joins us first here on cnbc. welcome to "worldwide exchange." the headlines making news today in the united states, with it is groundhog's day. will toyota, though, see its shadow? rivals could get a big boost from the automaker's woes as they report january sales today. in europe, spain tells cnbc its austerity measures are realistic, be it painful. >> here in asia, the reserve bank of australian shocked markets by leaving rates unchanged at 3.75%. >> i've just got some ppi data out of the euro zone. the forecast was for no change. producer prices might beus 279% year on year. again, a little stronger than the minus 3% we were looking at for that. charles diva, senior rate strategy in london for nomura international. we're so focused on euro zone debt issues, are there any concerns with inflation that there might be in the uk? >> i think reality is that people are, if you like, shrugging off inflation data in the near term, simply because there are these other concerns and likewise, we know because of base effects that the inflation readings in q1 are going to be elevated. we still have large output gaps. most people are expecting inflation to subside. inflation data is kind of getting ignored at the moment. >> as i said, you're going to be with us for the whole show. we'll come back and talk about the user problems and everybody else still to come. nicole, meanwhile, what's going on with the u.s. market look ahead right now? >> and we have slightly higher in the u.s. markets right now after being slightly lower just about a half an hour ago. the dow looks like it is up by about 5 above fair value. the nasdaq slightly above fair saul and so is the s&p. we have a couple of reports coming out today that we will take a look at pending home sales and factory orders out at 10 in the morning. >> meanwhile, european stock markets two hours into the trading session, we were up yesterday, but we have turned things up, up by about .5% for the dax and cac 40, up about 0.3% for the ftse and 1% for the smi. the weaker sector has been energy and that is mainly due to bp, which some people think may be overdone, christine. >> hey, ross, here in asia, the equity markets are pretty mixed. the dollar is looking slightly mixed, as well. sterling/dollar stands at 1.5926. and euro/sterling, 0.8748. the aussie dollar took a beating today after the australian central bank stunned markets with its cash rate at 3775%. right now, the aussie dollar is lower, 0.88. the australian central bank said it needed time to assess the late rises in 2009 and hefty increases in bank margins. but it left plenty of room for policy tightening in the coming months saying interest rates would need to rise as the economy expected. ross. >> charles diebold is with us for the next hour. charles, let's pick occupy that particular story. not only did the rba cite tighter in china, but it's not just domestic investors they're worried about. this is spreading all over the world. >> absolutely. and, you know, the problem is that it is a western world dynamic. they're all suffering from this, if you like, debt credit policy from this overhang that is forcing a very large debt swap from households and corporates to the government. and, you know, the problem is that that poses significant growth issues longer term. it poses more immediately rollover risk. likewise, there is the overriding risk of investor confidence. if people don't believe that they're going to get it under control, it has negative implications for the debt and the currency markets. >> let's talk about the risk appetite and sentiment on the back of that. there is no end for policymakers telling us monies are going to be low for a long period of time. there are two way toes react to that news. what is the right way to react? >> hoer tends to suggest if they're allowed to get away from it, governments will. they forced up u.s. bonds yields to such an extent, volcker came in to be fed president and it generated this sort of witch-hunt against both deficits and innationary type attitudes and policies. i think in this sense, for the time being, policymakers are sounding like they're listening. you've seen an example with greece in terms of it being punished and the threats of it spreading across europe. that is probably the most compelling reason to think governments will do what is required. obviously, that doesn't alter the fact that it is a very long road back. there is no quick fix, if you look. >> i want to continue with that point, charlie. do you think they will continue to push forward with those countries that don't come forward with correction plans? >> yeah. i think right now bond investors are willing to punish those that don't have credible plans. it's not necessarily that you have to be doing anything right here right now, but the good example here is ireland. they announced a significant austerity budget with and that spending budgets. so as long as countries look like they're putting such plans in place, then they'll be given the benefit of the doubt and thereby bond markets will hold together. if there's any hint of any slippage on that, clearly, i think bond markets will punish them severely. >> charlie diebold, senior rate strategist for nomura international, you're staying with us for the hour. we appreciate that very much. lets continue now with headlines making news around the world. timothy geithner is back on capitol hill today in the united states testifying about president obama's budget plan before the senate finance committee. that's slated to happen at 10:00 in the morning new york time. paul volcker appears at 2:30 p.m. new york time to talk about his viewpoint, as well. also, the big automakers will report january u.s. sales today which could show the first impact toyota's massive recall is having on its numbers. toyota could post a sharp drop after it halted sales of its most popular vehicles last week, including the camry and analysts are concerned that u.s. consumers tend to cross shop between toyota and honda. ford and gm are expected to post double digit gains, as well, christine. this is, of course, a global story. >> it sure is. next, we have comments coming out from toyota's executive headquarters. the toyota vice president says it does not know the extent of the damage on the bottom line, but admitted he is concerned about sales. >> in recalls of the past, sales usually fell 20% in the first month and gradually recovered. so this is a first for us and it is the first time we have worried customers to this degree. i'm worried that there will away slightly bigger impact. >> sasaki says he will monitor sales before reviewing toyota's 2010 targets adding that q3 rultsd are still due on thursday. overthyme night, the company announced that illustrate would restart production of eight models in north america, boosting shares by 155 today to 3,605. >> christine, with europe's biggest stock company had an almost 70% jump in fourth quarter profits, but the ceo says not to expect that growth continue into this year. he also told us cost cutting is very much in focus. we have more from the ceo coming up ahead on the program. novo nordisk has rated 2010 outlook despite posting a decline in fourth quarter profits. sales are up and profit this year is expected to increase by 10%. management has been satisfied by the recent launches of its diabetes drug in europe after the fda approved it in january. joining us for more is the ceo of novo doknonovo nordisk. mr. sorenson, you've raised your forecasts for this year. what's behind that? >> well, the reason why we were able to up forecasts for 2010 slightly was because of the visibility we have of our launch of tosin in the united states. that, of course, gives us a full year of marketing in the u.s. and so that took some of the uncertainty out that we had flagged in connection with our q3 release. >> and mr. sore b son, there are issues regarding pending health care legislation. what sort of effect would the proposed legislation have on you? >> that is correct. i believe that we are one of the only pharmaceutical kpts companies that have tried to calculate what it means and communicated that. we did so in connection with q3 and our current guidance for 2010 does include a negative impact on our business from health care reform between 1% and 2%. if it is different from what we have anticipated, that would away positive for our company short-term. >> mr. sorensen, this is christine in asia. you're proposing a share buyback this year, 2010. do you think it will be a good idea and go down nicely with investors who are still looking for yield in this environment? well, we are, in fact, increasing the yield 25%, so we are suggesting a dividend of 7.5 krona per share, which is off 25% which is in line with other pharmaceutical peers. and in addition to that, we are suggesting a buyback of 7.5 million danish kronas of equity. the idea is to hand back any surplus that we generate and we have been tremendously generating cash in recent years and we're going to continue to do so going faurth. >> the fourth quarter, we were looking at issues with currency markets. is that going to continue to be something that weighs on the company at this year? >> currency markets, yes, certainly. the currencies right now on the spot rate are rather close to the average currency rates that we saw in 2009. so much less so than we have seen in the recent years. we are impacted by the u.s. dollar and the yen and other dollar-related currencies. and we give guidance on those earnings. >> lars, thank you for joining us. nicole. >> still there's more to come on "worldwide exchange." bp shares are one of the biggest decliners in europe today after the company's earnings missed expectations. find out what else is moving markets in our global stock watch right after the break. on cnbc.com now, less than a week after spain announces austerity plans, we're told this is the year spain holds the sedgwick. and toyota's recall of millions of vehicle is taking a toll of sales. the sales are to critical levels. plus, as retiring baby boomers flee to safer investments, some analysts say it will be too many stocks and too few investors. all that and much more on cnbc.com. welcome back to "worldwide exchange." let's do a quick check on gold and oil is -- rose more than $2 yesterday. both of them, let's see how they're doing right now. spot gold down up 3.50, $1108 an ounce and for crude oil, moving higher, 63 cents, $75.08 a barrel and nymex and brent, as well. $73.70 a barrel. ross. >> meanwhile, ahead of the u.s. open, global stocks figures in europe, heading up towards the session highs. the ftse 100 up 0.3%. we're up nearly 1% for the german and french markets. we'll bring you up to speed with what's happening. becky is with me in london. >> there seems to be a general shift, ross. only a handful, really, are lower. bp has been suffering all day long. shares are down after the company meets expectations. elsewhere, basic resources stocks are looking pretty strong at this stage. still, eurasian is higher, lonmin and kazakhmys are all shifting higher. cable and wireless has been a strong performer of the ftse 100 all day. cable and wireless have put out a statement this morning in which they said they are on track to complete the demerger of their worldwide unit by march the 26th. and they announced a bond sales adding up to a strong performance in that company, too. sentiment in germany, patricia? >> we had the second consecutive trading day in positive territory at the closing today. it turned out to be a very strong session. we'll have to wait for the u.s. open, of course, up 0.of%. trading volumes are up to nearly 50 million shares right now. and the trade is coming up over 3.2%. that was spurred by really good news coming from the uk, from arm holdings coming through with their order backlog going up substantially and surprisingly so. and that gave the entire sector quite a bit of a boost this morning. but also, the banking sector looking strongly indeed today with commerzbank up more than 3% and some of the industrials coming through. thyssenkrupp up by 275%. hankel trading down between 0.5% and 1%. over to adam now. >> it's very much a mixed trading picture here in asian markets. they were the top performers. that market is getting a boost from the auto exporters as we saw the u.s. dollar and the euro cover versus the yen. toyota, being in the headlines for several days on the back of a massive recall, and they came out with plans on how to fix 4.5 million vehicles out across europe. although they are a bit concerned about the ramifications following their damage to the reputation for safety and reliability. but the stock still rose about 4.5% there and, of course, we were building up to huge expectations for the earnings season. up this week with the orders and it starts with honda. meanwhile, their shares rebounding up sharp losses the pretty day. we saw strength in the commodities index. after the bell, we got numbers out from nomura holdings, which is japan's largest holdings and investment bank and they saw a sharp recovery in the october to december period from a year ago of massive losses as we booked in big numbers in terms of their commissions for the equity rights issues from several japanese corporations that rushed to raise more money. on that note, eats back to you, nicole, in the u.s. good morning. >> good morning to you. thanks so much. still much more to come on "worldwide exchange." spain was one of the europe's success stories for the property market crash hit the country hard. we take a closer look at spain's economy. [ male announcer ] welcome to the now network, population 49 million. 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 "worldwide exchange." it is just after 5:20 in the united states. you are looking at a live picture of times square where there is always activity in new york city regardless of what time it is. here is a look at the markets right now. they are hovering in positive territory. the dow up about 35 points above fair value. the nasdaq up a little bit before -- above fair value as is the s&p 500. but it is a light day for economic data in the united states. the national association of realtors releases december pending home sales numbers at 10:00 new york time. this is considered a leading indicator of housing activity because it's measuring signed contracts. also on the earnings front, we'll hear from u.p.s. before the bell. last month, the package giant raised its forty quarter outlook. dr horton, dow chemical and hershey are reporting. after the close, we'll get numbers from insurers aflac, metlife and newscorp. this morning is the annual groundhog day celebration in punxsutawney, pennsylvania. punxsutawney phil will make his weather forecast. this is infamous. if he sees his shadow, we get six more weeks of winter. his handlers say his predictions are 100% accurate. the national weather center says phil is only about 40% of the time. we'll be watching. >> 40% of the time, that's better than most weather forecasters, i think, looking at my stats from what i can tell. i can't look at that without thinking of bill murray, though, nicole. >> of course. of course. the movie made it famous. >> it's the only thing that makes it known to viewers around the globe. now we'll turn our attention to spain. jobless claims rows by more than 3% from december to january taking the total number of unemployment to 4% or just flow 20% of the working age population. we're continuing our tour around some of the other economies in europe and stephane is in madrid with more. we have a tough austerity plan coming into play and you say they're going to need it. >> the concern is that the government now has two priorities. the first one is unemployment rates, which is expecting to top 20% in the first half of this year. we had the 3.1% increase, again, in january compared to the last month. and also the second priority comes to the deficit level which reached 11.4% at the end of 2009. that was much higher than expected. definitely, the government wants to cut spending by 50 billion euros over the next four years in order to bring back the public deficit to only 3% of the gdp. that's an ambitious target. now, is this realistic? that's the question i have to the degree of state economy. >> the austerity plan that we put forward is a good exercise in realism. you know, it's -- part of it is due to the removal of some exceptional measures that have been put forward during the crisis, especially to try to help public investments in construction, the construction area. but other areas have more to do with the adjustment of some of the policies that have been grown too much in the period to have exceptional revenues from the construction boom during the first part of the publication. >> the spanish government wants to address the debt issue because the country is facing a possible downgrade of its credit rating. last year already moody's lowered the rating from spain to aaa to aa plus and just before christmas, moody's announced that it placed a raiding earn review within the outlook. so that is something absolutely that the government wants to avoid, even if the secretary of state was not worried about that option. >> no, we're not to worry about the downgrade of the credit ratings. we have an excellent rating. we have top ratings from two out of the three agencies and aa plus from standard & poors. so those are very, very good ratings. we also think we have a very good investment story, as well. our debt levels are low. our credit is high. so for the medium term, we're not very concerned about the ratings. and that is a very ambitious plan for the spanish government. just two years remaining before the next general election and hopefully spain will be able to meet this next target by 2013. for the time being, ross, i send it back to you. >> and we saw that with the manufacturing pmi how much spain is lagging behind the likes of germany, italy and france. christine. coming up, president obama wants a tight rope between investing in growth and a soaring deficit. will its $3.8 trillion plunge the u.s. into a debt crisis. >> and we'll tell you everything to expect on today's wall street ahead of the pack. more to come here. welcome to "worldwide exchange." the headlines making news today in the united states, it is groundhog day. will toyota, though, see its shadow? rivals could get a big boost from the automaker's woes as they report january sales today. >> meanwhile, here in europe, markets have turned up positive territory after starting the session lower. bp has been the main drag after a disappointing outlook. >> and here in asia, the aussie dollar takes a hit after the reserve bank of australia shocked markets by leaving rates unchange at 3.75%. >> nice to have you with us here on "worldwide exchange" for this tuesday, february 2nd, 2010. let's take a look at how the futures are hovering today in the united states. dow is about 35 points above fair value right now. and the nasdaq above fair value, as well, as is the s&p 500 after closing the day the dow up 1.2% to 10,185 and the s&p rising 1.4%, as well. what kind of momentum are you giving to us from across the pond, ross? >> i think it's a lap-in effect. when we came on air, we were negative. since you've been on air, things have turned around. so you are obviously positive for the markets. the ftse 100 up nearly 0.5%. the zemt ra dax and the cac up 0.8%. smi up over 1%. energy is weaker on the back of bp. it could be, christine, that you're with us, as well. it's the double effect, that's what it is. >> you're playing both sides there. dangerous territory, you know, dangerous territory. you're a smart boy, you are. let's take a look at the currency markets. dollar/yen, 90.75. euro/dollar, 1.3953. sterling weaker against the dollar, 1.5928. euro/sterling, 0.8758. the dollar is looking pretty mixed across the board. nicole. >> joining us live right now, malcolm poly chief investment avenue stewart capital advisers and still with us, charlie diebold, head of european rate strategies at nomura. malcolm, manufacturing gave markets a big boost yesterday. what are you looking out for today? >> oh, not a whole lot of excitement. i mean, we'll take our queue from overseas and really heading up towards the jobs data at the end of the week. so probably not a lot of fireworks till we get towards the end of the week. big news here. whether the groundhog sees or doesn't see his shadow is probably the biggest news around here. >> the market's shadow with the budget out yesterday, you and i were chatting last night and you were talking about consumers still accounting for too much of the economy as growing to about 71%. where do you think it should be? >> if you look historically, consumer typically represents between 65 and 66% of u.s. gdp. we've been above that for quite some time. those people that are hanging their hats on a normal recovery after this recession i think are in for a bit of a surprise as the consumer balance sheet is still in pretty bad shape. we need to get the consumer back to normal shape, which means the boost we expect from the consumer probably won't happen and we senate business to pick up their end of the deal. >> charlie here in london, do you think that's going to weigh on risk appetite, do you thk, that story? >> i think st consumption story is very much pivotal. linked into that is the whole credit multiplier. and so far, you're not seeing that. you're seeing quite the opposite. there's still a deleveraging process going on. while that's the case, eventually consumption is going to prove too weak to sustain what would be a normal recovery. that is certainly true of the western world. although obviously there's something very different going on in asia. but as far as europe, the uk and it is u.s. are concerned, i tend to think that you are stuck with a low growth locum assumption story. >> liquidity was such a big driver last year and it's sort of easy to bet on the growth in china. is that over, malcolm? >> i don't know about the growth in china being over. but the -- >> no, i mean the play action, pricing it in and the liquidity. >> oh, no, i think the player on china is not over. china is one piece of the story. i think china is the less interesting of the asian stories and more interesting is india where you have a demographic boost where if you have population growth. lagz growth is growing fairly rapidly. so short-term boost from china. longer term you get more of an effect from india. liquidity is a story that will tend to get less simply because we're not adding necessarily a lot of liquidity to the marketplace. >> well, i think we are in a slow but study process of removing liquidity from the system. you have a scenario in europe where qe will be removed this week potentially from the bank of england. all around the world, the injection of liquidity is going to start fading over the next few months. that combined with this vigilanteism of austerity punishing those that don't put in place sound, fiscal plans i think does pose a fairly significant risk to the growth story, certainly in the second half of this year as you get this combination of austerity and liquidity being withdrawn. >> malcolm, this is christine. i'm watching this particular story very, very closely. all the problems that toyota is having in the u.s. to what extent do you think u.s. automakers can benefit from these woes? >> to the extent that they have less of a quality issue, i think they will stand to benefit somewhat. of the u.s. automakers, ford probably has the biggest opportunity as they've clearly, in our mind, clearly have the best balance sheet, the best -- from a design perspective, they have targeted green cars, hybrids and so forth, i think they're best positioned to make hay, so to speak. toyota is an interesting short-term story. i think if they can get through the issues with the accelerator pedal and get those behind them, the toyota car itself is still a pretty good car. >> so just to clarify, malcolm, would you be willing to buy into the u.s. carmakers in the u.s.? >> no, not at all. we have not owned the automakers for quite some time and we don't see any opportunities, because we are long-term investors, we really don't like that space, have not liked it for quite some time and continue to see consolidation taking place on a global basis. >> malcolm, we'll have to leave it there for now, malcolm polley. of course one our guest host continues to remain with us, charlie dee bold head of rates strategy from nomura. nicole, let me throw it to you. >> if you're thinking of buying or advertising during this year's super bowl, sorry, it is too late. cbs sold out of tv time with less than a week to go before the big game. stay with us to find out how much the most valuable airtime went for this year. "worldwide exchange" continues. grasse, france is known for making perfume. but food executives come here for something else, to work in cargill's flavor facility to create better tasting foods. this is how cargill works with customers you. welcome to cnbc's "worldwide exchange." here are some of the top stories we're watching from app all around the world. boeing expecting to trail deliveries this year with no pick up in demand until 2012. but rival airbus reported their worst annual order tallies last year as struggling airlines canceled or deferred deliveries of nearly as many planes as they bought. boeing wouldn't comment on china's decision to punish companies that are part of the government's recent arms sales to taiwan. >> that is a government to government issue. it would probably be inappropriate for me to address it. and if you think about it, i think it's far too premature to understand what the impact of that issue might be for our industry or specifically for us at boeing. >> and let's take a look at boeing shares in frankfurt right now. boeing up slightly, about 44.425. also shares of barnes & noble jumping 18% in after hours on monday after ron berkel says he's eyeing a bigger chunk of the seller. burkel, who made his money in the super market business, has snapped up 19% of barnes & noble. he says the retailer's stock is undervalued, but he criticizes the company's poison pill. in less than a week until this week yeps anticipated super bowl, the indianapolis colts and the new orleans stants arrived on the scene monday. cbs says it sold out of ads with the final spot going monday morning. average prices for a 30 second ad tops $3 million. last year, nbc had two ads remaining two days before the game amid the recession and the financial crisis. just a measly $3 million, ross. >> yeah. yeah. that will be nice, wouldn't it? bp shares, nicole, are slighting up and warning investors not to expect a strong recovery. in a first on cnbc interview, they reported a jump in fourth quarter profit, but the ceo said not to expect that to continue next year. >> we've said all along that our long-term growth rate is 1% to 2%. so as we look at 2010, we're guiding exactly in line with what we said a year ago. >> tony hayward told us that cost cutting is very much in focus as he doesn't expect a strong economic recovery. christine. >> ross, toyota's unprecedented recall of millions of vehicles with faulty accelerators is likely to take a toll of sales in the first public comment from an executive at toyota's headquarters. executive vpshinichi sasaki says he does not know the extent of the damage on the bottom line but admitted that he is concerned about future sales. >> translator: in recalls of the past, sales were full 20% in the first month and gradually recovered. since this is a first for us and it is the first time we have worried customer toes this degree, i am worried that there will be a slighter greater impact. >> sasaki seas he will review the sales before adding to 2010 targets. overnight, we had the company announcing that it would restart production of a eight models in north america boosting shares in tokyo trade today. ross. >> thanks for that. final thoughts from charlie dee bold. in the u.s. critics will line up to go over the $3 trillion budget. when you talk about that and you talk about the ending of the liquidity measures b, what is the outlook for the u.s. deficit? >> we have a generally positive view on fixed income markets, certainly bidding forward through the course of this year. in the near term, yeah, there's riskes from stronger macro data, but this combination is really wearing this emphasis on austerity and less fiscal expansion. you have the, if you like, the unwinding of prestimulus effects kicking in and in the face of stronger data, central banks removing liquidity. and, you know, we think that there's a good chance that this exposes some of the underlying farther gillty of the systerag]. if that's right, then the secretary half of the year will be a very good time for fixed income markets. >> sounds like it's sort of a double dipper man. >> not necessarily a double dipper. but certainly not tracing up to the recovery, which is where the markets are pricing right now and i think, you know, that obl gives us sensitivity the other way. we're kind of looking for the disappointment trade. >> u.s. government debt or european? >> i think it's a lesson that holds true across the developed world. i think europe will probably outperform certainly in the next few months. in the second half of the year, if we're right about this risk, then perhaps the u.s. could start to overperform 37. >> okay. charles, good to have you today. charles diebel, from london. "squawk box" gets under sail in just under 12 minutes. carl is with us to tell us what's coming up. and i imagine the budget get more discussion. >> yes, ross. the critics are lining up to take some shots on the budget. senator grassley is going to put more fire under the seat today. and david walker, the president and ceo of the peter g. peterson foundation will give us their assessment, as well. one of the nation's top class action attorneys, mark lanier, will tell us how the automaker, toyota, is going to be attacked by potentially a lot of lawsuits. tons of data is on the way. would he have we'll check out hiring trends with the coe of careerbuilder.com. and we will unveil the porker of the year. who has been bringing the most bacon home for their district? we'll talk about that as squawk begins at the top of the hour. >> i thought for a moment you could have been talking about weight and i thought i might be in that because i had a pretty good christmas. >> i knew it. i knew you would go there. that's not it. that's for another show. >> the other porker is over here wsh porky pie, it's alive. i guess that's not what you're talking about. >> i have no idea what you're talking about. >> we call porkers over here someone who is telling a lie. >> i see we have a cultural communication failure. >> it's a common interest none of us share. carl, we look forward to the show. >> this is a contest i don't want to win, no doubt. coming up ahead on "worldwide exchange," data including auto sales and home pending home sales due out later today. so right after the break, we'll tell you what you can expect in today's trading to help you stay ahead of the pack. stay with us. delivery giant rates its fourth quarter outlook. other companies reporting include archer daniel midland, dow chemical, hershey, marathon oil and whirl pool. we've got numbers from insurers aflac, metlife and newscorp after the bell. joining us again is malcolm poly, chief investment officer at stewart capital advisers. we just saw it's a pretty light day for economic reports today. but you're still looking to washington malcolm, aren't you, to set the tone? >> right. really, washington hasn't had quite as big of impact on markets this year. obama with his budget and with his with state of the union address, so a lot of the things that are coming out of washington have been having an impact and we expect that to continue, particularly this week with relatively light economic data. >> people are still investing. this is different from what you saw in 2003 to 2004. you said in the previous segment that you're not investing in toyota, let's say, but what sectors are safe? after all, things are on sale right now. what sectors do you still think are risky? >> relatively safe, so to speak. there are sectors we've been saying away from. we expect the consumer having issues, we would stay away from retail and other consumer sent rick businesses. we would stay away from financials as particularly banks, the way they expand earnings and expand revenue is to expand their balance sheets and that really isn't going to be happening. most banks don't have the ability to expand their balance sheet currently as they pay attention to capital and getting their capital ratios up. and so really, it becomes a merger story and you really need to try and pick the targets. and that is a much more difficult game. we do like materials. we like energy. we like industrials. we like some of those cyclical names that are really going to participate in the more global growth story. >> malcolm, this is christine here. how important is that friday jobs data to you? >> the jobs data is important, although we don't put as much stock in it as a lot of people do. i know a lot of foebs have been trying to guess whether or not we're going to add jobs. i know earlier in the show, somebody had talked about census data provides a lot of noise, and it certainly is going to do that, at least this year. jobs data is a lagging indicator. when we get to the point that jobs start showing us that the economy is improving, the economy has been improving for quite a while. it's interesting to a lot of people, but it isn't really the story that some would have it be. >> malcolm poly, we appreciate your time. we appreciate you being with us at stewart capital advisers. and malcolm knows this, you probably know this by now, as well. more than 30,000 people are expected to descend on the small town of punxsutawney, pennsylvania this morning. it is for the annual groundhog's day celebration. the legendary punxsutawney phil will make his weather forecast. if he sees his shadow, we get six more weeks of winter. phil's hammers say his predictions are 100% accurate. the u.s. national climatic data center, of course, we check on that 100% rating says, hey, he's only right about 40% of the time. i am hoping he does not see his shadow. >> if he doesn't, what, does the sun come out all of a sudden and it gets warmer by 10 degrees? what happens? >> i hope so. i hope we can get weather like christine is having right now. >> i'd like to bring punxsutawney phil to asia and see what he says. now, that will be something to think about. >> all right. that's it for today's show. i'm nicole in the united states. >> and i'm ross westgate in europe and thank you for being here. >> and here in asia, i'm christine tan. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. sir? finding 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. good morning. washington watch, two key hearings on capitol hill today. tim geithner and paul volcker both on the hot seat. meantime, president obama heads to new hampshire to shop his small business plan. a surprise down under, australia central bank shocking the markets overnight by skipping an interest rate hike. it's tuesday, february 2nd, 2010. it's groundhog's day here. it's national marmuth day in alaska. good morning to punxsutawney phil as "squawk box" begins right now. good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. and happy groundhog day from all of us. this is a traditional we know very well. take a look at these live pictures of gobbler's knob in pennsylvania. punxsutawney phil will be called from his burrow. you know how this routine goes. if he sees his shadow, legend says there will be six more weeks of winter. if he does not, doesn't get frightened back into his cave, things will come early this year. this year, there is a new twist. phil's annual prediction will be send out by text message. the pennsylvania tourism office will carry the event live via web cast. >> thousands of people are on the list to get the text. >> oh, yeah? >> yeah. he's been right 22 out of 29. great people in the journal today. this goes back -- i don't know about centuries, but decades and decades before before groundhog day and it's the rhythm of the seasons that you kind of measure. 72% of the time or something? i heard over 70%. >> when bill murray called his a rodent, the groundhog is a rodent and, in fact, it's a member of the marmuth family. very few people know that sarah palin, in one of her last acts made the day national marmitt day because they don't have groundhogs in alaska. she made it national marmitt. >> you can't make a national day