Transcripts For CNBC Worldwide Exchange 20140408

After chinese regulators give the firm the goahead to close its deal with microsoft. It now has all the relevant approvals. Youre watching worldwide exchange, bringing you Business News from around the globe. Welcome again to worldwide exchange. Now russia is calling on kiev authorities to put an immediate halt to military preparations in the southeast of ukraine. Saying the troop buildup could lead to an outbreak of civil war. The Russian Foreign Ministry Statement follows an announcement by ukraines interior minister that antiterrorist operations are now under way in the eastern city of kharkiv. Under a bit of pressure today as well. Meanwhile, u. S. Secretary of state john kerry will meet with top diplomats from russia, the ukraine and the e. U. Over a new push to calm tensions in the eastern region. Now, Vice President at Intelligence Joins me. With me is also another guest. Good morning to both. Are we looking at a crimea take two situation here . Well, some of the evens that we saw in kharkiv yesterday and on sunday suddenly were reminiscent of the situation in which the crimea even started. That was the take overof the Regional Administration buildings and declarations of separate independence of willingness to join russia and calling on russian help. However, the situation in eastern regions is quite different to what we had seen in crimea. In times of the ethnic makeup of the population, the control of the Central Government as well as eastern regions dont have the military presence of russia that crimea had. We got comments from russia this morning in the potential about the potential for civil war. The kiev government are walking a fine line. Were still in that situation, arent we . Exactly. It is a thin line but were maintaining public order and restoring the control of governmental buildings in the regions and not being seen as too heavyhanded on what seems to be the russian ethnic minority representatives in the eastern regions. Any sort of powerful move on protester protesters and perhaps casualties on their side would give a good excuse to intervene in these regions. If not directly militarily, perhaps sending some of the force regulations through the ground as weve seen in crimea. Youre talking about a smaller proportions of ethnic russians in these region s. We dont want to get distracted by the pictures or headlines we see. Whats your probability that this situation escalates do you think . You see every time there is a separatist declaration, what we need to have a look at is do these people declaring independence have an actual control of the ground. If they did, that would be a dangerous situation. If it is 50 people sitting in the room proclaiming independence, that is still not thats very different. Yes, thats right. What do you think . The markets are keeping an eye on this but not really impacted right now. Have the sanctions weve seen give enough to give russia pause for thought here . Irrespective of what were hering from russia, yes. This is not a majority in this area. It is probably a minority and, well, we had a revolution in the ukraine. You have instability afterwards. Thats quite normal and to be expected. At the moment were watching the situation but not getting too excited about it. They do continue to threaten the ukraine as far as Energy Prices are concerned, the civil war comments this morning. What about what happens for the president ial elections on may 25th . There was always a belief that russia would do their best to try to influence them and get somebody in sympathetic to their line of reasoning and approach at those president ial elections. Is this going to be a key element there, too . Indeed. Russia said the military exercise is on their side of the border will continue for 45 to 60 days, a time line for the president ial elections and we expect the russia pressure in terms of gas prices, in terms of statements in regards of potential civil war situation in ukraine, pressure on federalization to continue at least until the first round of president ial elections. When we might see russia willing to engage with whoever becomes the new president of ukraine. But it is still up in the air. We dont know who that person will be. Its a continual buildup. We have talks with the west and hopefully ukraine and russia going on now. Otilia, great to get your updates. Great to get your impressions. Relatively little change for the stoxx, down by 0. 1 . We did lose 1. 2 yesterday which bucked a trend of nine sessions of gain for the stocks europe 600. It is the tech stocks, the momentum names that continued to see losses, taking their cue from what we saw as far as the u. S. Sessions are concerned. The key underperformer, were only talking around 0. 2 . The ftse 100 in the uk markets this morning. Lets move on and have a look at what else is driving this market. We have some of the top stocks, the key movers in this mornings session so far. Shares in sugar produce r suedzucker, it expects profit to go down. Another one were watching, sportsdirect. They are saying investors reacting to news that the founder of the uk retailer has sold 25 million shares in the company taking that stock down just shy of 6. 5 . Weve also got nokia, bucking the trend trading higher this morning after the company says its received approval from chinese regulators to sell its handset business to microsoft. The long awaited deal now expected to close this month in a signoff now on all the approvals the company needed for that. Quick check on the Foreign Exchange markets this morning. Interesting to see whats going on in u. S. Equity markets this morning. Not translating in terms of risk off environment. Dollar under a bit of pressure, were seeing that again. Euro dollar trading higher. They are saying thats the most oversold, perhaps looking for a boun bounce. The bank of japan meeting lower by around 0. 4 . Well be talking about what this means for the bank of japan and policy going forward, too. Quick check on sterling, too, we have uk data out this morning. Asian markets while choppy continuing the trend we saw from overnight in the u. S. Session. Well focus on the nikkei, down 1. 5 . Yen strength feeding into that in particular, the tech stocks, too. Twoweek low. 14,606. The nasdaq posting the biggest threeday losses of a drop since november of 2011. A bit of a bounce here that were seeing across these indices. Were around 33. 5 for the dow, the s p 500 by around 3 points and 7. We have a few hours until the open of those markets. In a reversal on its more bullish takes on u. S. Stocks, Dennis Gartman told cnbc hes getting out of equities and sticking with cash and gold. He said unusual market trading last week scared him into action. Something happened between 11 00 and 11 15 turned on a dime. I havent seen anything quite like that in that short a period of time. In a bull market there are three positions you can have, really long, pleasantly long and neutral. Its still a bull market. Its time to be neutral. You dont need to be short but you dont need to be long. I think cash is the right place to be. Dennis gartman there, saying cash is the place to be. You, however, say when we analyze shortterm trends using tech analysising with the s p 500 looks increasingly buttish. It does. What were seeing at the moment is very much the markets, very much focusing on Company Earnings. With the Company Earnings season just kicking off this week, the nervousness is whats reflected in the markets, the Market Participants thinking have we gone too far . Earnings perhaps going to dispoint us and thats why were seeing a son solizaticonsolidat its not only about the large cap names, its also about the small cap. The russell lost almost 6 in the last two weeks, too. Does that fit into this picture. It does. This market is driven by sentiment, the hope that things will be better in the future. If that is undermined, yes, markets fall. If i look at what the expectations are, the bar has been set pretty low. 111 negative eps announcements versus 17 for the s p 500. Is this an opportunity for investors to get back in, is that what youre saying . For those who are more courageous, yes, it is. You have to have the longer term in view. This will bring volatility because sentiment is quite brittle. It goes up and down. Investors seem to change their direction with every piece of news. Do you sit on your hands and perhaps wait for better levels . Germanys cabinet reportedly approved a reform of the countrys Renewable Energy law, this according to sources speaking to reuters news agency. The reforms are aimed at slowing down the expansion of green power which is contributing to a rising cost of energy in germany. We go to frankfurt to give us the latest. It feels to me like its reform on the margin and the bottom line is consumers will pay for green Energy Reforms in germany. Is that the case . Thats very much the case. Were still looking into a renewable search of roughly 6. 3 cents per kilowatt hour. Thats still a lot. The estimates are about a household of four people as approximately paying 200 euros per year just for the renewable surcharge. But that is actually going down for the german public. The majority of germans want to have that Renewable Energy shift. I think carolyn has introduced the term already in english as well during squawk box. What is going to happen now is we have less exemptions here for german corporates. The big ones, they still are benefitting from the exemptions and those exemptions to that surcharge are worth more than 5 billion euro per year. This have been challenged by the European Commission and that also today is allegedly after the table. There were flashes from reuters saying that German Government officials are saying that the European Commission has said has agreed to that Renewable Energy law, our economy minister is today presenting and the cabinet has approved. Really good news from that front. And the other side, who is benefiting as well, will be windmakers or wind mill producers, for example. The only Renewable Energy area which is still benefiting from more surcharges or more capacity is the wind energy. The German Government is saying its the cheapest power and we should support that power, because above all, there was a long standing problem getting them connected to the grid on the mainland. Those shares have been rallying on the news also when it leaked last week but we see a little bit of a rally as well today. With that, back to you. Thanks so much. Annetta outlining those points there. Samsung suspects its profits will continue to slip. Whos winning and losing the battle in the smartphone war . Its coming up right after the break. Youre watching worldwide exchange. Welcome back to the show. Samsung electronics estimates operating profit fell by 4. 3 in the First Quarter. Slightly below analysts forecast. This marks the tech giants Second Straight Quarter of profit declines. Now june is in seoul to take us through the numbers. Thats right. The slightly lower than market expectations, First Quarter preliminary numbers are showing that operating profit is expected to come in at 8. 4 trillion, down 2 from a year earlier. This is coming mostly from weakness in its smartphone business. This part of samsung was about 70 of the companys operating profit last year. Whats interesting is that samsung saw a Record Number of its smartphones sold in the First Quarter, more than 90 billion phones were sold. More importantly, falling average prices for its smartphones was the key point in this decline in profits. This is coming as a result of increased competition from lower cost phones from china. Also, funds set aside for legal costs for the samsung, apple peyton trail negatively affected the numbers. Analyst reports in korea are showing a mixed picture. Some are saying this isnt the end, samsung faces a more challenging Second Quarter as the two Top Telecom Companies started a new subscriber ban on all samsung phones. They may also see a bottom out in the First Quarter. In terms of what samsung is doing to avoid a further profit decline is theyre focusing on managing costs. Thats how the samsung Earnings Guidance look today. Julia, back to you. Thanks so much, june. Were joined by richard win sore, founder of radio fee mobile. Theyve had a weak start in south korea but they have competition at the top end, they have competition at the lower price end from china, too. I look at it and see a number of analysts saying this is the start of a further operating margin decline for samsung. Do you agree . Yes, im afraid i do. The real problem is if you look at the overall smartphone market, its very large and unit shipments will still grow double digits this year. Because all the phones pretty much look the same these days youre in a situation where prices will come down quite aggressively. That actually makes it very difficult to see Revenue Growth this year. Because of the price declines youll have margin pressure. While consensus is looking for about a 3 increase in operating profit for the full year for the sampson group, within i look at the numbers im looking around about an 8 decline. Im in that second camp. To go on from what you were saying, about generating revenues and margin, how crucial is it that they reign in those costs . These are also the things they need to address beyond the products, isnt it, surely . Well, this is the whole question mark, isnt it . The problem is, the hardware is becoming commoditized. In order to create value in the to do more and more services. If you look at the amount of revenue google generates from these devices is significant. Its moving out of hardware and into software and services. Samsung and position here is very weak. It looks like the 2007 samsung had massive market share. Lets move on ho htc, reliance on the htc for them, much weaker earnings we saw in q1 and 2. The life cycle just one quarter. How are they going to sort this business out . You have a death spiral. Yes, im afraid it is. Typically when you get a company in this kind of situation, you have to cut resources in order to stem the losses. When you cut resources, you then lose market share. Your losses deepen. You have to cut again. This is why you get that a death spiral. The way out of that is either you invest very, very heavily and incur massive losses in order to get a return slightly further down the line or basically you just carry on in this way. When you look at in terms of what htc is doing, they have a great product. But the Marketing Resources that htc has to go behind it is much, much more limited. This is where i worry. Plus the fact the htc 1m8 isnt cheaper than competitors. Smartphones have been around for quite a while. The question is who will be the next innovator . Quite frankly these phones pretty much look the same, have the same operating system as well. Theyre completely interchangeable. Who is going to be the one who brings the next innovation . Well, i totally agree with you. This is why the view i hold is that the value is moving into the ecosystem. You know, in terms of how an investor should position themselves in the smartphone world this year, its not really the guys who are making the phones on android. Its going to be the companies that have services that are able to generate revenue from the growth and the user base. The user base is growing quite strongly. Then you start to look more into the likes of google, yahoo microsoft, these companies. These are the ones you want to look at for the growth in the next generation. Richard win sodsor, founder radio free mobile. Thank you. Its interesting to look at apple and samsung. These charts suggesting that where the growth is is larger screens, and better price point. Everything that apple isnt doing. I think apple will come out with a larger screen product during the course of this year. I think actually now that the game has been leveled between samsung and apple to a certain extent because samsung is now struggling to grow as well, i actually have my stakes more on apple. Because i see apple as the more emotional product than samsung. Samsung is much easier to replace with htc or other products. Apple most of their customers, i think, are a little bit more attached to the brand. Emotional. Its the emotions. Interesting. Its complicated to move as far as apple is concerned. Everything is so connected. Emotional. I like it. Several Brokerage Firms have upgraded with lafarge. Pbs has a buy rigating on the stock at 2. The bane highlighting potential savings. Lets talk about what were seeing as far as m a. These businesses looking at deciding whether or not to invest in capex or go the m a route, go for the cheaper, lowcost option in m a. Thats what were seeing surely. Its the lower risk option. It tends to deliver more quickly. It gives you the pr boost. Really what we would like to see companies doing with their accumulated cash piles is not necessarily m a, its invest into future capacity. Thats going to give the economic recovery really the boost we need. Lets face it, at the moment its mostly carried by consumer demand. We need to get more of that industrial demand going as well. While were encouraged by what the m a tells us about increasing confidence levels amongst decisionmakers in industry, we would like to see that confidence also translating into capex. We talked about last year being the year of the buy backs. If i look at the s p 500, these companies are still spending about the same amount of money investing in capex that they are in buy backs. Its still the year of the buy backs surely. Thats why im not overly totally bullish on equities as i would otherwise be at this part of the cycle. 2014 will potentially be a slightly more borg year for equities than what we saw in 2013. Brilliant. Today is annual international payday, a symbolic day when womens earnings catch up to mens earnings from the previous year. It takes a few extra months because of the 23 gender wage gap that women typically face. What looks to be a timely announcement, president obama is set to unveil a pair of moves that his Administration Says will strengthen enforcement of equal pay laws for women. Now, does the government still need to take action on equal pay or is it up to the individual to fight harder for pay . Do women need to lean . . If you want to join the conversation on worldwide exchange, get in touch with us, contact us by email, twitter or direct to me. Still to come on the show as the uk economy builds higher can the construction sector keep up . Stay tuned as we get the latest data, right after the break. Youre watching worldwide exchange, bringing you Business News from around the globe. Welcome back to worldwide exchange. Here are your headlines. No easing for now. The yen gains as bank of japan governor kuroda stands pat on policy. He thinks there is room for additional stimulus if needed. Markets in japan slip on the lack of action. Stocks in europe remain fairly flat, this after a volatile trade state side sees the major indices clock multiyear losses. Oil prices climb on renewed tensions in ukraine. Russias Foreign Ministry warns that the country could be facing a civil war. Nokia shares open higher after chinese regulators give the firm the goahead to close its handset deal with microsoft. It now has all relevant approvals. We have some uk data out this morning, manufacturing data. We have an annual rise of the fastest rate since february 2011. The february manufacturing output rising 1 on the month, 3. 8 on the year. Much stronger than the 0. 3 that we were actually anticipating. Industrial output at 0. 9 on the month, the strongest since june 2013. The forecast on that one, too, 0. 3 . Weve got the uk january figures for manufacturing revised to 0. 3 , too. Thats up 3. 2 on the year. Strong industrial manufacturing data is coming out from the uk this morning. More of the same it seems. Were joined by robert wood, economist at bahrenburg uk. Hes in studio. More positive signs for uk manufacturing sector, it seems. Yes. Its hard to find any negative signs for the uk economy right now. When you look across the manufacturing data, which is clearly much stronger than expected, 1 monday on month is a strong number. If you look across that or the British Chamber of commerce or deloitte, a big firm showing Investment Intentions. I want to talk to you about that. British Service Firms reporting the fastest growth in exports on record in the First Quarter. This is one of the signs that perhaps we wanted to see more strength feeding through as far as the uk recovery is concerned. What weve had so far is consumers dipping into their pockets. Thats normal for a uk cyclical upturn. Businesses are investing more. In this survey this morning, they were at a record high for manufacturing films. Also signs on the Services Side that exports were picking up, which is really important given that enormous payment deficit they are running. This is strong for the uk, which is why i expect growth to be way above consensus in 2015. Upside risks even to your 3 forecast for this year, are you saying . If Investment Intentions are record highs, the key risk here is political. European elections, scottish referendum, whether that derails some of the sentiment. If it doesnt, yes, upside risk. Theres a comment on the uk here. We need to accept were still quite dependent on what happens in the eurozone. The uk is the sweet spot. That could come back on us. Very good. Very positive. What about the markets for the ftse 100. Its very much a story. We are overweight on equities. Our overweight on europe has worked better. Were expecting the uk to catch up quite a bit compared to the international markets. The uk could see its gdp for 2013 and 2012 ramped up after a major shakeup in the National Accounts this autumn. They will implement reforms, the first in 15 years, which will boost the size of the economy, increase the amount of public debt, unfortunately, as well as raising the savings ratio. It would be good news, wouldnt it . The two key changes that are being made, r d spending is going to be count as an actual output than expenses. The second is the defined benefit, Pension Plans will count as income when the benefit is given rather than when Companies Pay into it. It makes that benefit less lumpy. The result is youll see savings go up for households but down for corporates. Thats where the savings is coming from. Overall gdp up. Investment should be higher. International comparisons, the whole of the eurozone, putting through the same revisions this year. The uk is towards the top end but a lot of other countries are very similar amounts to the revisions for gdp and investment. It might not increase in the international standings. Thats a good point to make. We have to push it aside. Its something thats going to be across the board. If it influences sentiment positively and does it . Do you expect it to . Well, maybe, im not sure. Where does scotland feature in this very quickly . One of the key things youve put into this is not what we see in the short term. You have the general election. Its an uncertainty we dont need. I still very much believe and hope scotland will stay with us. Until they decide, thats not going to be good for decisionmakers. Now, we were just talking earlier about equal pay. Im going to keep you both pay rather than thank you. I want to get your views on this. Today is equal payday, a symbolic day when womens earnings theoretically catch up to mens earnings from the previous year. What looks to be a timely announcement, president obama is set to unveil a pair of moves that his Administration Says will strengthen enforcement of equal pay laws for women. Now, does the government still need to take action on equal pay . Or is it up to the individual to fight for harder pay . Do women need to get in there and fight for their rights . Its solely up to the individual to fight harder, says this tweet. You were laughing about this. What do you think . I was laughing because im agreeing with a lot of whats been said. Not so much that the government perhaps needs to do more but its just in society that women often times underrate what they have to bring to the table, whereas men overrate. The old saying, if you dont ask, you dont get. Actually is something ive experienced quite a lot over the course of my own career. My boss at Morgan Stanley used to tell me, women when they were filling in the quarterly reviews of their performance, rating between 0 and 10 of their performance, men would do it by 1 to 2 notches above what their colleagues were basically saying to them. Robert weighed in here. Its a tough one, isnt it . Youre not going to get away with anything but agreeing with lhota here. I would have to agree. Of course you are. This is due to lack of enforcement. Women take career breaks. They have time off. I have to defend men a little bit in this. That natural decision advantage. What i also beyond what i just said, you have lots of women who are underestimating what theyre doing. There are a few who are completely overestimating. Im finding it a bit extreme. Guys, thank you so much. I was being coy there in case anybody is watching is incensed by what i just said there. Quick check on the european markets. A bit of a lackluster. Losing a bit of ground to add to the losses of yesterday. The key underperformer, quick check on the bond markets this morning in particular. Lost a bit of ground as far as the u. S. Markets, 270 the level for the tenyear treasury. We have tenyear bund trading. One of the ecb members suggesting qe is further away than perhaps we might like. The dollar under pressure this morning. Dollar yen continue to trend slightly lower after the bank of japan stayed pat on policy overnight, 102. 60, the figure there. 137. 70. Citi saying that of all the currencies in the g10, the euro most undervalued, most likely sorry, oversold. Not undervalued. Most likely to face a bounce back. Stephan is in paris. Theres talk of potentially the left in his party in particular not signing off on this confidence vote today. Whats the risk there . And even if he does get the confidence vote, the nod here today, how much of a struggle is it going to be passing through reforms in Parliament Given the skepticism were seeing, particularly on the left of his party . Yes, its so secret. The new Prime Minister is not very popular with the left wing of the socialist party. And over the weekend 88th, clearly, that might not support the Prime Minister this afternoon when he will presented his policy before the national assembly. Even if the last minute, i believe, most socialists will decide to vote like the rest of the party. The head of the socialist group say he was rather confident about the outcome of the votes which will take place later in afternoon, around 4 00 p. M. Central european time. The new Prime Minister will outline a policy. Were expecting two main announcements related to the economic policy. The first one is the fact of responsibili responsibility, pro business measures. Were now expecting the details on how it will be implemented and precisely what will be the benefits for french companies. Remember its a 30 billion euro tax skirt on labor. The second announcement that we are expecting today, julia, is the detail of the 50 billion euro spending cuts that the government is planning to implement over the next three years. He will outline the details. Hes likely to announce 20 billion euros in savings from the Central Government which probably a reduction in the number of public workers. That would be a big uturn compared to what Francois Hollande is likely to announce 20 billion in savings on the social security, the welfare state in general. That for french people would be a significant effort. Last but not least, 10 billion euros in spending cuts from local authorities. This is basically what we are expecting this afternoon. Thanks so much, stephan. Eagerly awaiting the 50 billion ye euros worth of savings. Great to chat to you this morning. Now moving on, stories making news in the banking sector, citigroup warning investors it may miss a key profit target after the fed rejected its capital plan late last month. The wall street journal reports that move makes it unlikely to hit its 2015 goal. It is often used to compare banks against one another. The figure is also important for the ceo who promised investors he would ramp up profitability when he took over in 2012. Citi agreed monday to pay 1. 1 billion. Citigroup shares trading higher by around 0. 4 in the german trading session. The fed will give banks two more years to share their holders are in compliance with the volcker rules. Banks will have until july 2017 to divest certain collateralized obligations, or clos. They will shift investors to other exposures. Loans and clos are highyielding, often used in buyouts. Some clos fall under this rule. U. S. Regulators will vote today to finalize rules for Bank Leverage ratios that are expected to be districter than those in the basal 3 accord. They would force banks to fund part of their business through less risky avenues such as Shareholder Equity instead of borrowing money. They called big banks to meet a leverage ratio of 6 . Banks see tougher capital rules as costly but regulators said they shouldnt have a problem meeting the higher requirements. Its the end of an era but also a Security Threat for the business of banking. From today, microsoft will stop providing security updates for windows xp. With 95 of bank atms using the operating system, could it make lenders more vulnerable to security lapses . Kayla tausche has this report. Reporter they run using a 13yearold piece of software called windows xp. About four years ago, microsoft ended support. The Traditional Software used in the atms will no longer be updated by microsoft. It costs about 3,500 bucks for each atm to be updated. They have to be programmed individually, meaning this is a tedious process that doesnt come cheap. In the meantime, banks like jpmorgan chase, wells fargo, citigroup and pnc have asked microsoft for extensions to get them past this point. Thats not to say they just learned of the transition. Microsoft did end that support several years ago and federal regulators in october urged them to make this transition sooner, saying it was up to them to take on this Operational Risk so that consumers would stay safe. In the meantime, some banks have not given estimates about how long the transition will take, only ensuring that customer accounts will stay safe. A sticky situation for banks and atm operators alike and one that wont be solved overnight. For now we sent it back to you. Still to come, the bank of japan says it doesnt see any immediate need to roll out more stimulus, sending the yen higher. Were cross to tokyo after the break. I dunno, i just ah woke up today and i said i need something sportier. Annnd done. Ok maxwell, just need to ah contact your Insurance Company with the vin number. Oh, i just did it. With my geico app. Vin is up to the loaded. Ok well then jerry here will take you through all of the features then. Why dont weeeeeeeeeeee go out to the car. Ok, ill just be outside. Ok, yeah. His dad is my boss. Yeah. Vin scanning to add a car. Just a tap away on the geico app. Youre watching worldwide exchange. The bank of japan decided to keep its Monetary Policy unchanged as widely expected. It also maintains its view that the economy is likely to continue recovering moderately. We have the story live from tokyo. Hi, julia. The central bank voted unanimously to maintain its point of easing even as company sentiment turns sour as the sales tax hikes started this month. The boj says Business Sentiment continued to improve. Some companies are cautious about the outlook. At the press conference, kuroda showed that japans making steady recovery towards meeting the Central Banks 2 inflation target. He showed no signs of additional easing steps but Market Players believe the bank will be forced to act if consumption falls post the sales tax hike. Many economists expect the boj to act on further easing by the summer. In other news, japans current account returned to surplus in february from a record deficit in the previous month. Surplus stood at 5. 9 billion while Higher Energy import costs add to the deficit in february. Income from overseas investments helped push the economy into surplus. Back to you, julia. Thanks so much for the update. Alvin lew sr. , an economist, joins me now. You were expecting the bank to add stimulus before the hike. You called the situation dire. Tell me what your thoughts are right now. That was a bit of a disappointment. We thought they would do some monetary easing, a hit of the process itself. We are still a bit hopeful, although right now it seems i think the rest of the market seems to be correct, they might have to do it later in the summer when the Second Quarter number comes up and to show there will be a significant slowdown in the consumption within the gdp itself. We have analysts on the show this morning. They were saying that the bank of japan could look to add 20 trillion yen more stimulus in the Second Quarter. Thats almost double really what expectations are right now. Can you see that happening . We are thinking of a lesser amount. We are looking at around 10 trillion. Certainly if they were to delay it further and when the data does show up in a very disappointing manner, then there will be more to be expected from the boj, which is why we think boj should have done something earlier. Anecdotal evidence seemed to suggest that consumption seemed to hit quite high in the Second Quarter and may not recover that well in the quarter itself. The risk is here itself. If we dont see further stimulus by the end of the Second Quarter, by july, were not going to get a kicker to the third quarter. That means perhaps it is incapable to add to the consumption tax hikes next year. This is a real problem for him, isnt it . Yes, definitely. Even if the Inflation Numbers are like what they say, going along quite nicely to hit the 2 target. Its masked by the gst increase itself, come next year, Inflation Numbers could look quite bad. And by then, they might be too late for them to actually reverse course or improve the situation. So i think they should be looking at a hit rather than doing it much later. If you look at the way the data will be First Quarter data is only coming out in may. The Second Quarter wouldnt be out many months until after that. So i think it is pretty much unfortunate that we didnt see more coming out from boj today. You make the point as well, that this painfully slow progress as far as the third arrow is concerned. If you do see some kind of minor wage rises for the larger companies, if we look at the small and Medium Size Companies in japan, they just dont have the confidence to raise wages. What do they need to see in order to give them the confidence to do that . I really think theres very little in terms of a third arrow coming out. Theres quite the disappointment. Corporate tax reform still in the pipeline. Australia, japan trade agreement that was talked about today, probably gives a bit of hope that there might be some areas of in terms of the trade, some could actually be pushed through. But, again, i think its not just a matter of confidence. I think for them its that the companies are a bit too stretched to really be able to dish out this wage increase. Bigger Companies May do the normal increases but i think a lot more needs to come up from the arrow which we are not seeing right now. As you were just pointing out as well, were not going to see the impact of the consumption tax hike in the data until we get into the beginning of may. Do you see further downside for the nikkei here, as perhaps confidence continues to be hit . I think certainly, look at the reaction today on the nikkei itself, possibly, also due to the fact that overnight markets, u. S. Markets have been fairly weak. This inaction from the central bank itself. And very much in the view that this market, the economy, domestic economy, is still on track for improvements seems to be a bit maybe a bit too optimistic in our view. Thats reflected in the selldown in the nikkei. And possibly there will be more downside pressure. Al vin, great to chat to you, alvin leiw. Takeda pharmaceutical, theyve been ordered to pay 6 billion in damages over claims it hid the cancer rids relating to its diabetes drug. Takeda and eli lilly were ordered to pay additional damages. Japan and australia have finally agreed a free trade deal. The pact will see each country lower tariffs on imports of key products, including australian beef and japanese electronics. Take a listen to what the japanese Prime Minister and his australian counterpart had to say at a News Conference in tokyo. Translator first of all, in the economy sector, im extremely delighted that negotiations on the Japan Australia Economic Partnership Agreement which began in 2007 when i was the Prime Minister. Has reached an overall agreement today. This is the first time that japan has negotiated a comprehensive Economic Partnership agreement or Free Trade Agreement with a major economy, particularly a major economy with a strong agricultural sector. Key question is whether or not this gives them leverage in the trade talks of the u. S. Well have to see on that front. Insurers in china will be allowed to buy stakes in more than one pair it competes with for the first time. Thats according to new rules issued by the chinese insurance regulators they allow stronger firms to invest in weaker players. This, coupled with investment in risky local Infrastructure Projects have weakened the position of smaller insurers. Lets give you a look at whats on the agenda in asia tomorrow. Monday, the Worlds Largest democracy started heading to the polls on wednesday. Its the turn of the worlds third largest. Indonesia holds its parliamentary elections and will also determine which parties can run candidates in julys president ial contest. Taiwans umc posting sales tomorrow. The company is the worlds biggest chipmaker and has ten plants around the world. Still to come, are you ready to go long the dollar . Stay tuned. Well explain why our next guest thinks you should. Stay with us. Welcome to worldwide exchange, im julia chatterley and these are your headlines. No easing for now. The yen gains as bank of japans governor kuroda stands pat on policy. He says there is room for additional stimulus if needed. Markets in japan slip on the lack of action but stocks in europe remain flat, this after a volatile day of trade state side sees the major indices clock multiyear losses. And citigroup is warning investors they could miss a key profit target this year. While they give banks more time to comply with volcker rules. And ukraine, the Prime Minister warns that the country could be facing a civil war. Youre watching worldwide exchange, bringing you business new from around the globe. If youre just tuning in, thanks for joining us here on worldwide exchange. Quick look as always at how the markets are faring ahead of the u. S. Open. We are seeing a bit of a bounce as far as the futures, the dow indicating higher by 23 points, the s p 500, a minor 1. 5 points and for the nasdaq, around 5 points higher. The losses that we saw in yesterdays trading session around 1 for each of these market. But for the nasdaq posting its biggest threeday drop since november of 2011, the worst threeday losses weve seen for the s p and the dow since january 27th. A lot of focus. It was of course the momentum names, the biotech stocks were seeing some of the biggest losses in the session, following a theme weve been watching in recent days. Amazon and google in particular, obviously a bit of focus. The tech stock losses. Some of the more minor losses in yesterdays trading session. The real pain felt gained by some of the biotech stocks. Similar story for the russell 2000. It lost just shy of 5 , too. A number of analysts saying people are looking at valuations as we head into q1 earnings season. Alcoa is coming up later. Lets move on and give you a look at what else is going on as far as europe is concerned. The 600 continues to see losses. Ftse 100 off 0. 4 , germans, off a tenth. Similar story for the french and italian markets. A quick check on the Foreign Exchange markets today. Well focus as far as im showing you the asian markets first. Real focus on whats going on in the japanese markets for the nikkei 225. The bank of japan, as i just mentioned, holding pat as far as policy is concerned. They did say more stimulus will be there if its needed. Yen strength feeding into this, around 1. 4 . Yen gains here, we have 102. 60, the love for dollar yen. Similar story as far as euro dollar is concerned. Euro gains here, we have seen the dollar under a bit of pressure, citi analysts saying this is the most oversold currency of the g10, looking for a bounce to 147. 70. Talking about the europe and the dollar in particular, our next guest says it may be time to get back into the long dollar positions as the u. S. Data picture improves. Now yens norvick global head of research at nomura. A tough few trading sessions, particularly what were seeing going on in the equity markets right now. Is this the time really . I think 2014 will be a year of Dollar Strength. Obviously we have Dollar Strength in january but then we had a giveback in february and march and obviously the last couple days. I think the strategic theme very much remains intact. What were say thing for is the normalization. Once that happen, the dollar will regain its footing. We think entry point is decent. I guess the argument for this, too, positioning is much cleaner. I look at the ftc data. Positioning back to october 23 levels. Thats surely an argument for it, too, surely. Thats an important argument. Obviously people have been excited about the long dollar trade in various waves. And now the excitement has faded in the background. I think those are typically times where it is a good entry point and we want to get into those trades. Stay with us. First ill give you a look at whats on todays agenda in the United States. No Major Economic data today. Just a pair of fed officials, the fed president , Narayana Kocherlakota talking today. The wall street journal reports that move is unlikely, citi can hit its 2015 goal for return on common tangible equity. Equity owned by shareholders is often used to compare banks against one another. The figure is also important for ceo mike corbett who promised investors he would ramp up profitability back in 2012. City also agreed monday to pay 1. 1 billion to settle claims stemming from Mortgage Securities it sold before the financial crisis. Citigroup shares slightly higher in the european session this morning in the german markets higher by 0. 4 . Now the fed will give banks two more years to ensure their holdings are compliance the with volcker rules. Banks will have until july 2017 to divest certain collaterized local obligations or clos. They shift exposure to other investors which can be other banks. Loans in clos are high yielding and often are used in leverage buyouts. The volcker rule cap banks ability to invest in risky funds such as private equity and hedge funds at 3 . Some clos fall under this rule, too. U. S. Regulators will finally rules for Bank Leverage ratios. The fed, fdic and occ would force banks to fund part of their business through less risky avenues such as Shareholder Equity instead of borrowing money. A proposal last year called for bank s such as jpmorgan and others to reach a level of 6 . Regulators have said they shouldnt have a problem meeting the higher requirements. Coming up next, the yen rises as the bank of japan fails to fire more stimulus. Find out why our guest says dont expect any easing for the next few months. Stay with us. [ male announcer ] youre watching one of the biggest Financial Services companies in the country at work. Hey. Thanks for coming over. Hey. [ male announcer ] how did it come to be . Yours . Ah. Not anymore. Its a very short story. Come on in. [ male announcer ] by meeting you more than halfway. Its how edward jones makes sense of investing. Youre watching worldwide exchange. Welcome back to worldwide exchange. These are your headlines. U. S. Regulators vote today on tougher banking rules. Which could prove costly. But the fed gives them two more years to comply with the volcker rule. The bank of japan says it will not roll out any more qe for now but it is ready for action. And following heavy losses in the u. S. , asian markets trade lower while europe tries to get into the green. Weve had a couple of ecb wires hitting the headlines just now, ecbs bonicci says the negative price changes are mainly in stressed countries, no signs showing inflation. The ecb still has standard policy tools it can change. Yens is still with us. What is the impact as far as the euro is concerned. Weve had talk, obviously in the last couple weeks about quantitative easing at the ecb. They didnt want to do it at this meeting. These comments youre referring to now suggest they want to use standard policy rules before they go down that rule. The euro regains its footing. The qe issue is really pushed further into the future and thats giving some relief to the euro. I think theyre reluctant to go down that route. They would need to see further bad news on the inflation front before they were to consider pulling the trigger. I spoke to the Vice President of the European Central bank on friday. He said there wasnt detailed discussion about the prospect of qe and that belied what mario draghi said at the press conference. I would agree with you on that point. What do you think of the euro then . It parodies your strong dollar call. Yes, weve definitely tried to avoid being too focused in euro dollar trading, because even if the overall direction Monetary Policy suggests that the euro dollar rate should go lower, there are other flows that pulls in the other direction. The flow weve been focused on for a while is the inflow into eurozone stock markets. Last year around 240 billion euros came in from foreign investors. That trend remains pretty strong this year. So until that turns, we would not be very aggressive on euro dollar trading despite our dollar view. Very quickly, how best to play that long dollar view. I know youre talking about a basket that includes emerging market currencies. Theyre an expensive commodity to be shorting right now. You have to be precise on the timing. Yes, well, so in emerging market space, the ones we picked have low carry. Not the most expensive ones. Chile would be one expression. Now that the meeting is out of the way, we will consider trading dollar yen from the long side again. Obviously the level is a better entry point right now. Youre talking about the prospect of the bank of japan as you just mentioned there. They kept their Monetary Policy unchanged and said that the Business Sentiment is improving but it doesnt acknowledge this caution going forward. We had the banks governor saying japan would likely see consumer inflation reach its 2 target around the end of this fiscal year and that the sales tax hike is likely to erupt the positive cycle emerging yens economy. Many analysts would beg to differ as far as disrupting the growth of the economy right now. They could increase bond purchases between 10 and 20 really without disrupting the markets in any way. We had jpmorgan earlier saying we could see up to 20 trillion yen trend worth of purchases. Could you see that happening . Yes, i think theres an issue of what is feasible and theyre almost running out of bonds to buy. Theyre buying such huge amounts now, theres technical difficulties for them to increase the program from here. They had some room left but they might consider other, more exotic equities to increase the size of the program from here. Theres an issue of timing as well. I think they feel really that theyre broadly on track in terms of generating 2 inflation rate within two years time. For that reason theyre not in any rush to move. They would certainly want to see more data for q2 to see what effect the consumption tax hike has before making a premature decision to stimulate further. It gives them a very narrow window, doesnt it, waiting for the data to feed through in q2 before they perhaps push for stimulus to help the gdp stats in q3. I have to say goodbye to you. Key point there, time to buy your dollar yen according to yens. Head of fixed Income Research at nomura. Now, some expect profits continue to slip. We look at whos winning and losing the battle in the smartphone war, coming up right after the break. [ hypnotist ] you are feeling satisfied without standard leather. You are feeling exhilarated with frontwheel drive. You are feeling powerful with a 4cylinder engine. [ male announcer ] open your eyes. To the 6cylinder, 8speed lexus gs. With more standard horsepower than any of its german competitors. This is a wakeup call. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Honestly . I wanted a smartphone that shoots great video. So i got the new nokia lumia icon. Its got 1080p video, three times zoom, and a twentymegapixel sensor. Its got the brightest display, so i can see what im shooting even outdoors, and 4 mics that capture incredible sound. Plus, it has apps like vine and free cloud storage. My new lumia icon is so great, even our wipeouts look amazing. Honestly, i want to see you be brave welcome back to worldwide exchange. Quick check on what the u. S. Markets are indicating ahead of the u. S. Open. As you can see, the s p 500 enindicating higher by just shy of two points. For the dow jones, 22 points and for the nasdaq, 6 points. Remember 1 losses across the board yesterday. Nasdaq posting its biggest threeday drop since november 2011. The momentum, the tech stocks, bioteches in particular weighing on the market. That doing a similar thing across Global Markets into the trading session today. Theyre relatively little change as far as the european markets are concerned this morning. Samsung electronics estimates operating profits fell by 4. 3 in the First Quarter, slightly below analysts forecast. This marks the tech giants Second Straight Quarter of profit decline. June yoon is in seoul to take us through the numbers. June . Thats right, julia, the Second Straight Quarterly decline in operating profits. What is samsung doing to avoid further declines. They are looking to the sales of the galaxy s5 to help their Second Quarter numbers and at the same time, more importantly, theyre saying they will be focusing on managing costs going forward. Samsung has previously mentioned that one of these costs is coming from marketing having spent 12. 2 trillion in marketing expenses last year. Its said that it would lower the ratio of marketing expenses to revenue this year. A final q1 numbers are due out later this month and Samsung Electronics stock closed it down slightly, down 0. 2 in trading today on the kospi. Julia, back to you. Thanks, june, great to have you on the show and for the update. Nokia shares are trading higher after chinese regulators gave the green light for the firms agreement to tie up with microsoft. They agreed to sell their mobile business to microsoft. Theyve now won backing from all relevant jurisdictions. Nokia expects the deal to close by the end of the month. The first subscriber figures from the wwe Networks Online offering are out. Theyve reportedly signed 667,000 people after just six weeks in what is seen as the first big attempt by a contact provider. The wwe strategy is an interesting test case for the likes of yahoo who yesterday signaled their intent to green light four online Comedy Series to augment their video strategy. Joining us from new york is principle at a. T. Carnie. It feels like a gamble for yahoo here. I understand why their heads have been turned by perhaps netflix and the house of cards but the likes of netflix have data that gives them an idea of what Consumers Want to watch. Yahoo theyre looking at the landscape where they are currently number five in terms of the most highly trafficked online video sites, well behind google and facebook. Marissa mayer has set out a vision to close that gap if they can. This is one plank along with other targeted acquisitions and Strategic Partnerships theyre doing. It is a risk for them. For them to monetize this, theyre relying mostly on advertising revenue as a way to close that gap. Netflix and amazon have healthy subscriber up ins and a base. As we mentioned a lot of data and information about their subscribers. That will be a skill set yahoo has to build up. Its clear theyre trying to narrow that gap behind google and facebook. What about the perception here with advertisers . Thats another crucial point, if they actually do make a success out of this, that could be a crucial element for them surely. Yes. What video does and one of the reasons why its the Fastest Growing sphere on the web is because it really does open the web up to premium advertising which is something thats been out of reach for web properties. This would enable them to really add some sizzle to their pitch to advertisers because they could if they succeed, they would be able to show more consumer interest and deeper engagement with their consumers with this video content. Thats the play Marissa Mayer is going for here. Lets move on to wwe. You say this is a game changer for them. The stock price was down almost 15 . Tech stocks got a pounding yesterday, too. Why is this a game changer . It has. I believe it is because this type of what we call over the top content thats direct to consumer really lends itself fundamentally very well to content thats highly targetable. This absolutely is. They have a fan base thats extremely passionate and loyal. Its easy for them to target these subscribers. Theyre already two months in and reached almost 700,000 subscribers. I think the economics for them are if they cross the 1 million mark, which theyre well on their way to doing, they break even in year one. Its definitely a lowcost proposition, they break even early and it sets them up to have directtoconsumer access, directtoconsumer insight and build up a new asset to the class that theyll be able to monetize going forward. Its incredible. They break even within a year. It seems like investors were hoping for more. Do you expect them to see a lift even in the subscriber volumes that weve already seen . Definitely. They timed it in a way that it was next to their marquise event, which was last sunday, wrestle mania. This was a huge lift they got, deliberately timing it in that way. They have two or three other marquise events spread out throughout the year. It offers a differentiated experience where you can search content through the archives and look up old clips of old fights and matches that the fan base is very much into. We definitely see that lifting further. At a price point of 10 a month, its a pretty attractive proposition for the consumer. Thank you. Fans of gains of thrones were ravenous for the return of their show. Sundays premiere drew 6. 6 million viewers, the largest audience for the cable channel since the sopranos finale. Hbo go crashed shortly after 9 00 p. M. Eastern due to overwhelming traffic. The New York Times reports google will announce a glass for work program today. Providing more Business Tools for the web connected eyewear such as tech support. Glasses being adopted by more professionals such as emergency room doctors and police departments. Consumers want protective lenses and long battery life. Uber captured a niche in the car services business. They want to branch out to other markets. Theyre launching a Courier Service in manhattan called uber rush. You can order a package to be delivered on bike or foot anywhere in the city from 15 to 30. The service will be available 24 hours a day and the new uber rush app will let the sender track the progress of the courier in realtime. I like the idea of that. For more on the worlds most iconic tech companies, tune in to cnbc at 1 30 p. M. Eastern for pixars cofounder, ed catmull. Welcome to worldwide exchange, im julia chatterley and these are your headlines from around the world. The yen gains as the bank of japan governor kuroda stands pat on policy but he says there is room for additional stimulus if needed. Stocks in europe remain fairly flat, this after a volatile day of trade state side seize multiyear losses. And citi warns it could miss a key profit target. Meanwhile, u. S. Regulators give banks more time to make sure they comply with volcker rule. Oil prices climb on renewed tensions in ukraine. Youre watching worldwide exchange, bringing you Business News around the globe. Thanks for joining us here on worldwide exchange, as always, a quick look at how the u. S. Futures are faring ahead of the market. A bit of a bounce as far as futures are indicating p. 16 points higher for the dow, for the s p 500, just a point higher and for the nasdaq, around 4 points. We are losing steam as far as these futures are indicating. This comes on the back of around 1 losses for the markets. Yesterday, the nasdaq in particular dragged down in yesterdays session by a continuing selloff in the momentum stocks. You can see some of the big moves to the downside here from some of the big biotech names, even big tech stocks like amazon and google continue to be under pressure as you can see, minor losses compared to some of the bumper gains we saw, losses for the likes of applied genetics and aquinox, too. It posted its worse threeday loss since november 2011. Worse three hef day loss for the s p and the dow since january 27th. 4,079, the left f level for te nasdaq. Gartner says hes getting out of equities and sticking with cash and gold. Not sure what happened. Something happened between 11 00 and 11 15 that everything turned on a dime. Ive only been in the market for 40 some years but i havent seen anything quite like that in that short a period of time. In a bull market there are three positions you can have, really long, pleasantly long and neutral. Its time to be neutral. Its still a bull market. You dont need to be short but you dont need to be long at this point. I think cash is the right place to be. Interesting. This is not just about the big markets i was talking about there. Russell 2000 losing just shy of 5 , too. We are seeing some of the pressure in the smaller cap names, too. Back in europe, there are rumors about their Greek Economy and whether or not theyll be issuing longer term debt over the next few weeks. They sold 1. 5 billion euros, a yield the 1. 3 . Also selling 26week treasury bills this morning. Continuing to watch to see if theyll push out to longer debt, too. Banks will have until july 2017 to deverse clos. These securities are a way for banks to remove loans from Balance Sheet by shifting exposure to other investors which can be other banks. Loans are high yielding and are often used in leverage buyouts. The volcker rule caps banks abilities to invest in risky funds. Some clos fall under this rule. Now, its the end of an era but is it also a Security Threat for the business of banking . From today, microsoft will stop providing security updates for windows xp, with 95 of bank atms using the operating system, it could make lenders more vulnerable to security laps. Kayla tausche has this report. Reporter some 95 of all of the atms in the United States run using a 13yearold piece of software, called windows xp. April 8th is the deadline for extended support. Meaning the Traditional Software used in the atms will no longer be updated by microsoft. That has caused banks to rush to transition their systems. It costs about 3,500 bucks for each atm to be updated. They have to be programmed individual individually, meaning this say tedious process that doesnt come cheap, jpmorgan chase, bank of america, wells fargo and pnc have asked microsoft for extensions to get them to this point. Microsoft did end that support several years ago and federal regulators in october urged them to make this transition sooner saying it was up to therapy to take on this Operational Risk so that consumers would stay safe. In the meantime, some banks have not given estimates about how long the transition will take, only ensuring that customer accounts will stay safe. A sticky situation for banks and atm operators alike, once that wont be solved overnight. For now well send it back to you. From the bottom line to brand reputation, cybersecurity can pose a huge threat to businesses. 2013 was a year that more data records were lost than ever before. The report released later today show Security Breaches grew 62 over the course of last were and can have a devastating impact on large organizations. Joining us from new york to discuss the report is vp of the Information Security group symatech. You describe an explosion in data breaches, including mega data breaches where 10 million data records are exposed. Why are we seeing such an explosion and who specifically is being targeted . I think its best summed up by Willie Suttons quote, why do people rob banks because thats where the money is. As more and more Digital Assets move to the internet fabric, at tackers are moving there. The attack landscape is booming with these types of things. In fact, we saw over 91 of targets attacks over the last year in terms of increase. What that really demonstrates is a shift in behavior of these attackers. Theyre moving from target of chance to target of choice. Big game hunting. I saw a report from hewlettpackard saying were spending 46 billion a year on cybersecurity. This is not necessarily about were not spending enough, its how were looking at protecting ourselves and addressing some of these issues . Yes, thats spot on. I think the key for Many Organizations is looking at this as a unified security fabric. It starts with understanding where your information is, it then moves to leveraging your most powerful asset, your people, to be part of the solution. It also includes rethinking, reimagining and in certain cases rearchitecting your security posture. The sheer velocity, volume and variety of tax is quickly outpacing a lot of the security postures of organizations. I also saw an article that suggested we have a problem identified when a data breach happens. An average breach goes undetected for 243 days. How do we drive those numbers down . I think it starts with awareness. Many organizations out there have a good understanding of the information that theyre aware of. But that information starts to grow legs and cascade throughout their environment. And looking at that surface area is the key. I mean, at symantec were looking at some of the emerging threat landscapes. If you look at the explosion of cloud or big data or things thats stepping out of imagination and into reality, all of these new systems are providing new potential areas of attack and new data. Theres an article New York Times in the says that hackers infected the malware of a Chinese Restaurant that was popular with employees. How do you deal with that risk . Its limitless. I dont imagine your refrigerator will attack your washing machine anytime soon but what i can say, weve seen reallife attacks against Baby Monitors and security cameras. In certain security conferences, weve actually seen smart televisions and next generation cars get hacked. I think the key here is as the kinetic and physical world start coupling with the digital and cyberworld, theres an opportunity for greater damage. Its important to design security within those systems as opposed to trying to bolt them on later. Thats part of where were focused on, partnering with an ec ecosystem of the next world of appliances so theyre considering the security risks up front. Brilliant to chat with you. Vp of the Information Security group symantec. The center for auto safety says the company code in older models determines when the air bags deploy in a crash may improperly turn off the air bag if a driver or passenger is bounced in their seat. Separately, the detroit news reports gm will invest 450 million into michigan plants to boost electric car research and production capacity. Gm shares lower in the german trading session by around 0. 7 . Now, the u. S. Senate has passed a bill to renew jobless benefits to 2. 4 million americans who have been out of work for at least six months. These benefits expired in january. President obama is calling on the house to follow suit but House Speaker john boehner and other republicans oppose the measure, saying it doesnt meet their demand to include provision for job creation. Now, today is annual international equal payday, a symbolic day when womens earnings theoretically, emphasize that point, catch up to mens earnings from the previous year. It takes a few extra months because of the 23 jennifer wage gap that women typically face. And in what looks to be a timely announcement, president obama is set to unveil a pair of moves that his Administration Says will strengthen enforcement of equal pay laws for women. The key question is, does the government still need to take action on equal pay or is it down to the individual to fight harder for what they earn . Do women need to lean in . Thats the question. Josh tweets in to say, its up to the individual. If youre good enough, youll get paid what youre worth or youll leave. Freemarket. Im not sure i agree with that. You get what you ask for. Email us worldwidecnbc. Com. And why capital plans is causing new headaches for Michael Corbett, coming up right after the break. Beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right . You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Youre watching worldwide exchange. Welcome back to worldwide exchange, these are your headlines. U. S. Regulators vote today on tougher banking rules which could prove costly for the lot. The fed gives them two more years to comply with the volcker rule. The bank of japan says it will not roll out any more qe for now. It is ready still for action. And following heavy losses in the u. S. , asian markets trade lower while europe tries to get into the green. Another story were keeping a close eye on, russia is call on kiev authorities to put an immediate halt to military preparations in the southeast of ukraine, saying the buildup could lead to an outbreak of civil war. It follows an announcement by ukraines interior minister that, quote, antitrust operations are now under way in the eastern city of kharkiv. Oil prices moving higher on the renewed tensions. We have brent sitting above 106 a barrel. Meanwhile, u. S. Secretary of state john kerry will meet with top diplomats from russia, ukraine and the European Union over the next ten days in a new push to calm the tensions in the eastern region. Citigroup may be trying to lower peoples expectations for its profit targets. In the wake of the fed rejecting the banks capital plans last month, Mary Thompson is at cnbc hq with all the details. Mary, good morning. Good morning to you, julia. Citigroup is reportedly warning investors it may miss a key profitability target now that its not able to boost its dividend or ramp up a buy back. The Federal Reserve shot down the banks capital plan saying it failed to make improvements in Risk Management as well as manage potential risk to its business during a severe economic your honor turn. That makes it unlike ly this measure, a ratio of profit to equity shareholders, it is often used by investors to measure banks against each other when comparing to profitability. The figure is also important for ceo Michael Corbett who promised investors he would ramp up profitability when he took over for Vikram Pandit in 2012. Last year, the target rose to 8. 2 . Analysts say or actually came in at 8. 2 . The analysts say the company was counting on the ability to boost its Stock Buy Back Program to help meet that 10 goal. Citigroup agreed to pay just over 1. 1 billion to settle lawsuits. Citigroup shares have dropped 7 since the plan was rejected on march 26th. Next, google wants more people to wear glasses. Reports say the company will announce a glass for work program today. Well tell you what that is, coming right up. Mine was earned in korea in 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Without standard leather. You are feeling exhilarated with frontwheel drive. You are feeling powerful with a 4cylinder engine. [ male announcer ] open your eyes. To the 6cylinder, 8speed lexus gs. With more standard horsepower than any of its german competitors. This is a wakeup call. Google wants more people to wear glasses. The New York Times reports that the company will announce a glass for work program today. Providing more Business Tools for the web connected eyewear such as tech support. Glasses being adopted by more professionals such as emergency room doctors and police departments. Uber captured a niche in the car services business. Uber is launching a Courier Service in manhattan called uber rush. You can order a pack delivered on bike or foot anywhere in the city for 15 to 30, depending on the distance. How exciting. Quick check on the u. S. Futures here alead of the u. S. Market open, losing steam as far as the futures are indicating here. S p 500 higher by just shy of 1 . For the dow, 14 points higher. 1 losses across the board in yesterdays trading session. Now, the unofficial start to the earnings season begins with alcoa set to report Quarterly Results today after the light weight metals was company was dropped from the dow. The official start to the season begins with u. S. Banks on friday. Being kicked out of the Blue Chip Group hasnt been all that bad for alcoa as its outperformed new comers to the dow, including visa and nike. James globalfield joins us now. The bar has been set pretty low as far as weve seen from negative eps reports going into this earnings season. What are your thoughts. People expect it to fall around 2. 9 . We think thats probably overly bearish. Its due to a large number of companies releasing negative guidance. But that is about 22 of the market. Weve seen quite strong pmis recently. Thats encouraging and crucial to earnings is margins. That hardly suggests that margins are under threat, particularly now that unemployment still remains stubbornly high and by our estimates, margins dont get significantly squeezed until unemployment falls to 6 . Youre seeing some of the value play, the biotech stocks losing ground, particularly in the last few days. Do you expect this to continue or is this a temporary blip . Theres going to be increased nervousness. Certainly in the tech business there seems to be very nervousness. The downgrades have been around 7 . Theres some real concern there. This divergence between some of the old tech names. This is really important. What weve seen in companies that reported in the interim, Companies Like micron and oracle highlight this new versus old tech. Oracle is much more exposed to the desktop pc market. Micron had strong earnings results. I think that highlights this important divergence within tech. Its about being selective in tech. The semiconductors have done it great. The Philadelphia Semiconductor index, up 7 . Europe is a good example of that. Its a semiconductor lithographer. Theyve really benefited from that trended. Very quickly, overall for earnings season . We talked a little bit about it there. What are you expecting . Do you think the u. S. Markets continue to push higher . Yes. We see growth. Perhaps a bit more mix than usual. Will certainly beat expectations. For europe, very quickly . Europe is crunch point for europe. If we dont see earnings come through this time, all the indicators suggest they will, strong pmis, et cetera, improving Economic Indicator suggests earnings will pick up. If we see no real growth in earnings, revenues have been decent in this fourth quarter. If we see earnings missed benchmark low for the u. S. , crunch time for europe. I like it. James, great to catch up with you, james butterfill. A quick look at whats on the agenda. Fed officials to watch for, fed president Narayana Kocherlakota and chicago fed president charles evans. Stay tuned. Alcoa ceo klaus kleinfeld. Thats it for todays show. Im julia chatterley. Thanks for watching worldwide exchange. Squawk box coming right up. [ male announcer ] this man has an Accomplished Research and Analytical Group at his disposal. But even more impressive is how he puts it to work for his clients. Morning. Morning. Thanks for meeting so early. Oh, its not a big deal at all. Come on in. [ male announcer ] its how edward jones makes sense of investing. Good morning. U. S. Stocks, looking to make a stand after another sharp selloff led by tech and b biotech. Moscow warns ukraine that any use of force against prorussian protesters could lead to civil war. And the huskies of uconn are national champions, defeating the kentucky wildcats, 6054 for their second tight until four years. I think theyre fourth overall, not too many teams can say that. Its tuesday, april 8th, 2014. Squawk box begins right now. In one shining moment its all on the line one shining moment good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. U. S. Markets will try to rebound after two straight sessions of sharp declines. At this hour, though, the futures if you take a look, the u. S. Futures indicated slightly higher. Nasdaq futures up by just over 1. 75 point. The s p futures are slightly negative. This all comes after the dow fell another 166 points to 16,245. As for the s p 500, that index capped off its biggest threeday drop in two months with a decline of 20 points it closed at 1845. You are looking at the nasdaq. It got the worst of this. That index had its worst threeday decline. Negative for the year are the markets. We will talk about the Momentum Shift in just a few minutes. First, andrew has more of the top corporate stories