Construction, wholesaling and retailing. The latest number is 111. 2. This is higher than forecast. The market was around about 110. 5. The number is certainly improving. This after that drop that we saw back in march. 110. 7 is what we had. The pull back was related to the sanctions and also in relation to a strong number in february. Some people thought this was a natural correction that was starting to happen. Efo says theres no revision to that march number as well. This has been the reaction in euro dollar, a positive tick higher for the currency. Theres a key speech coming up later today by mario draghi which could further move the currency today. Alston shares are soaring despite the company denying reports that General Electric is seeking to acquire the firm for 13 billion. A spokes pernl says alston is, quote, not informed of any public offer for their the firm the firms sh bouygues is also up 4 . Lets go out to stephan. They are not aware of any offer, however, it doesnt say alston is not negotiating with General Electric. It is suggests that they would not be opposed t such negotiations. The company is constantly redoing the strategy options of its businesses. According to bloomberg, General Electric is offering 13 billion for the French Engineering Company and could make an announcement as early as next week. The question mark is regarding the french authorities, which are unlikely to approve such a potential deal. Alstom is the manufacturer of generator which is are used in French Nuclear power plants. For that reason it may be considered as a strategy sector and, therefore, not open to merger or acquisition with a foreign company. Alstom is the maker of the highspeed tv, we dont see how the new economy minister, very protectionist, would support such a deal with an american company. That being said, the market Still Believes there is something going on. Alstom gained on the cac current. Stephan, thanks very much for that. Elsewhere, mexicos america mobile says it will mac a bid for the outstanding shares of telecom austria. The move will allow the multibillionaire owner carlos slim to consolidate his foothold in europe as his Company Faces increasing regulation and competition in latin america. Shares trading higher on the news today. Other earnings news out today, starting out in france, first up, michelin has posted a drop in revenue for the First Quarter after an increase in sales was offset by the stronger euro. Weakerthanexpected sales were cited for the Third Quarter. The french spiritsmaker also commenting that the currency head winds in emerging markets was an issue. Michelin is 3 lower. Lets see whats been happening with some of the other ones on the markets. The electrical gearmaker schneider, says business continued to grow in the double digits in emerging markets and the 3d Software Specialist has confirmed its 2014 outlook after posting First Quarter revenue of 500 million euros. The shares trading 1 weaker. Novartis has posted a 24 jump in net profit for the First Quarter. Boosted by the sale of its blood transfusion test unit. The shares lower by 18. 7 . Rival, astrazeneca, trading higher despite a 17 drop in its earnings. Investors buying into potential advances in its cancer drugs. The shares bouncing 2 plus percent and anglo americans apple came in broadly higher, 11. 3 metric tons in the First Quarter, but it was copper production in focus, up 18 . The stock has been driven to the top of the ftse today. Brewer heinekin, revenue up 3. 4 to 4 billion euros, below analyst forecasts. The shares softening up a little bit today. Two major tech firms in the state reported numbers after the bell and seemed to have impressed investors. First up, facebooks First Quarter profits beat forecasts. Its revenue rose a whopping 71 , thanks to a big job pr ad in revenue. Mobile ads account for more than half of total ad revenue. Shares trading higher today, 3. 6 today. Apple shares trading higher, 6. 7 . This all on the back of betterthanexpected revenue in the Second Quarter. The big surprise was a 7 for 1 stock split. Josh lipton filed this report. Reporter apple reporting and beating expectations and pleasing investors. Im here in cooper tito, california, where i had the chance to speak with tim cook about these results, 43. 7 million iphones, better than the street was forecasting. Tim cook telling me he saw broadbased strength, 5c, 5s and pleased, he told me, with the performance of china mole. The big news here, tim cook also telling me, listen be with we have more money than we need and apple announcing that it will expand its Capital Return Program over 130 billion, increasing its Share Repurchase authorization to 90 billion and boosting its dividend by 8 . Apple also announcing a 7 for 1 stock split. Tim cook telling me, listen, he realizes Retail Investors might want to own apple shares but the price may be too high. With this hes saying we want to make our stock as accessible as products. Investors, analysts, traders, want to know when the next big new product is coming. Tim cook says he wasnt providing clarity about products or services but new products are in the pipeline, onces that hes excited about. Acquisitions, tim cook saying theyve done 18 in the past 24 months. Most have been small but hes not opposed to doing a larger acquisition if it makes sense. They are on prowl for more acquisitions, he told me. Josh lipton, cnbc, cupertino, california. Barclays investors gather in london for the firms agm. We take a look on the hot topics on the agenda, including bank of bonuses. Could ecigarettes be going up in smoke . We cross to washington to think of why the fda is thinking of banning some sales. Turkeys central bank meets on rates. Why one guest says investors should be wary about turkish stocks. And the second polling day begins in india as voters head to mumbai. We head live to the city to check out the vote and some of the action there, later on the program. This is the turn on european markets this morning. A bounceback after some of the selling that dominated the ipd seize yesterday. A whole bunch of m a in the backdrop, rumors, conversations about negotiations in some of the big stocks, france first up with alstom. This is how the data plays. The French Market as a result, 0. 17 higher. The likes of the the italian stock market, 1 higher. The xetra dax firming up. The ftse also up. Copper Production Output pushing that to the top of the ftse this morning. Some of the other individual plays, if we can switch over the boards, these are some of the big stocks on the move. Scania shares moving this morning. It will accept 200 per share. The decision comes a day after the same offer. Telekom austria, up 6. 75 on the stock. A bid will be made for the outstanding shares. The move will allow the multibillionaire owner, carlos slim to expand his foothold in europe. The yield lower, just over the 3 mark. We had news out a short time ago from bank of spain, estimating that growth in the First Quarter was about 0. 4 of a percent on quarter, about 0. 5 on year. Elsewhere, you can see a selloff in some of the other prices. Bonds in particular, 1. 54 on the tenyear. Most of the action has been at the short end of the curve. Today weve seen a reaction to what we had. Yields pushing up here. This is after the efo business index came back firmer. The commentary suggests ukraine starting to have less effect on confidence. Elsewhere, forex markets, we see a speech from mario draghi, up 0. 1 . Euro has been stuck in a stubborn range of late. The news today lifting it out of the lull. Elsewhere, the dollar, look at it on the back of the yen. Not a strong move there. We are seeing movement in the pound as well. Lets check in on the action out of asia today, Sri Jegarajah joining us. Its broadly a fairly negative day so far. You would have thought with all the excitement coming from apple and the stock split and the buy bu back and the results from facebook and apple, youd expect to see more of a pop in the apple componentmakers and the halo effect over that broad universe and sector. We didnt really see it. It was a fairly muted spns out here in asia. Broadly, weaker as i said for the Greater China markets and the nikkei 225. Theres a very specific story on the trade front that the market there was reacting to. Disappointment that we didnt really get breakthrough in the dialogue on the tpp between the u. S. Side and the japanese side despite the fact that president obama is in japan currently as part of his tour of the region. The two sides are still apart, arguably, over the issue of automobiles and agriculture. There is a strong agricultural lobby in japan. No deal yet. No breakthrough, although they are going to continue to hold ministerial meetings and dialogue. Also, preearnings caution in japan as well. The real action, karen, was in the currency markets over here at the reserve bank of new zealand raised the ocr by 25 basis points. We saw a big pop in the dollar and we saw hawkish commentary as well. A little bit more interest in that long cross against the aussie dollar in the market. Back to you now. Thank you very much for that, sri. Joining me around the set is johnny meter, the chief Investment Officer at access investment management. Great to have you here to talk through the earnings news, the m a activity out there. Deal making is a good sign for the overall market. But i think one has to look beyond that into the detail. Some of these cases are, i suppose, positive, stroke aggressive and there are some which are selfhelp, healing, maybe trying to change their positions. When you look at the overall market and see lots of m a activity, it doesnt necessarily mean the market is cheap or expensive. Each case has to be judged on its own merits. The risk is to look at the activity, therefore, equity is achieved. Thats lulling into a false sense of security. Manufacture us trying to gauge from the next price action is on some of the volatilities. You have the deal making, earnings that are coming through, showing positivity. Why do you think well still get the volatility in may . Volatility will come through, seasonality you get that, volumes do subside. Generally weve had a good run in the equity market and i havent yet seen good substantial evidence of earnings expansion. There will be multiple expansion, spikes in earnings. Weve also seen the eventdriven activity has been how the market has responded. The news flow equity activity has been deal related or event driven, whether its earnings, surprises or shocks. You havent actually seen a rerating in the overall equity market for quite a while. Its about a lot of brokers trying to get in or out of stocks. Theres a lot of broker response rotation going on. And you see that a lot with revising the price targets for no real reason, sector rotation really that doesnt move the overall market greatly. Thats not going to change very much. Its a symptom of the fact were reaching a little bit of a ceiling, the hedge room is limited until we see a little bit of a change in circumstances. You make the point, theres a lot of market complacency out there. We had the selloff in the technology sector. Then we get great numbers after hours from likes of facebook and apple. Much of that is sentiment driven for the tech sector. Do we have too much of the stocks . Will we see a buy back because some of the big ticket names have come in with decent earnings . Facebooks success in mobile was relatively reassuring for a lot of investors who thought that there wasnt going to be a good transition from concept to actual revenue. And actually its one of those businesses that seems to have successfully made that transition. I dont think its i dont think its the center case. I think in a lot of these cases, businesses, are going to succeed in making that transition. Youll still have momentum companies, where they are still valued on pricetoconcept or pricetohope. I think you still have those businesses as being risky, overpriced. If theres bubble talk, its in pockets like that. Its not the overall markets. If there is any bubble that will pop, it will be when these companies that dont actually make the transition from hope to actual real revenue, then that realization will mean the share prices get rerated. Facebook is actually a Success Story so far. Tell us about what youre doing here. Theres a couple stocks youre looking at. Suez and violia. I like what they do, waste management, i think its an industry thats going to grow. Is it safe at the moment though . I dont mind safe. If you look at the share price, safe has been very rewarding. Im trying to look for riskweighted business bets that actually succeed in the long run. The dividend yields have been relatively secure. Capital appreciation has been solid. Weve taken a little bit off on both, because the appreciation has been quite stiff on both. But i think theyre both wellrun businesses. Managing both those exposures. Thanks very much. Johnny, youre staying with us. Get in touch on Worldwide Exchange today. Were taking your correspondence. If you have thoughts on the earnings, the m a activity today. Meantime, Turkeys Central Bank is expected to keep its rates on hold and its Monthly Monetary Policy Committee meeting today, even though political pressure is unmotting to slash rates, the central bank is expected to stay put but may look to add liquidity. Our next guest says the operating environment for turkish banks has become more challenging given the tighter Monetary Policy. We have a credit analyst at Commerce Bank, he joins us now around the set. Looking through some of your research this morning suggests that lower growth, series of challenges are facing the turkish Banking Sector but a lot of this might be priced in. Paint the picture for us. Clearly the turkish banks operating performance has become a lot more challenged. Were starting to see much slower growth. Operating margins are going to be hit because of the sharp Interest Rate hike. Fundamentally still the sector does maintain quite sufficient buffer when it comes to capitalization. The exposure of the corporate loans of the banks, i think this actually is quite manageable at least for time being. Overall, i think after these very difficult second half of 2013, i think most of the pressures now have been already priced in, into the credit spread. Lets sift through some of the comments youve made. There is a theory that many of the big corporates take on Foreign Exchange loans so they can get the loans external to the local currency loans. Many of these banks have hedged those positions, so theyre not carrying the exposure. Thats right. On their Balance Sheets, the banks are fully hedged. They are of course indirectly exposed because of the corporate loans. It means one of the corporates, for example, defaults, affecting its ability to pay down the loan. The bank will have to take a hit. Its important to understand most of the big loans are given to the large turkish corporates. In a way, all of these companies, they do have a large percent of revenues. To a large extent i would say they are hedged. So the risks in that case are manageable. Also lets not forget turkish banks have went through the cycle in previous devaluation scenarios where we havent seen major defaults. Theyre more sophisticated when it comes to effects these days. What about margins . The hike we had by the central bank was a shock to the system for many of the banks. Getting a read on the language, youve got the politicians pushing for less Interest Rate hikes. The central bank made the big move. Where are Interest Rates going and what does that mean for bank margins . If rates stay as they are, no one expects an increase. Perhaps there might be a decrease. Thats, again, questional. There will be some pressure on margins at least over the next six months. Theres a maturity because there are deposits and they are priced with loans, it will take another three to six months to catch up. We expect operating performance to suffer in the first half. Thats, again, not going to be detrimental. I dont think the banks have capacity to withstand these pressures. Whats the impact been of the political instability . There might be suggestions that there might be a swapping form with the president. Thats been brought up. What does this do for the Business Community and the consumer . It hasnt touched the operatinging performance of the banks as of yet. In terms of sentiment, its still one of the main drivers, key risk drivers and that can cause volatility down the road, especially if we see an escalation of this. When it comes to the operating performance, i dont think its really that much of a concern. Johnny, let me get you back in here before you go. Emerging markets in turkey falls into that category. Do you have feelings about this exposure . Turkey specifically we dont have exposure. Its not a function of turkeys own valuation. Its just we dont have our own people on the ground there. Weve been investing on and on for 20 or 30 years. Unless you can see, touch and investigate in person, the investments you have in these countries, its very risky to try and play that game. There are new developments in these areas, etfs that spread the risk. There are funds that diversify your risk across a number of issuers. Its quite difficult to take at face value things if youre a remote control. For that reason we havent really had any exposure in turkey. I appreciate the time with both of you. Thank you very much for joining us. The credit analyst at Commerce Bank and also thank you very much to johnny mehta for joining us, too, from axis investment management. Other stories were watching, Warren Buffett says he abstained from voting on cocacolas controversial new Compensation Plan even though he thinks its excessive. On wednesday, coke said 83 of shareholders approved a plan. Critics, including activist investor David Winters said it would dilute current shareholders too much. Buffett says he didnt want to vote against the plan because he didnt want to show that. I even muttered a yes on mergers i didnt think made any sense. It happens. Berkshire hathaway is cokes largest shareholder with a 9 stake. Buffett says he has no intention of selling any shares. As for the role of activist investors, buffett says theyre getting stronger. The ceos are terrified of activists, i can tell you that. Theyre all talking to Investment Bankers and lawyers, saying what do we do about this. Who is in the right or is it tough to paint all activist investors with one brush . Theyre companies where management has not done a good job. Im not referring to anything specific here. Certainly if people want to step up and buy stock in a company, its hard to argue with their right to do that. Asked if he agreed with David Einhorns of a possible secretary tech bubble, buffett said he doesnt always understand tech valuations. Buffett rejects the notion the u. S. Stock market is too fluffy right now, as the major indices reapproach their alltime highs. Coming up on Worldwide Exchange, including next, bank of bonuses in the spotlight as barclays investors gather for the firms agm in london. Those details, next. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Youre watching Worldwide Exchange, bringing you Business News from around the globe. M a talks sends alstom shares soaring. The french trainmaker says its not aware of any offer after reports that ge is planning to buy the firm for 13 billion. Telekom austria shares jumping hires amexican billionaire carlos slim reaches a deal to take control of the firm. Astrazeneca stays silent on a bid approach from pfizer. New cancer drugs sending shares higher despite a drop in earnings. Investors cheer apple and facebook, shares jump in afterhours trade. The iphonemaker launches a shock 7 for 1 stock split. Weve been looking at a stronger picture across european markets this morning. That continues into the session. 0. 5 on the ftse. Earnings driving the momentum here. The xetra dax 0. 75 . A lot of m a activity, alstom one of the top movers for the french stock market. Reports about a possible ge bid and the italian market ahead 1. 25 . On bonds, a lot of movement, particularly on the german market. We have bunds on the yield. This after the efo Business Confidence index came in stronger after a dip last month. It seems the concerns around ukraine and sanctions on russia have abated. Elsewhere we have gilts, 2. 7 , the price saying italy 3. 12. The efo sentiment gauge edging higher. 138. 37, a little bit to bust it out of its trading lull of late, sterling going with it, firmer in the session. Not a lot of activity in dollar yen rates. You have dallas swiss and the Australian Dollar also peeling back as well, pushing down from that 83 handle. Alstom shares are soaring this morning despite the company denying reports that General Electric is seeking to acquire the firm for 13 billion. A spokesperson says alstom is not informed of any public offer for the firms shares. In the meantime, bouygues is trading higher in the market today. Earlier, the squawk box team caught up with the ceo of French Software firm symptoms. He had this to say. Theyve been doing great things in this area. The tax level for enterprise. Its 38 in france. You see the gap. I can still do 30 operating margin, having to pay this level of taxes you could imagine what i could do with that money. Its well known as an executive in france ive been claiming we need more job flexibility on the tax on the company. I confirm it. Is that why the change of legal status for the business . That youre changing it to a european country rather than a French Company per se . Does that have impact on your Tax Obligations . Our shareholders in the company, we believe in europe. I think having dassault system, being a european country is good. We have so many labs around europe, its good for the people. They know we have an identity that corresponds to where they are living. Will we be able to optimize and improve the tax aspect . We have to find ways, you know, 38 is too much. A lot of ifs here. If ge does bid for alstom, if the french government blocks the bid, because it says this is a strategic french business, would that be a shame, do you think . Does this government need to move on and stop talking about strategic french businesses . I think the government will be smart enough to think about the longterm interest of this industry, and i think despite the political statement, the economical decisions will be smart. This is what i wish. I dont think there is any reason, specific reasons, to block something that could be of best interest for the industry. Elsewhere, mexicans American Mobile says it will make a bid for telekom austria. The move will allow the multibillion yar owner of American Mobile, carlos slim, to consolidate his foothold in europe as his Company Faces increases regulation and competition in latin america. Shares have been trading higher on the news, bouncing 6. 75 . And barclays is under pressure to reign in its spending on bonuses. Ceo Anthony Jenkins is expected to see protest at the annual meeting, which kicks off shortly here in london. Kick this off for us. There was a big furor about the increase in bonuses by about 10 last year, even at the same time profits fell about 30 plus percent. Sets the scene for today, doesnt it . I think theres been a lot of controversy around barclays. This is a bank that Anthony Jenkins took over and promised to reform it, promised to make its Investment Bank come under control. Were talking about really the excessive pay, paid in bonuses. However, as you said, we saw that despite all of those pledges, that he did under the transform program, recently he awarded the bank and the Investment Bank in particular an increase in its bonus, thats 2. 4 billion pounds, despite the fact that they seem to be doing worst than they used to be. This is at a backdrop where if you look at the dividend payout since 2008, which used to be 34, its now 6. 5, shareholders are increasingly feeling frustrated that he hasnt delivered on his promise. What we have today is the agm. Theres going to be about four parts to that. Now, in terms of the part that asks shareholders if they are going to agree to pay twice their bonuses, we think hell have overwhelming support. Right. In terms of the binding pay policy, we think hell have overwhelming support. And in terms of director renomination, which has actually been controversial, where shareholders and investors are likely to register protests votes is in the nonbinding report, the remuneration record, which is backward looking. I think a number of key investors will be highlighting that this hasnt actually followed the promises jenkins set out. Let me bring you in here. There is talk of a death spiral, the excuse he used to pay out those bonuses. There were zero bonuses for some in the bank. This goes to the report youve been talking about where youre suggesting there will be more cost cutting throughout the bank. Going back to what you said, there are three things which i think the Management Team did the strategy last year. The first was income itself. When you think about cost, theres always relative to income. They had planned for single digit income raise into 2015. Now youre seeing probably a 15 to 20person drop in that income. Basically that baselining is over. The second thing is, leverage ratios. You thought it would be further out. It almost seems like regulators and investors are pushing it in in terms of capital pressures. The third compensation, the u. S. Did very, very well in Investment Banking last year. One of the best years for Investment Banking in the u. S. They said the pay structure for compensation in Investment Banking throughout. That Investment Banking compensation was 7 . No one guessed about it. This was a structurally declining industry, so compensation would go down. This is not across the board. The conversation i have is that there were certain divisions, even if you were outperforming as an individual, it made no difference to your fortune to the bank and whether you had a job if the Overall Division was going to get cut because it was underperforming or the exposure was too high for barclays. Correct. If you think about Investment Banking. They are making a lot of money in the u. S. , which means the lehman franchise is where they are doing really well. Chances are if youre in the fixed income franchise in europe, or the fixed income franchise in new york, there wou would have been a difference. The marginal bet is still very high. You have to take head count out. Thats where the next attention is. Barclays is at a really difficult junction. You cant overemphasize how hard a task barclays executives have. This is a bank that used to do extremely well. Barclays capital. In all the areas that are now under the focus of regulators, under the focus of policymakers and politicians. They had an incredibly lucrative tax division. They had to close that down, not because it wasnt profitable but because it was just awn palatable in the new environment where barclays is trying to be to the goto bank, the friendly bank. Then they have divisions that were their bread and butter, that have actually declined hugely. Whether thats a cyclical issue or a fundamental difference in the way those businesses are run is yet to be born out. It doesnt look good. They spent a lot of money, this is what you forget, they spent a lot of money two, three years ago, paying people two years, one year, massive bonuses to lure them from the other banks. Now theyre going to have to fire them all. The Investment Bank is amiss. But what about the retail bank . Youve raised the point in some of your research, even when it comes to loan growth and improving credit cycle, barclays will lag behind. You have a bank trying to reweight to the retail side of the business but its not scoring goals there either. Thats correct. In retail there are two franchises, one is the Retail Banking franchise. The thing is, you have a feel for five years. Theres no competition in the uk. More than 50 of the business is done in the uk. Now every bank wants to do cars. You cant understate the fact that barclay car has been the ground role. Its been positive. That margin is going to come down. At the same time, because you have a leverage ratio problem, you cant go out and ride a lot of mortgages, the london mortgages, refinancing that, thats not your game. Why . Because it gets trapped in leverage ratio. When youre solving for Balance Sheet and capital. At the same time, competition is coming up, lourdes, rbs. I think this spells out how difficult a task its going to be to try and convince shareholders. Thanks so much for joining us, both of you, around the set. Thank you. Elsewhere in the sector, investors in Deutsche Bank are ramping up pressure on the lender to raise capital ahead of a eurozone wide stress test, thats according to the ft. There are said to be fears that the regulators will force the bank to raise equity following at set quality review later this year. Barclays and Credit Suisse have been compelled to lift regulators in the last two years. In asia, u. S. President barack obama has weighed in on the dispute between china and japan over the islands in the east china sea, explicitly stating the islands fall under the treaty, obliging the United States to defend japan if attacked. We share a commitment to fundamental principles such as freedom of navigation. And respect for international law. And let me reiterate that our treaty commitment to japans security is absolute. Article 5 covers all territories under japans administration, including the senkaku islands. Obama is the first u. S. President to spell this out. Beijing was quick to hit back. Chinas Foreign Ministry warned the United States to not take sides and respect the facts regarding the dispute. Elsewhere in the region, sony is venturing into New Territory according to the nikkei. The electronicsmaker is planning to try its hand in real estate starting this august. Lets get more on this story, joining us now we have a reporter from the nikkei, live from tokyo. Reporter named sony real estate, the newly established firm is 100 subsidiary of sony. The nikkei learned the firm will be fully equipped to meet the requests of individuals who want to sell or buy property. The goal is to reach 500 million in annual sales in five years. The project is a part of sonys initiative to create new businesses that established a unit in charge of coming up with ideas and will aim to launch more than ten projects within three years. Another venture under discussion is the toy industry. Now, sony is struggling to turn around its electronics business, by branching out into ear fields is hoping to diversify its revenue base. Thats all from the business report. Mumbai heads to the polls. We are on the ground in indias biggest city. Thats coming up next. Youre watching Worldwide Exchange. The markets in india are closed as mum boo he closed as mumbai heads to the polls. Results are expected on the 16th. When i was in delhi a few weeks ago, there was enormous fanfare around the elections. Whats the sentiment like there on the streets today . Reporter well, the sentiment we figured out, everyone has come here to vote for change. Everyone feels that their vote would make a difference and people are coming out in large numbers to vote. 11 states and 1 union territory, one location, mumbai. Weve been tracking some of the industry lists and corporates have been coming. All of them have been coming about voting for change, voting for a stable government and voting for a government that would help revive the economy, deal with the economy paralysis and also the investments that have been stuck. But just lets take you through the elections in india. We are currently in the sixth phase of election. There would be an overall nine phases of election in which the country would go towards. Today about 117 and 11 states have gone towards. Three more phases are remaining. On 30th of april, 7th may and 12th and. That is really huge numbers. If you talk about the total Voter Registration that india has seen for this election, its about 81. 4. Which has seen an increase of today, some of the key weights with be political heavyweights in india are contesting elections, two very big names that i can tell you about. One is the right wing leading candidate whos fighting elections, which is essential state of india. The other big name is the chief minister of the most populous state of india. As we speak, this candidate, has filed his nomination by a temple town, which has been swept over by a central brigade. Weve seen some am of good voter turnout in some states. Mumbai is somewhat slow, about 16 turnout till the afternoontime. Back to you. Thank you very much for the update. Lets start into a conversation a little bit more about how the markets are viewing the elections in india. Typically in the past, weve seen very low voter turnout in mumbai. 41 in the 2009 election, for instance. This time, it seems as though the scene has been set for a lot of people to turn up at the ballot. What do you think this says about the vote for change . Mumbai itself is normally quite disappointing, considering that this audience is more clued in and wants to change. Even now if she was saying, your reporter, only 16 , thats pretty low. In general, the voter turnout has been very high, more like 10 to 15 higher than last time, which means on a base of 50 last time, its 65 . Its 30 more voter than last time coming in. Basically, as we expect, everybody wants a change because of the policy paralysis and all the problems of the previous government or the current government has faced and presented to india. These issues have been noted by international investors. When it comes to elections, many regional issues and agendas seem to dominate. Whats going to be key for mumbai . The thing is, mumbai as a city, its basically more selfcentered in some sense. And its fortunately thursday, friday, i think the voter turnout would have been even less. Across india, theres a wave, triggered toward the excitement, but also lean towards frustration over the current government. Taking a look at the stock market and how its been performing this year, there were softeners in february but the stock market has since climbed its highest levels so far this year on the eve of the election. Is this suggesting that investors are also buying into the expectation that more will happen postelection . Well, i think a lot more will happen. I think this is the start of a threetofiveyear run. You get a continuous component as we used to get in the past. In the last three years, the indian currency dipped by more than 30 . Overall overhang on Foreign Investors coming into india. Generally, if you look at the market, its up only about 7 , 8 this year. It is at an alltime high in terms of indian rupee terms. So i dont believe that the market should be viewed as an alltime high. If you look at other factors in terms of what a company, an alltime high market, that should mean domestic inflow, ipos, a lot of brokerage volume, a lot of volume on the stock exchange, none of that is there. Its just a nominal number has been reached of an alltime high. Really none of the accompaniments are there. When you go to india, i was in delhi a few weeks ago, its pretty obvious how massive the challenge is for a government, the major issue of poverty, the major corruption, the environmental issues. Where does the next government start . Well, the thing is to look at this new government, the new leader as follows. Lets say you are appointing a ceo for companies, the best candidate for that would be ideally a ceo of maybe one of the subsidies of that company which has done well, whether than having somebody from the Planning Department or Economics Department or a controller becoming the ceo. The confidence comes from the fact that in their own state, that theyve done a good job. That doesnt mean all problems of india will be solved and heres the magic solution. Theres so much a wave in this. Thats the wrong way to look at it. The best way to look at it, he has experienced, although on a slightly smaller level. India will be given more time because of the change of management. There are many things to be done. All will not be done but some things need better governors in our administration. Hes supposed to be quite good at that. I believe thats called a honeymoon period. Thank you very much for joining us today. The south korean economy grew 3. 9 , narrowly beating expectations. Seens of momentum in the economy could put pressure on the countrys central bank to raise Interest Rates. Lets go to june yoon. Tell us about the pressure on the credit side. Reporter sure, karen. Thats right. 0. 9 faster than the previous quarter, above Market Expectations and compared to the previous year, 3. 9 . This is the biggest increase weve seen in three years. So this is showing a steady pace of growth, a bok director general says the growth is on track as expected by the central bank. Like you said, the momentum were seeing in the economic recovery could mean a faster pace often flags which could then mean earlier than expected rate hike. Going back to the numbers, if we break down the 0. 9 increase, we saw that both exports and private consumption were strong in quarter one. Exports increased, especially in the tech sectors and also with petro chemical products. A 1. 7 increase onyear actually. This is even despite the 8 gain against the dollar in the past year. Private consumption was also up, especially cars being one of the most bought items within korea. The bank of korea has raised its 2014 growth forecast to 4 from 3. 8 and is expecting an even faster 4. 2 growth for next year. Bank of korea governor said earlier this month that he sees inflation picking up as well, into the bank of koreas target range of 2. 5 to 3. 5 and this is when the governor says he may consider a rate hike. Back to you. Thank you. June yoon out of seoul today. Tomorrow, obama heads to korea in his second stop of hiationen tour. We have inflation data out of japan. On the earnings front, honda, mazza, also with reports from ag bank ccb and baidu. India results from icici bank and suzuki with numbers out. Plenty more to come on the show, including slicing apple. Welcome to Worldwide Exchange, im karen cho. These are your headlines from around the world. M a talks and alstom shares soaring. The french trainmaker says its not aware of any offer after reports of ge planning to buy the firm for 13 billion. Telekom austria shares soaring. Investors are taking a shine to apple as the company easily beats earnings forecasts and announces moves to return more of its massive mountain of cash to shareholders. And making money for mobile, facebook beats the street with its latest Earnings Report as the social media joint generates nearly twothirds of its ad revenue from mobile devices. Youre watching Worldwide Exchange, bringing you Business News from around the globe. If youre just tuning in, thanks for joining us. Heres how markets are shaping up. A little bit of green on the board for all three indices. Enormous focus on the reaction to earnings after facebook and apple reported after the market closed yesterday. A huge focus on some of the indices today. Elsewhere in european markets, a bit of a positive bid, too, this after the selling we saw across the markets yesterday. Earnings a big driver out there. Also some of the m a activity, a lot of the gains seen across on the periphery led by the likes of the italian stock market, a number of big stocks moving today. Alstom shares soaring, despite the company denying reports that General Electric is seeking to acquire the firm for 13 billion. A spokesperson says alstom is, quote, not informed of any public offer for the firms shares. You can see a 13 plus percent on the boards. It was higher on market open today. Meantime, bouygues also trading higher. Telek telekom austria also higher. Carlos slim bids for the outstanding shares of the company. You have the deal activity today. Scania shares also moving higher. This on further m a news, a big scania shareholder has given its backing for shares in the firm which it doesnt already own. 10 plus percent there. Particularly on the back of what was a decent read on Business Confidence. The efo Sentiment Index coming out today. The yield pushing higher, 1. 54, the tenyear. In spain we have news out from the bank of spain, estimating that First Quarter growth was in the order of 0. 4 on quarter, about 0. 5 on year. The yield there lifting to 3. 07 . Foreign Exchange Markets seeing the lift high on the back of the ifo numbers coming out. Not holding. We were higher by 0. 1 . Were peeling back from that level. Caution coming up to comments in the next hour or so from mario draghi from the ecb in a as to what he might say, further extraordinary measures from the central bank. A cautious focus there. Lets get out to Sri Jegarajah in asia for more on the tone that way. Less confident than the buying were seeing across the european market, sri. Thats right, karen. Broadly, the dust has been allowed to settle on most of the regional indices. They are settling lower. Nikkei 225 is the rank underperformer, down by almost 142 points there. We are seeing resilience of the hang seng and the s p asx 200. The broad themes with quite surprising given the blowout numbers that we saw from apple, the excitement state side in the afterhours trading as well, after they announced the stock buyback and also the stock split. That similar story for facebook as well. It didnt really translate into gains in the apple component stocks. We didnt really see much of a halo effect out here in asia. A lot of the component stocks, a lot of the manufacturers that make the little gadgets that go inside your ipods and iphones and the ipads didnt really have big takeoff today on the taiwan markets and on china, singapore and japan where they are listed. The other story bringing japan down and the nikkei 225 was not great dealer progress over the tpp. We are down to the last mile with the transpacific partnership. Its all the last mile in my experience in these trade talks that always is the hardest one, despite the fact that president obama is in japan and hes trying to create momentum. Theres still sticking points on automobile tariffs and also on agricultural tariffs. Remember, in japan, the agricultural lobby is a strong one. Although obama wants to see some movement and momentum and bold steps taken by his trade negotiators and japanese counterparts. That was instrumental in dragging down the japanese market. There was interest in the foreign currency excuse me, the fx side of the trade out here in this region. After the reserve bank of new zealand increased rates, the ocr by 25 basis points. We did see an associated good pop in the dollar. I think you very much for that, sri. I mentioned we had a dropoff from some levels as mario draghi is talking about further qe and also negative Interest Rates. Let me run you through some of the immediate flashes across from dragly in this speech today. He says the governing council has committed unanimously to usingen conventional and conventional instruments to deal effectively with the risks of a too prolonged period of low inflation, setting the outlook again there. It would be the context for more broadbased asset purchased program. Well be watching the inflation rate as a result. Talking about that, the policy stance could be addressed with lowering of the rate, including negative deposit rate. This has been much speculated about, again, being flagged up by draghi. Impairments of policy transmission could be addressed with targeted ltro or abs purchase program. Again, putting those options on the table. He says broad based deflation risks are not what we see in the euro area today. The ecb cannot make policy in favor of subsets of these eurozone countries, suggesting there is a drift in comparison across the board. Dont forget, germany had fairly good pmis yesterday. France offsetting some of that. He says a written account of the ecb policy meetings would be useful but should not attribute positions of individual council members. Many people have been voting at the council meetings. He says new bank loans or abs purchases may be best if the credit channel is impaired. Thats been the reaction on markets, euro is treeing to claw back some territory. Was there anything new in the market . Its still jumping, baiting for further news of kiwi. We may not see any sizable traction that sticks in euro dollar. Some numbers crossing out there from nokia, just quickly, the microsoft deal is closing on friday. The india factory still has its frozen asset. Let me just move on to another smartphone maker, apples Second Quarter profit rose 7 with earnings of 11. 62 a share on revenue of 45. 6 billion. Both easily beat forecasts as did apples Third Quarter guidance. The company sold 47. 3 million iphones, faster passing analyst estimates, thanks in part to sales in china which rose 13 . Ipad sales fell short of expectations. Apple boosting its buyback prom by 30 billion, raising its Quarterly Dividend by 8 . It announced a 7 for 1 stock split. The companys first split since 2005. Ceo tim cook says apple boosted the buyback because it views its shares as undervalued and apple rose 8 in afterhours trade. This is the picture in frankfurt, not quite matching up but still close could 7 higher. Facebooks First Quarter profits beat forecasts as revenue rose 71 . That was thanks to an 82 jump in advertising revenue. Mobile ads now account for 59 of total ad revenue, up from 30 a year ago. Facebook says it had 1. 28 billion monthly active users at the end of march. A majority of them are accessing the site on mobile devices. Management says dont expect ad formats such as a mobile ad or video ads anytime soon. The Facebook Says its cfo is leaving to pursue an opportunity in the health care sector. Hell be replaced by vp of corporate finance. This is how facebook shares are faring in frankfurt, 4 plus percent. Lets discuss both of these numbers a little bit further. Pedro, lets talk about some of the numbers. Apple in particular. Blowup number. No one expected the china numbers to start to show through on the iphone sales just yet. What a surprise. We got it. Good morning, karen. Yes. I mean, i dont think a quarter makes a Growth Company back. I think the numbers were a positive surprise but i think expectations were quite low. I think its quite interesting. When i look at apple as an investor nowadays, what dow i see . I see a company that for the past four years hasnt come out with a new product range. I mean, the ipad was the last product they came out with. I see a Company Whose lost its charismatic and creative leader three years ago and who doesnt seem to have gotten itself back on the track of innovation that it was. I see a Company Whose products are coming with an incredible number of glitches as compared to when steve jobs was with us. I mean, im not terribly excited about it. I know you like to Short Technology stocks but if i can play devils advocate here, we have a buyback, a stock split, fuel in the tank for the iphone, potentially more down the track from china. Didnt this at least distract you away from the innovation and the pipeline for change down the track . Sure. Just to clarify. Im not intending to short apple anytime soon. The buyback is another example of misuse of corporate funds. That criticism i give to not only to apple but all the companies who are doing buybacks. In apples case, it has one of the largest stockpiles of cash out there. Its a huge amount of money, why not use some of it for investors . Why not wait for the market selloff, the general market cycle to be on bearish mode . Where were the buybacks in 2009, late 2008 . No. Guess what, they were all done in late 06, early 07 when stocks were at multiples of book than a fraction of it. 71 stock split, effectively the price is cheaper in the market. Some say this could be a precursor to a listing on the dow. Many of the stocks are priced around the 80 mark as well. If its included in the likes of the dell, there has to be an index buying apple as well. From a technical perspective, i wouldnt be surprised to see apple doing well over the next three, four, months. Because of the stock split and the buyback. If i were an investor of apple would i be happy that they were doing a buyback when the shares are pretty close to alltime highs . What happened to ceos who are capital advocators . They are patient enough to stay with the cash there. Plenty more on this conversation. Lets move on to other news out there in the tech sector, zynga founder is giving up his daytoday responsibilities, stepping down as chief product officer. Hell remain on zyngas board. He has a strong grip over corporate decisions as he owns nearly 10 of the company and 62 of voting rights. Zynga reporting First Quarter revenue of 36 . That did beat forecasts, shares rose 5 in afterhours trade. No change on the frankfurt listing there. Fcc chairman tom wheeler is expected to circulate new rules today that could give highspeed internet providers more power over how fast content moves across the web. This would signal a retreat from the agencys previous position on Net Neutrality in which all web content must be treated equally. Broadband providers wouldnt be able to slow or block access but would be able to give content companies such as netflix special treatment in exchange for payment. Internet providers have long complained about some sites generating heavy traffic, putting a strain on their networks. Ronald mcdonald is getting a makeover. And hes ready for a selfie. Mcdonalds says his famous spokesclown is joining twitter, taking an active role in the fast food chains social media channels. Whats taken him so long . Hell be using the hash tag ronald mcdonald. Surprise, surprise. This is a turnaround when the red haired mascot faded into the background as mcdonalds faced criticism using him to market to children. Hell have a new look, thats yellow cargo pants and red and white striped rugby shirt. No, its ruby shirt. You wont believe what justin has done right now. Justin bieber is apologizing to his chinese fans after he posted a snap of himself at a controversial war shrine on his instagram account. Thank you for your blessings. Fans lambasted the star for historical ignorance. It commemorates individuals who died during service, including some who had been declared war criminals. Plenty coming up. Buffett stays silent. The billionaire investor fails to vote on cokes new pay plan despite saying he thinks its excessive. Details still to come. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Youre watching Worldwide Exchange. These are your headlines. Apple boosts its Share Buyback and boasts a 71 stock split. Carlos slim gains control of te telekom austria, sending shares soaring. Warren buffett says he abstained from voting on cocacolas new controversial plan. 83 of shareholders approved the plan, critics including activist investor David Winters said it would dilute current shareholders too much. In an interview, cnbcs becky quick sa quick, he told her why he voted the way he did. It happens. Berkshire hathaway is cokes largest Share Holders with a 9 stake. Buffett says he has no intentions of selling any shares. As for the role of activist investors forcing changes in company boardrooms, buffett says theyre getting stronger. The ceos of terrified of activists, i can tell you that. Theyre all talking to Investment Bankers, lawyers, saying what do we do about this . Who is in the right or is it tough to pain the all activist investors with one brush . I dont think you can generalize it. There are companies where management has not done a good job. Im not referring to anything specific here. Certainly if people want to step up and buy a lot of stock in the country, its hard to argue with their right to do that. Asked if he agreed with einhorns warning of a second tech bubble, he said its not like the dotcom boom between 2001 where you could almost sell anything and capitalize. Pedro is staying with us today. Lets pick up on this point. Do you think buffett didnt vote in this Compensation Plan at coke because he doesnt want to become an activist investor . Thats a very good question. I wonder. He had the forum to express his discontent. Hes been one of the most vocal people throughout the past decade talking about this extreme exuberance in terms of Compensation Plans for executives. Especially for a company like coke. Current management, how can they disrupt the company from selling something that was invented a century or so ago . I would like to say, if coke is looking for someone at the Senior Management level, im happy with the new Compensation Plan to resign from where i am. I can tell them where i can send my cv to. Its atrocious that the amount of value that theyre taking away from investors into their hands. Right. Another reason why buffett perhaps didnt vote is, careful what you wish for. Hes had a lot of favor with investors in recent times. But you know, if he falls out of favor, does he face his own protest vote at his company . Maybe that was one of the reasons why he took also, you know, i think hes conservative in the way he expresses his views. Everybody knows his opinion. By abstaining, i think he sends a Strong Enough message. Guess what, pretty much everybody else voted for it. Which shows you that in this day and age, companies are held by people who are not really in for the long term, because if you had many people like Wintergreen Advisers that owned cocacola, theyll be in it and voted against it. Because people own shares for five minutes, two seconds, they dont care, they vote for it. Its the easy thing to do. Lets tell people whats coming up on todays agenda state side. Weekly jobless claims are out at 8 30. Forecast a rise of 9,000 to a total of 315,000. At 8 30, march durable goods and on the earnings front, another busy day. Before the open we hear from caterpillar, eli lilly and gm. Look for numbers from amazon, baidu, microsoft, starbucks and visa. Could ge be gearing up for a 13 billion spending spree . We take a look at the latest deal action, next. Alstom shares have climbed to the top of the french stock market this morning, despite the company denying reports that General Electric is seeking to acquire the firm for 13 billion. Lets get out to stephan for more in paris. Stephan, tell us about this, why would ge want to buy alstom. Because the Company Needs external support. Alstom is facing a decline in new orders from utilities across the board and the company also has an issue with its cash flow generation. Thats the reason why the stock lost 20 over the last 12 months. That could be an interesting target for ge since the company, the share price of the company dropped significantly. Also, alstom would give ge access to some interesting sectors like the Nuclear Energy in france but also in the rest of the world. Its a maker of Power Generators which theyre using in Nuclear Power plan the. Thats the reason why the french government may not give its blessing to that potential acquisition. It may be considered as a sensitive or strategy sector, therefore, the french government could block the deal this morning. Alstom says there was no public offer for the shares of the company. However, the statement doesnt say there are no negotiations again on with General Electric. It says that alstom is constantly reviewing the strategic option for its businesses, suggesting that the company would actually welcome or at least not be opposed to such negotiations. Over to you. Thank you very much for that. Heres a look at how futures are fairing ahead of the open on wall street. A couple gains suggested after the selloff we had yesterday. Stay tuned. Well be right back. Welcome back to Worldwide Exchange, im karen cho. These are your headlines from around the world. Investors are taking a shine to apple as the company easily beats earnings forecasts and announces news to return more of its massive mountain of cash to shareholders. Facebook beats the street with its latest Earnings Report as the social media giant generates nearly twothirds of its ad revenue from mobile devices. M a talk sends alstom shares soaring. The french trainmaker says its not aware of any offer after reports that ge is planning to buy the firm for 13 billion. And telekom austria shares jump after carlos slim reaches a deal to take control of the firm. Youre watching Worldwide Exchange, bringing you Business News from around the globe. If youre just tuning in, thanks for watching today. Let me show you how futures are shaping up this morning in the u. S. Markets. We are looking for a bit of a. Out of the gate. The nasdaq, the underper former. We are chasing reaction to apple out to that big after hours move, 8 plus percent on the back of the Share Buyback and the 71 stock split. Facebook on its numbers as well, on european markets this morning, earnings have been driving these indices into positive territory, along with m a wuk tap. The French Market has had that boost from alstom with the reports in the background that ge is interested in buying the french trainmaker. Its the likes of the too i sub, also the spanish stock market out in front on markets. Apple shares are trading higher in germany on back of betterthanexpected revenue in its Second Quarter. The big surprise is that 7 for 1 stock split. Krbs josh lipton has this report. Reporter apple reporting and beating expectations and pleasing investors. Im here in cupertino, california, where i had the chance to speak with ceo tim cook about these results. 43. 7 million iphones, better than the street was forecasting. Tim cook telling me he saw broadbased strength, 5c, 5s and pleased, he told me, with the performance of china mole. The big news here, tim cook also telling me, listen be with we have more money than we need and apple announcing that it will expand its Capital Return Program over 130 billion, increasing its Share Repurchase authorization to 90 billion and boosting its dividend by 8 . Apple also announcing a 7 for 1 stock split. Tim cook telling me, listen, he realizes Retail Investors might want to own apple shares but the price may be too high. With this hes saying we want to make our stock as accessible as our products. Of course, a lot of investors, analysts, traders, they want to know when the next big new product is coming. Tim cook says he wasnt providing clarity about products or services but new products are in the pipeline, and ones that hes excited about. Acquisitions, tim cook saying theyve done 18 in the past 24 months. Cook telling me most of the acquisitions have been small but hes not opposed to doing a larger acquisition if it makes sense. In fact, he told me they are on the prowl for more acquisitions. Josh lipton, cnbc, cupertino, california. We have the general manager at upstream. We also have the managing partner at nostra capital. Give us your thoughts, the buyback, the high dividend and better numbers out of china. In terms of financial results, they did great, beat the expectations in the market. However, the most important aspect of the results yesterday was the number of times that both tim cook mentioned emerging markets, china, india, turkey, vietnam. That shows theyre starting to crack the recipe and moving beyond the western world, where they will establish into emerging markets. Wall street was downbeat leading to the earnings and what the china numbers would look like. There was a concern that 4g was not being rolled out by china mobile. We saw it was the older phones at a discounted price that were selling. Do people need to change their expectations around the china numbers because of what we saw . Exactly. Thats not only in china, that is the case in india. You have the relaunch of the iphone 4s. The question i have is related to what you were saying about emerging markets and them being able to crack emerging markets. I just came from asia last month. One thing i noticed is that androids are kind of like the common smartphone that people have there. They are bigger screens, which seems to be what people want. Theyre cheaper. You know, i think the networks are more likely to push androids because they have to subsidize them less. The iphone, even the iphone 4s, its still quite expensive for the affordability you have in asia. Why do you think theyre going to be able to make the inroads in emerging markets that they havent been able to do so far . Thats a very good question. What youve described is the actual situation on the ground today. Were about to release a piece of research we do in february. Brazil, india, china, nigeria and vietnam. Looking at the propensity to buy apple, it has shot tremendously over the last 12 months. Apple came up across the region, across the five markets as the most likely next device purchased. It was extremely strong in china. Something like 41 . And across the segment of all five markets and also in the youth segment. What you describe today is actually the situation on the ground. Going forward, there is huge demand. But how is samsung, which is one of the leaders in asia, going to allow apple to eat part of their pie . Thats another very good point. You have to remember that samsung spends huge amount of money on their marketing budget. Thats essentially whats driving their market penetration. Where apple does excel is on the stickiness of the Consumer Products and also on the quality, the design and the brand element of the product. Speaking of products, let me bring out this point. Youve been dumping the table along with other investors saying wheres the innovation in there have been rumors about Something Else coming up in the pipeline. This was hinted at again by apple. Theyre not sitting idle when it comes to research and development. How long can this be sustained for . Some say until the end of the year, and if theres no new device, the stock could sell off again. Theyve shown persistently, they managed to increase their sales. This was the main driver for this quarter as well. There is definitely something in the works. It could be the next iphone. Theres definitely something coming. We could see even the apple tv. From our point of view, looking at the mobile industry, what theyre doing in terms of going globally with their product, theyre checking out the right boxes. Thank you so much for joining us today. Pedro is staying with us today. The u. S. Government may be getting set to take heat out of the fastgrowing ecigarette market. Thats coming your way, next. These are your headlines. Apple boosts its Share Buyback and slices its stock in a 7 for 1 split. Investors like facebook results as revenue jumps with the help of mobile ads. And mexican billionaire carlos slim gains control of telekom austria. U. S. Regulators are set to weigh in on two thorny subjects, Net Neutrality and whether to regulate the sale of ecigarettes. To get out to cnbcs hampton piers pier pearson with the details. Heres how what theyre up to. They banned sales to anyone under the age ever 18. Companies would also be prohibited from distributing free samples. They must warn that nicotine is addictive. The longawaited move would subject the 2 billion a year ecigarette industry to government regulation for the first time. A law was passed back in 2009 that gives the fda the authority to regulate cigarettes and smokeless tobacco and stipulated the agency could expand its jurisdiction to, quote, other nicotine products. Ecigarettes use a Battery Powered cartridge to produce a nicotinelaced vapor that is inhaled. Congress and Public Health groups have raised concerns about ecigarettes and questioned their marketing tactics. Meanwhile over at the fcc, chairman tom wheeler is expected to circulate new rules today that could give highspeed internet providers more power over how fast content moves on the web. This was signal a retreat from the previous position on Net Neutrality in which all web content must be treated equally. Reports say broadband providerers such as at t and comcast, the parent of cnbc, wont be able to slow or block access to websites but would be able to give content Companies Like netflix special treatment in exchange for payment. Internet providers have long complained about some sites generating heavier traffic than others, putting a strain on their networks. The new rules would replace the fccs open Internet Order from 2010. That was struck down by a federal Appeals Court back in january. So a couple of big regulatory proposals out there today. Karen . Hampton, thank you very much for the update. Hampton pearson joining us out of washington. Pedro is staying with us. Hes had a longterm short position on this stock. You dont like netflix. One of the stats i want to bring up, netflix video content can account for 30 of all worldwide internet traffic which is a staggering figure. This deal with comcast to smooth the airwaves or broadband system so it can deliver quickly and effectively, how key is that for netflix . And what does it mean for the industry . Its a very good question. The issue you have is that right now every user of the internet is seeing the experienced slowdown and paying for netflix to distribute their streaming content to investors. It does make sense that a company like netflix does pay the cable providers to access rather than consumers who are not clients of netflix to do so. Its true, we have a short position on netflix. Its not been a longterm short position. We traded the stock three times in the past three years, two times on the short side successfully and one time on the long side quite successfully. Our ratio has been pretty good so far. Were short again. I mean, we think its valued at stratospheric levels where the Business Model is unsustainable as it is. They have content liabilities that are too big for the Free Cash Flow they generate. Right now thats not a major issue because theyve raised a bond. They have cash in the bank of around 1 billion. But i mean, i think their International Growth strategy is not going to play out as people think. A lot of people look at the stock for the amount of subscribers, users, just how many eyeballs they have across the screen at any given time. Facebook proved itself again in its reporting season that its still finding favorites with viewers and users. Doesnt it sustain some of the valuation if it has traction with the viewers . What sustains the value of these companies, its computer programs, buying shares which have no idea of metrics, theyre just trend following. Its day traders, speculators, the same kind of people who were buying it when the shares went close to 300 last time and then collapsed to 80. Theyre not longterm investors. You dont want to be putting yourself in front of a train thats coming at you. You obviously have to Pay Attention to what the business is worth. And its clearly the wrong valuation. A great service, as ive said many times. Im a subscriber. I love watching netflix but is that the right price for the business . The answer is no. You like the company, just dont like the stock . Yes. Thank you very much for joining us today. Thank you. The latest entry in the Luxury Travel wars, one highenhotel chain is giving new meaning to the term jet setter. Cnbcs robert frank has more on this new high flying amenity. Reporter it may be the ultimate room at the four seasons. It has a handcrafted bed, gourmet room service, Great Entertainment system and a view from a mile high. Four seasons today launching the first four seasons private jet. Its a convert ed 737. It will give tours of exotic locales, where guests eat the finest food and stay at the best resorts. These tours have become huge business. One of the top growing segments of the Luxury Travel business. Companies like abercrombie and kent and National Geographic and others are selling out these tours. They use charter planes, so four seasons hopes to gain an edge and offer better experiences with its own plane. Meals on four seasons planes will be prepared by private chefs used locally sourced ingredients. There will be a concierge on board to help you book spa treatments, tee times as well. You can charter the four seasons private plane, a tenday trip will cost you around 2 million. You have to stay at a four seasons. Nothing like a bit of spare change on luxury holidays. The euro, intraday, you can seat spike we had in the past hour or so. Then a dropoff from that level the ifo purring the numbers higher but mario draghi, raising the possibility for the asset purchases. Hes spoken about the potential negative rates and whether thats still one of the options that the bank could use. He said the ecb is committed to fighting off prolonged low inflation. Draghi says the bank should reflect on the frequency of Monetary Policy meetings. Well go for break but plenty coming up. Our next guest says he is aggressively buying facebook stock. Find out why, next. Our top story, tech majors apple and facebook seem to have impressed investors, both on wall street after hours but in frankfurt today, apple shares trading higher in germany on back of betterthanexpected revenue in the Second Quarter. The big surprise was the 7 for 1 stock split. Meantime, facebook also higher after First Quarter profits beat forecasts. Revenue rose a whopping 71 . Thanks to a big jump in advertising revenue. Cnbcs Morgan Brennan sent us this report. Facebook posting another surprise quarter. Reporting earnings of 34 cents per share, 10 cents higher than analysts expected. Revenue also beating at 2. 5 billion. The street had been calling for 2. 36 billion. Ad revenue making up the lions share, 2. 27 billion. Thats an 82 increase from last year. Mobile ads were about 59 of that, reflecting the ongoing growth in mobile. The number of folks regularly using facebook ticked up to 802 million daily user in march. Thats a 21 jump yearoveryear, an important metric for advertisers. Sanburg saying the network is in, quote, very early testing. Ceo Mark Zuckerberg discussing the pending multibillion dollar acquisiti acquisitions, whatssup and oculus. Zuckerberg thanking ebersman on the call. Lets dive into conversation on facebook. On the phone is victor anthony, managing director of topeka capital markets. Do you think facebook has longevity longevity . I think it does. The key takeaway from the stock is that its set up nicely over the next two years. You have the core business. Its fundamentally strong and performing well. Facebook added more users than each of the past three quarters, while other social networks have been having issues and its constant fear is that users are fleeing the platform. You have user engagement, at the alltime high on the platform. Those are things that are strong for facebook. The ad Revenue Growth is accelerated for the third consecutive quarter. You put all that together, you have a solid, solid business thats performing extraordinarily well. Let me bring up some of the negatives. Instagram may make a pretty picture but weve been told it will take longer to extract money from this investment. Do you think this will raise questions about the acquisition logic from facebook after high priced acquisitions . Yes. Investor expectations for these ad opportunities. They talk about premium video. They are tempered on the call. You know, early tests on these ad units are positive. But they are taking time to build out the modernization path. Some investors may be slightly disappointed because the contribution will be pushed out. What it signals to us is that the core business is so strong, theyre able to take their time and make sure theyre doing modernization on the platforms, doing them pretty well. What you have in 14 is the core business, laying on these additional ad opportunities in 2015 and 2016. You have a good center for the stock over the next few years. On the management change, the cfo is leaving in june. Theres been long rumors about coo Sheryl Sandberg as well. Theres been concern about her from the very beginning, she may leave to seek Political Office at some point. So thats always a risk. Well continue to monitor that. Given her latest options she received, it looks like it will take several years for it to vest. The read from that is that she may be around for several more years. Thank you so much for joining us today. Victor anthony, thing manying director at topeka capital markets. We are looking for further gain, too. It 0s up for trade today. Were looking for reaction. U. S. Futures will be reflect something of the earnings confidence as well. You can see an indication for the dow, the s p and the nasdaq. That is all for todays show. Im karen cho. Thanks for watching Worldwide Exchange. Squawk box. Splitting the apple. The Company Announcing a big stock split, a buy back and betterthanexpected results. General electric is not commenting on reports that it wants to acquire alstom for billions. Shares of the French Company are soaring today. Its bring your kids to workday on thursday, april 24th, 2014. Squawk box begins right now. The kids are all right sometimes i feel like i have to get away good morning, everybody. Welcome to squawk box here on cnbc on the best day of the year. Im becky quick along with joe kernen. Andrew is off this week. It is bring your kids to workday. We have all of them right here in the house with us. Well start this morning. Hi, guys, the little squawkers are here. We did a few reads with the teleprompter. Watching that i did discombobulated. Its harder if youre holding a mike. Doing it live is hard. They did well. Well see some of them. 7 and 8. Plus we have a lot to talk about. This is the best day of the year. Everybody is happy when the kids come in. Well start this morning with apple, the Company Making a big splash after the bell. Here are some of the highlights from that report. First of all, this is what really caught peoples attention, apple announcing a 7 for 1 stock split. Its also