Transcripts For CNBC Worldwide Exchange 20140627

And cough up 3. 9 the billion in sanctions. And the Prime Minister says the uk public needs a wakeup call as David Cameron gets ready to face southern european leaders jeanclaude becoming the head of the european commission. The European Union is a very good thing for the united kingdom. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. As you can hear in the headlines, we are watching for news out of brussels. Breaking news, you can see the signatures being done on official documents. This is a Free Trade Agreement thats being passed around, the likes of muldova, signing these the documents. Leaders of the respective countries all there making history in this Free Trade Agreement. Will it make a difference . Many people hope so to the fortunes of these countries he. You can see the final page as the european leaders put their names on board, as well, hollande the latest to sign the documents. The headlines being used are still around who will be president of the european commission. Were waiting for that news to be forthcoming. Its going to be discussed at lunch today. Its enough to give you indigestion, perhaps, if you sit on the uk side of things. Plenty more to be discussed as those leaders continue to put pen to paper. Coming up on todays show, gopro caught the market yesterday. But today investors are gearing up for michaels arts and crafts. We find oi out just how artistics investors are feeling. Just do it, nikes First Quarter results beat forecasts. The retailer rides higher in world cup fever. We crunch the numbers later in the show. Angry investors gather amid falling shares for tesco. And rating doubts on the abe optimism. All that and more, coming up. Investors had a start in falling out of barclays dark pool. After thwarting investors with an internal investigation. Names such as deutsche, chris swit and rbs withdrawing ahead of the probe. While revealing their exposure to High Frequency traders. Eric schneiderman spoke to cnbc yesterday and outlined the charges. This was fraught, yeah, and this was not the only example. The other major area of deception was how they screened and rated all traders to protect themselves, protect their investors from what they call toxic, predatory traders, in fact, the whole system was a sham. Barclays ceo Anthony Jenkins said he was deeply disappointed. He said barclays is working urgently to understand the situation. And undertaking a full internal investigation. He said they would not tolerate any circumstances in which their clients are lied to or misled and instances discovered will be dealt with severely. He says the success of barclays rely owes clients being able to rely on the firms integrity. Barclays shares have been trading higher on the stock market today. In fact, right towards the top of the ftse in session, about 2 plus percent in the first hour of trade. Now currently up 1. 26 . Geoff cutmore joins me live on the set. Look, i think clearly the bank has a problem here. And since the libor scandal, you know, barclays name has never been very far away from the headlines. Anthony jenkins came in in 2012. He was meant to bring a cultural clean broom to the business. Unfortunately what mr. Schneiderman is saying here, some of these misleading statements were made as recently as april. So this is, very clearly, mr. Jenkins problem, not just a problem at the bank. So the question i think a lot of investors will be asking themselves, in this environment, does mr. Jenkins advice this . If so, what shape does barclays look in post fact . Because the libor fines were substantial. This was meant to be a cultural change. If mr. Schneiderman is correct, clearly there is still more work to do on the Business Model over at barclays. It feels like covering the proverbial with this internal memo thats coming out about looking at those who have been responsible. But what about the longer term picture for investors . Is this when the Culture Exchange is going to take many, many years to excuse . Well, i think because of t the you know, how recent the reports allege, still there were misleading statements made to those working inside the staff pool, i think this falls on mr. Jenkins doorstep. He needs to deal with this and then he needs to explain why when he came in and said theres a Cultural Exchange for this organization and spoke publicly to me and to others about how that was going to take place, why this focus has not ultimately meant that, you know, the dark pool was cleaned up. Lets just say that we are still in the relment of allegations here. This is a case thats been put together in the United States and well see how it ultimately falls. But right now in the share price reaction, people seem quite happy to buy into the idea that this probably did take place and there will be some sanctions against barclays later down the road. So we chatted about this a bit on squawk box, if you want to go and put money into barclays today, i think you are either incredibly brave or terribly fool hardy. We need to see some real clarity here before you can get a fair value assessment of what this business is worth. Some of the brokers having that fool hardy nature, suggesting the share price we overheard yesterday with the new York Attorney general was going after, so they thought the stock had potentially a buy offering on it for some investors at these levels. But to me, the biggest question is if its just barclays is an isolated case or if there are other banks. In some ways, you would think the perception would be better if there are other banks because it isnt just a problem with the bank internally it is across the industry. Some people say Goldman Sachs may be facing the same issue. Absolutely. We did see gold man says say it felt there was some mispricing taking place in its own dark pool and it was going to compensate customers where they had been wrong because they didnt get the right price. The interesting question is when you look at the front page of the ft this morning, and you reference some of those banks taking their activity out of this, why are they all engaged in transacting business within the dark pool . Is that in the best interest of proper price discovery in the market today . Why isnt this going through the public exchanges . We need another hour for that discussion, geoff. Weve kept you past your day job. Dont worry, ill be back in an hour. Bnp paribas is reportedly prepared to pay a record 8. 9 the billion fine. Authorities hope to announce the plea deal monday. It will include a statement of facts outlining how bnp hid names of clients when processing transaction. They have promised not to pull bnps license. This is the latest on bnp trade in the session today. The stock bouncing back 1. 1 higher in session. I know the odds are stacked against me, but Jeanclaude Juncker as Commission President is wrong, those are the words of David Cameron. Lets go out to julia for more. We just saw evidence of that agreement being inked. Absolutely. And i dont want the situation to detract from that, but as you were rightly saying, he is very isolated on this decision. That doesnt mean there arent some sympathies. Both the dutch and swedish Prime Minister say they disagree with the way this decision has been made, stripping powers away from the National Government towards brussels. I did catch up with the finish Prime Minister and asked him how europe can make this up to david cam ro to soften the blow and the embarrassment back home particularly given this is likely to give further fuel back to euro skeptics back in the uk. First of all, we need to build some bridges. I think its very important that the program that juncker puts forward is market driven. I support that very strongly. We need to focus on the internal markets, we need to focus on free trade, we need to focus on the Free Movement of goods, services and money. Do you acknowledge the defeat for David Cameron on this issue could tip the balance as far as the perception of eu membership Going Forward . I dont think the eu is zero sum game where you lose or game. David cameron is a principled man and he felt juncker is too federalist for his liking. But i think we can all solve the situation and i think in the uk some people really seriously need to wake up and smell the coffee. The European Union is a very good thing for the united kingdom. Over 50 of the trade of the uk goes to the eu. If that were to be cut off, i think the continent would be cut off seriously. The bottom line here is i dont think anybody believes junckers policy is going to tip the policy as far as eu is concerned. But all the drama might. It will be interesting to watch how David Cameron handles this later today and in Uk Parliament on monday. But that is just one of the issues. And were showing you pictures now i believe of the signing of the Association Agreement between eu and muldova, ukraine and georgia. Particularly with ukraine because that is what started the revolution in november. Im going to talk to the Prime Minister of georgia. Ill be back shortly with that interview. Joining us now in the studio is pavalosh Research Analyst at open europe. Good morning, welcome. Good day for David Cameron today. He was drawn a bit of a lifeline yesterday by germany suggesting the reforms that britain seeks will be carried out even if juncker is present. But do you feel like cameron has lost the Public Relations xap from the outset . Cameron made a state stand on a point of principal which is that not only is Jeanclaude Juncker the wrong person for the job, but candidates and one of those candidates has to look at the Commission President no matter what the National Government wants. He feels so strongly about this principal that even though he would lose, back home i can there will be support for his principled opposition. When we saw the initial response post election, there was a feeling that it was time for a new face in brussels. It seems to be only cameron now that stood by what the elect whiat wanted. I think hes gotten the wrong side of the European Parliament and the pan european party. And they say exclusively managed to engineer the situation. No doubt theyve painted the appoint of Jeanclaude Juncker as the democratic outcome of the elections even though such as intrgz is very plowed, given both the very low turnout in the european elections and the low knowledge about these socalled leading candidates. You made the call youre not alone in this saying if juncker does win the presidency, it does increase the chains of a uk exit from the eu. Why is that the case . It doesnt seem as though there is widespread support for an exit. Many get out there and theres an increasing amount of population and its still not the majority view. Sure. I think the people would want to are the ones cheering juncker the loudest. I do think there are a couple of different scenarios in which the increase is one. Obviously, make eu form more difficult, that makes it more likely. But equally, as you yourself said, other eu leaders do recognize this is a list. There will be support in National Capitals for a uk friendly reform agenda which folks want cutting red tape, finding free trade deals, giving National Parliament a say or David Camerons reform agenda. The campaign has been somewhat dirty. If you look at the telegraph today, reporting that junckers habits have been discussed at a high level, just one of the issues that have been raised, almost a attempt to try and d discredit younger from this position. These rumors are not particularly new. But ully, i think we do sometimes give too much weight to the role of the uk Commission President. Its a very important post, but ultimately, its still the National Government that fundamentally drives the agenda of the eu. Although the commission is the one that favors the proposals, its ultimately National Governments who are drawing up the policy priorities for the commission and thats why i think its going to be very, very important for the uk to secure this. Appreciate the perspective today. And we do have news breaking just in the past few minutes. We were showing you those live pictures of the Free Trade Agreement being signed between the uk, moldova, georgia and ukraine. The Russian Deputy foreign minister has warned of grave consequences following the ukraine signing the eupact. This is one of the reasons that caused so much political tensions and that move has been documented today with an official signature. Not showing too much of a concern. It has been the index. Its still looking a little cautious, but still in positive territory. Here is the latest tone across european markets this morning. You can see after the first hour and 15 minutes of trade, we are still in positive territory. A fair amount of green across these boards. 0. 2 higher on the stoxx europe 6 hup. It was a shaky start. The dax, for instance, one of them. But now you can see across the charts, we are mostly positive. Gaining on the ftse 0. 1 . Giving back into territory, still positive about 0. 2 on the stock market. Firmer now for the french market, about 0. 3 . The ftse mib is Still Holding on to about 0. 4 . Across to asian markets, lets take a look at the picture. You can see red across the board. There have been a lot of concerns about the growth stateside. Data points, Consumer Spending, the latest for instance which grew less than forecast yesterday. Also the market stateside had extended some of the declines after one of the fed officials spoke about Interest Rates going up possibly by the First Quarter next year. So you saw some of these asian markets responding to those forces. The biggest drop on the japanese stock markets. Weve seen the jab need yen pick up on some of the safe hach trade. More modestly, you can see across the board for south korea, china and australia. On bond markets has seen a bit of a drift lower in u. S. Treasury yields as they got 2. 5 , the level were at today. Tenyear bunds lower this week, 11. 25 . Across italy, still below that 3 market. Gilt 2. 6 today. Foreign exchange markets, the dollar index has been close to onemonth lows since wednesday. You can see this morning also on the back of some of these trades, the euro gaining traction. Similar gains in australia. Above the. 94 handle. You can see 11. 70 for the pound. Still to come on the show, we are back in brussels where we speak to the Prime Minister of georgia as he signs an soeshgsz agreement with the eu. Stay tuned for more on that. Great rates for great rides. Geico motorcycle, see how muou could save. We have more news crossing from russia. The Deputy Foreign minister has warned of brave consequences as ukraine signed the eu trade pact. Just now, a putin Spokesman Says russia will take measures in case former soviet republics signing of the eu pact has a negative effect on the economy. Monthly doe va, georgia, ukraine all signing that eu agreement. L signing that eu agreement. Putins comments very much will be watched by the market. In case there was a full out effect on the economy. Lets get more from julia in brussels. What exactly is russia talking about when its suggesting there might be measures . Theyre a key export partner for ukraine. More than 25 of ukraines exports go to russia. So it looks as if they may turn around and remove those previous republicanal treatments. Given its a quarter of ukraines exports, it could be very painful in the country in the shortterm. Im joined by the Prime Minister of georgia moments after signing his Free Trade Agreement. Lets get his thoughts on this in particular. Fist, Prime Minister, thank you for joining us. Can i ask you what this means for georgia both financially and symbolically at this time . Thank you very much. It is very important for georgia and for all georgia citizens. Because this is a dream that came true. Generations were trying to, you know, get close to europe and we always feel ourselves as part of the culture. I think this is just the beginning. Its not a final goal. This is like a master plan of countries modernization and i think this is very important. This you expecting russian retaliation . Well, he have tried to have a constructive rapport with russia and made a lot of effort to lower tension with them. Russia showed a constructive policy decision. Russia promised that they would not interfere with georgias agreement. So far, we dont see any complications of this. How concerned are you when you hear the Deputy Foreign minister threatening ukraine of grave consequences . Were really concerned about the development in ukraine. I have to say im really confident that the newly elected president poroshenko will find a way, will find a solution, will find a dialogue with russia. Are we putting enough pressure on russia now as the western government . You have your own experience with a crimea situation, too. We have a different situation today in georgia. We show that we would like normalized relations with russia, although we stay very principled in the main. We still have the main problem, which is the future and region. But so far, we dont see any signs in terms of difficulties and complications. We are conduct a very constructive policy to all neighboring countries, including russia. But dpen, i have to make it very clear again that georgias european integration process became irreversible, but it doesnt conflict to have normal relationship with our neighboring countries, including russia. You may be very positive, but right now russia dont seem to be. Weve seen the situation in ukraine, weve seen the situation in the east of ukraine in particular. Right now as far as the west is concerned, they dont think russia is doing enough. What more pressure do you think the west should be putting on russia to stop this . You might be frightened in the region of russian aggression, surely. Dialogue is the only solution out of this. Dm dialogue isnt working right now. Otherwise, there is no other to dialogue. So do you put pressure or do you at least say to president poroshenko here that the ceasefire should continue, despite the fact that the separatists arent abiding by it . Well, we didnt have a chance to talk about this. But i know they are also seeking some solutions. Again, i want to repeat that dialogue is the only solution for this crisis. Do you think there is russian interests on the separatists right now . Well, i think, you know, i have to by focused on my country because we have our georgian way. Today we signed our agreement with the European Union. We made it very clear that we have this very ambitious plan to become member of the European Union. You also have a relationship with russia for protection. A lot of countries in europe do, too, the likes of italians perhaps with their Energy Concerns in russia. The problem is those interesting are preventing taking stronger action to prevent russian aggression, arent they . Well, you know, again, to repeat that in every conflict, in every conflict, there is no alternative than a piece of dialogue. And i think this is is the way that europe has chosen and it is the way that the Ukrainian Government has chosen and i think well find a solution. Prime minister, thank you very much. Thank you. The Prime Minister of georgia speaking there and congratulations today on todays Association Agreement. Karen, back tu. Julia, thank you very much for that. We are waiting to bring you live data here from the uk, about 20 seconds to go. But it is going to be the latest revision to First Quarter gdp. So far, the print has been 0. 8 . Were expecting it to rise to about 0. 9 which would imply an increase of 3. 1 over the past year. Decent growth in anyones book but, of course, this is key because many people are thinking were approaching the tightening. But here is the latest. First quarter gdp unrevised at 0. 8 quarter on quarter. The year on year figure revised down to 3. 0 from 3. 1 . So just slightly softer and there were strong expectations out there. But still, very close to what weve had. You can see the sterling level has come off ever so slightly there from fairley high levels around this 170 mark. Just more devil in the detail, in case youre a uk finals, revised up. A lot of pone going into the Investor Community for businesses up 0. 5 . Quarter on quarter from 2. 7 . Ten points year on year. These are decent numbers on the investment side. Real household disposable income, though, sliding 0. 2 in the quarter. This is what we had last year in the final quarter, 0. 7 . So interesting numbers that are coming through. Services up 0. 8 quarter on quarter. More on this after the break, but you can see the initial reaction there as sterling has recovered despite that initial bid. After some disappointing data, we discuss what our next guest calls the ninja arrow, coming right you up. Noo. An eu agreement has been signed by moldova, ukraine and georgia. The georgian Prime Minister says he expects no issues. We would expect normalized relations with russia. Barclays ceo Anthony Jenkins as investors reportedly abandon the bank amid the dark pool fallout. The New York Stock Exchanges win tess battle for alibaba in what is expected to be the biggest ipo ever in the states. And counting down to bnps latest fine, the french lender will plead guilty on monday to sanctions violations and cough up nearly 9 billion. Lets just recap the latest uk data that crossed. We saw an unrevised First Quarter reading for gdp. 0. 8 on quarter. Thats been revised down to 3. 0 . But the nice caveat in these numbers was the Business Investment levels that have gone up to 5 quarter on quarter. 10. 6 on the year. It is the biggest investment gains since the First Quarter of 2012. Initially, we saw a bit of softness in the sterling trade. But so far, again, its picked up to levels higher than what it was trading prior to this data. Lets bring in steven sabold. Steven, perhaps you can give us a read on the Business Investment number enough to assess the gdp year on year number which was slightly softer. Firstly, hell lo, karen, nic to see you. Clearly the 3 on its own is a decent number particularly when you compare it to whats going on in the rest of the world. I think the upward position to Business Investment is extremely positive. This is a sector of the uk economy, a sector of all economies globally where we are needing to see a faster pace of growth here. So i think this is very, very good news. The key point i would make here is bnp paribas, as we go into q2, well see a faster growth in the uk. To put a number on the table, 0. 8 in q1. We think thats going to accelerate to 1 in q2. And ultimately for 2014, we think the uk is going to be the Fastest Growing economy in the g10. So pretty positive news all around. What does it mean for Central Bank Policy . We saw yesterday an inkling on the Financial Stability report that the bank of england is somewhat concerned about the housing market, but theyre continue to go separate after these new macro measures are taken to very different Interest Rate policies. So the markets seem to be a little higher at the short end of the curve this morning, by the yields are picked up, as well. And the Market Pricing in Interest Rate hikes fob sure. We think this is the right move. We agree with those market moves. Our view is that the bank of england will raise rates in q4. Clearly, we were quite pleased to hear mr. Carneys comments at the Mansion House speech a week and a half ago. So the key point i would make is yes, i think q4 is the right timing for the first hike in the uk. Steven, we appreciate your time. I know you might be fairley busy on the back of the trading pattern. Sterling has increased its holding at this level. It doesnt feel as though sterling is breaking out of this range. Its much priced into the trade. Well, i think thats correct. Clearly, if you look at cable or sterling dollar, i dont think theres going to be a Huge Movement here, mainly because the dollar is likely to be strong as we go into the second and third quarters. I think the best way to trade this is against the euro. So i would suggest significant more downside on euro sterling. We have this trade recommendation on and were targeting 0. 78 on the downside. But i think thats just the start. I think by tend of the year we could be even lower, down 0. 76 or so particularly if were correct in that the bank of england hikes rates in q4. Remember, the ecb is going in the opposite direction. We think theres more to come as far as easing policy from the ecb. Thank you very much for that, steven sabol. European markets have been trading firmer today. The ftse is Still Holding up on the back of the latest data that weve just had off, trading up about 0. 2 . The xetra dax similar levels. Bigger gains for the french stock markets today. Across from the periphery, the larger gains have been in this market and easily in spain, as well. Almost half of a percent is the level where the ftse mib is making its way towards. On Foreign Exchange markets, we saw that level on sterling dollar. Dollar has been on the back foot, as well. You can see against the yen in particular, 101. 43 the level today. 1. 3620 a bit higher for euro trade. The sterling dollar 1. 70 and australia Dollar Dollar 0. 94 heading into the weekend. The japanese prvm abe unveiled thirst stage in economic package. Take a listen. Theres been a very strong case for japan trade to be quiet the first half of the year. There was very little policy going on. You look over the next six months and japan seems to have survived the tax increase relatively unscathed. And policy is heating up again. So abe is starting to talk about structural reform again. It has been a larger wait for us. Theyve performed very well last year we started scaling out of those positions somewhat. The market hs corrected this year. Were also beginning to see quite a lot of value in the commodityrelated stocks. Clearly the market is concerned about china and the slowdown coming from china. Thats presenting opportunities for us, as well. And there is a lot of good plateau of future growth for japan that is emerging. Utilization for the deregulation of workforces migrants. And there are lots of hints to the future growth perspective. The nikkei 225 this morning, Household Spending in retail sales coming in below expectations. There are sign tess economy is recovering, the jobless rate falling more to a decade low. The sentiment weve seen on the japanese stock market today, speak to go a bunch of Fund Managers and Asset Managers for the longterm, they are more positive on japan. They could be forced into more aggressive measures. That could in the shortterm give us the same reaction we had in the first round of the policy of abe nomics. But actually, it really is starting to heighten the possibility that were moving towards an actual crisis in japan. Im always reminded of what that film with Jack Nicholson where hes standing on the dock and says you want inflation . You cant handle inflation. Thats what this reminds me of. Theyre using cyclical tours to respond to a structural problem. Some people would say fair point. But this isnt helping at the margins, the fact that you now have better confidence around the japanese economy. A lot of the confidence is outside of the japanese economy rather than in the japanese economy. What we saw was an initial reaction to abenomics mainly led by foreigns and it makes you think whats changed fundamentally about japan other than foreigners perception of it. Everyone thought it was going to have the same effect on japan which actually the structural problems in japan are very different and there havent been any movement there. If you separate out the property, because those who are positive say corporate Balance Sheets in japan have been resourced. They look healthier than what they used to. You have the outsourcing taking place across many of the other nations. Even if you remove any further gains if theres further weakening of the japanese currency, is that a fair point . I think, yeah, that for me is part of the structural problem that we see in japan. Too much of the income flows into the corporate sector and just cant get out. So you have money sloshing around in the corporate sector and not really doing anything. What needs to happen is that that money needs to be redirected to the household sector. But they have this kind of dysfunctional labor market that doesnt allow wages to rise and if they do rise, it just dissolves again as the economy turns back down and you have Capital Markets that dont really work as well because you have the cross Share Holdings and money is just sloshing around. Theres a lot of these structural issues that havent really been addressed yet. We have seep further territory thats been made. There is a move to try and encourage money thats gone largely into jgbs. You basically have no money to spend, but the government has been encouraging money through gpis to go into equities, high performing equities. Now, i spoke to the first foreign manager to pick up a mandate from the pej pension funds. Theyre putting money into other high yielding plays in the equity market. Wont this remove some of the burden that is overhanging for the japanese economy and the japanese government on liabilities. I think actually the deepest move could be a trigger for a more as things play out for a more marked reaction and perhaps the gain taking a stand towards crisis. If you think about whats actually happened, if you look at the ministry of finance and the bank of japan altogether, what weve had is the ministry of finance has not able to drive growth by having this huge great deficit of gdp. The bank of japan has gone out and flooded japan with more liquidity. And still not willing to go out and buy japanese equities, which isnt a great resounding yes, lets go buy equities. What happened was they moved in and changed the board and said you guys are going to go in and buy equities and now we have a much more understanding board and the flip side of that is that they to reduce their allegations to jgbs. Now, the only guy thats able to step in and pick up the slack there is the bank of japan. Were almost seeing abe jumping in and forcing koroda into a path that he doesnt perhaps want to take. Thank you for joining us. And in corporate news, the latest the mystery has been solved. Alibaba decides to list its shares on the New York Stock Exchange, dealing a blow to rival nasdaq. The ecommerce giant will trade up the ticker baba when it makes its move this summer. In a statement, the nyse says itsalibaba. The nasdaq executive brudoff says they competed to the very end. Weve been, woulding hard to win the deal. I think when you look at the there were reports we were behind. I think we brought it to even. That was where we wanted to be and we made a very good run for the business. We wish them the best. 61 of all u. S. Ipos and nearly 2 billion in proceeds. Still to come on the show, dark cars gather at tesco as it faces angry investors today. Analysis after the break. In india we have 400 Million People who dont have electricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. Quarterly sales for 40 years this month, a pricey pulloff and two consecutive years of falling sales have hit concessions on chief executive Phillip Clark. Not all of the groups shareholders have criticized the leadership. We spoke exclusively with david, chief Investment Officer of harris associates, one of tescos biggest shareholders. David, thanks for being with us. You are currently the cio of Harris Investments based in chicago. And you are a big shareholder of tesco, the seventh largest shareholder in tesco an almost 2 stake. The abm of tesco taking place friday of this week. What are some of the issues youre looking at with regards to tesco now . By the way, we actually own just under 3. 5 . The reason why we have this stake in tesco is we recognize that it is a turn around story. We think that the strategy that theyre employing, the space, recycling the space and better using the savings and online multi channel. There should be a number of strengths and accomplishing the turn around. Clearly, they have issues. The previous ceo of tesco is advising Phillip Clark in how hes handling this turn around. Is the criticism fair . I dont really believe it is fair. You have to recognize that these problems that were experiencing today are largely the results of two major strategic mistakes made during the era. One was grabbing too much space in the uk too quickly. And doing the same overseas, incidentally. Secondly is allow the quality to drop. When you add up the space of too much space, home and abroad, and letting tesco lose its tesco image, these are not and were not new problems. These are problems that took years to problem and theyre going to take some time to solve. And so people have to be patient in allowing the cures that the Current Management Team is implementing to take hold. What do you think phillip character should be doing in order to get it under way at the pace at which it needs to happen . Tesco on an ongoing basis has to improve its image with the Customer Base as fast as possible. And that doesnt mean just slashing prices and competing. It means providing a unique selling proposition to the tesco base. They are addressing that as quick as possible. That was probably the best thing they could do now. And you can catch more of that exclusive interview on cnbc. Com where shareholders are meeting today for tescos annual general meeting where they are expected to pile more criticism on clark. Joining us now is bruno montain. What are your thoughts . Is it a management issue here or is it a greater problem tesco is dealing with . Well, i think its largely dealing with the change in the environment. But the uk has changed. Today if you want to have really low prices, go to al did i or if you want quality you go to so i think david was talking about the turn around plan. To me, this seems very similar to the airline wards. They launched many discount partnerships. I know recently sainsbury has gone off to partnerships with netto. Should they be launching their low cost aversions . Yes, they should. You cant have one store that deals with everybody. Tesco has the most locations. They could say, well, there are 300 stores. Eventually, low prices in retail you need low costs. Then they would be able to compete. These are just starting levels were talking about. These are businesses that have spent many, many years on the supply chain. Tesco provides 40,000, 50,000 products in the cheapest way. But its doing the wrong thing. If you only have to put 2,000 items on the shelf, you can do it. Thats very different. Its not that theyre efficient at what they do. What about the timing . Its poised to step up pressure again. Has most of the ground already been claimed by the discounters now . No. I think theres plenty more to come. In our expectations, this comes about of the market today, about 14 in 2020. Theres another 10 billion pounds. Its a fantastic market. Theyre making more aggressive claims. 275. Thank you so much for joining us. Time to get out of the water. Investors start pulling out of barclays stock pool as the u. S. Allegeses the bank of fraud. More after the break. Welcome to worldwide exchange. Im karen cho. These are your headlines from around the world. Association agreements have been signed by georgia, moldova and ukraine. Ewe cranes agreement may bring grave consequences with russia while the georgian Prime Minister tells this channel he doesnt expect any issues. We would like normalized relations with russia, although we stay very principled. Barclays ceo says he will not tolerate circumstances where crimes are misled, this as investors reportedly abandon the bank amid the dark pool fallout. And nike gets a world cup boost. The sports wearmaker beats expectations on earnings as excitement over the soccer tournament continues. The New York Stock Exchange win tess battle for alibaba in what is expected to be the biggest ipo ever in the states. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Investors have started pulling out of barclays. The british bank responds to u. S. Allegations of defrauding investors. New yorks top Securities Regulator has accused of bank of dark pools. Attorney general Eric Schneiderman spoke to cnbc yesterday and outlined the charges. This was fraud, yes. And this was not the only example. The other major area of deception was that they had this very elaborate presentation to investors about how safe their dark pool was, how they screened to protect their investors from what they call toxic predatory aggressive traders, meaning High Frequency traders and, in fact, the whole system was a sham. Jenkins, the ceo of barclays said he was deeply about the issue. We are working urgently to understand the situation. I will fought tolerate any circumstances in which our clients are lied to or misled and any instances i discover will be dealt with severely saying the success of barclays relies on clients being able to rely on the firms integrity. Barclays shares have been trading today up 117 . Geoff cutmore is back with us to discuss this on the set. Jenkins was looking at the integrity of the bank. But this now has happened under his reign. What does it mean about the Market Perception of Anthony Jenkins . Well, i think theres an issue here. Mr. Jenkins came in from the retail side of the business. He replaced bob diamond. Bob diamond departed and left as the villain as the bank went lieu the libor story, then this fx investigation that has sort of settled over the Banking Sector here in europe. Anthony jenkins came in as the man who was the new broom and what weve seen ultimately is a lot of layoffs of barclays and a restructuring of the bank to make it less reliant ultimately on the investment side of the ledger here. But the allegations for mr. Schneiderman say this misleading marketing is taking place as recently as april. If that is the case, that is clearly under mr. Jenkins watch. So there are some questions to be answered here. Barclays, i think, very early on this when the news started to come out, first, barclays suggested there was no case to answer, its a banned work relatively quiet in responding. Now it would appear that barclays has withdrawn somewhat from the pr offensive. Would i have had this memo from mr. Jenkins. But i think the market is drawing its own conclusions. Some banks drawing from the dark pool and investors have been selling down the stock here. They have decided to take action before they clearly know what the outcome of this investigation is. Weve seen a rocky performance the past couple of days. The share price recovering on the back of that. Thank you very much for that. Bnp paribas is reportedly ready to plead guilty to charges and pay an 8. 9 billion fine. The New York Times says authorities hope to announce the plea deal monday. The times says new yorks financial regulators have bnps license. For at least six months. And the latest trade suggests that the stock is recovering today, as well, up 11. 3 from the gains weve seen with bnp paribas across the european Banking Sector the today. James bond has issued a positive outlook for u. S. Growth despite First Quarter gdp readings. He says he expects the economy to expand and unemployment down to 5. 8 by the end of the year. He says growth is becoming robust enough to tolerate a rise in shortterm rates. Meanwhile, kevin walsh, a former member of the feds board of governors said the feds policies are benefiting the rich at the expense of the poor. If you have access to credit, if you have a big balance sheet, the fed has made you richer. So i would say this has been in some sense reverse robin hood. This is a way to make the wealth do more because thats what the Federal Reserve can do. The comments are interesting. This is a man who has been seen as very influential and market moving on the fed board. Hes calling for the drive by the end of the First Quarter next year. Is this something the markets have been missing . I think the markets have been very complacent. If you look at the inflation thats been coming out, cpi, ppi, yesterday the personal consumption deflator, all of them are at twoyear highs. Youve named some of the other board members. We were told the rates are going to stay lower for longer. Stocks say the record across the euro indices. Isnt some of the blame in the communications strategy, the likes of janet yellen, for instance . In i think certainly plaming the recent spike up in the cpi is reinforcing the markets complacency. She thinks it should be more open. If you look at the data coming through and the market, the latest read on gdp, this to me seemed very backward looking. They knew those emerging markets. Why do you think theres been some surprise around that number and why is it being taken so much on board on Investment Strategy . I think markets have been prepared to look through it. It comes down to weak exports. Inventory has been build up because people werent able to get factory. Specifically when it come to location and Monetary Policy, the fed needs to look at not only what the data is right now, but what the data is going to be in two years time. Its usually an 18month to twoyear lag in terms of changing Monetary Policy and the housing economy. Just quickly, if the matter is right, where do u. S. Markets go from here . Because you think the only part of the cycle positive supposedly for u. S. Equities, it doesnt mean they could continue to see u. S. Records. I think it depends on Interest Rates and how Interest Rate expectations change. Thank you for joining us. Nike rises higher on world cup fever. We crunch the numbers after the break. Thank you for your sacrifice and thank you for your bravery. Thank you colonel. Thank you daddy. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance can be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Thanks for joining the show. Let me show you how u. S. Markets are faring ahead of the u. S. Open. Futures suggesting a negative start picking up on the weaker finish we had yesterday approximately challenging day after we got the Consumer Spending numbers going less than forecast. All this compounded by James Bullard from the fed suggesting Interest Rates could rise by the end of the First Quarter of next year. So we had a slight finish and this morning weve got a slightly negative tone on markets. But here in europe, we are at least trying to hand over a positive lead to you. Weve got some gains across the charts. You can see investors have been building throughout the morning session. The strongest gains have been on the periphery. Italy trading high by more than 0. 5 . A decent session for french stokts up 0. 4 . The xetra dax and the ftse in close step at 0. 2 up. Parklys and bnp paribas are both in a recovery. Meantime, eu Association Agreements have been signed by ukraine, georgia and monthly dove ya. Julia, no one thought russia would be throwing a party for the former soviet nations, but what do you make so far of the response from the russians . I have to admit, we have expecting some kind of response. We have how negative the impact would be. The question is whether or not they pull back the preferential treatment ukraine gets right now. He spoke to the georgia Prime Minister and he described its as a dream come true. We discussed the pressures of russia and i said how do we put further pressure on russia regarding the ukraine smp. Dialogue is the only solution out of this. Otherwise, there is no other its dialogue. So do you put pressure on this despite the fact that the separatists arent abiding by it . Well, we didnt have a chance to talk about this, but i know that theyre seeking some solutions and i think i wanted to repeat that the dialogue is the only, you know, solution for this crisis. The two things to focus on here now, the discussion about potential future sanctions on russia. Were not expecting anything. And the other thing between russia and ukraine Going Forward is just whether or not the poroshenko decides to extend the ceasefire that finishes at 10 00 u. S. Time tonight. Were going to hear from him in around 30 minutes time in a press conference. Hell be looking for details about what he has to say on the situation. For now, back to you. Julia, thank you very much. These are your headlines today. Russia threatens action as the ukraine signs an eu agreement. Banks withdraw from barclays following u. S. Allegations. And soccer world cup fever helps nike Beat Estimates in the Second Quarter. The mystery has been solved. Alibaba decides to list its shares on the New York Stock Exchange. Dealing a blow to the rival nasdaq. The chinese emerge giant will trade under the ticker baba when it makes its debut sometime this summer. In a statement, the nyse said its pleased to welcome alibaba. Appearing on cnbcs fast money, the ceo said they competed until the very end for alley bibabaal. We were working hard to win the deal. I think we brought it to even. We put a very good run for the business. And we wish them the best as they try to the ipo. The nyse is leading the nasdaq in terms of overall listings this year with 611 is of all ipos nearly 21 billion in proceeds. Lets take a look at some earnings news. Nikes Fourth Quarter beat forecasts on Strong Demand from the u. S. And international markets. Sara eisen filed this report. Investors cheered nike results after the bell today. The company putting out better results as a result of continued sales growth. Revenues coming in at 7. 4 billion for the quarter, better than the 7. 3 that analysts were looking for. Operating margins also improved for this Company Thanks to higher prices on some of those items. In terms of futures orders with a lot of folks on wall street look at by geographic breakdowns, two bright spots for nike, including western europe up 22 and china up 6 . Analysts looking for only a 2 number there. Emerging markets coming in light. Costs rising for this company. Nike and adidas shelling out big bucks on the world cup. In fact, one of the executives on the Conference Call, charles edwards, the head of global brand, saying he just returned from brazil and has never seen so much excitement. Mark parker saying digital is his number one priority. We are building an integrated system of Digital Services that will provide seamless access to our products, a full array of services and the most advanced digital tool to measure, motivate and inspire. Three key areas that nike is focused on in terms of growth fo Going Forward highlighted on the Conference Call in terms of executives. Soccer, an area that adidas has traditionally dominated, nike continues to grow its market shares. Running, which is a dominant position for nike and womens apparel and footwear. Executives there saying it grew 12 during the fiscal year and theyre expecting a huge opportunity there. Back to you. Dupont is its Second Quarter and fouryear profit outlook. The company cites slow sales in its farm business. The Company Warns its performance chemical segment will be hurt by a lot of selling prices for refrigerants. Meantime, you can see the number there, as well. Still to come, bitcoin for sale. An Online Auction of bitcoins seize the last year. More coming your way. Fifteen percent or more on car insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. 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. At a special site for tv viewers; over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. Amazon is said to launch a local takeout Food Delivery Service in direct competition to seamless and club harbor. The service will initially be part of am zop local, the companys app that offers users daily deals and coupons from neighbor stores. The Delivery Service launched in seattle on tuesday but was then taken down. It should go live again soon. The u. S. Marshall service will conduct a 12hour Online Auction of nearly 30,000 bitcoins seized last year. The currency is worth about 17 million. The fbi raid ed it last october. It is known as a hub for transactions involving Drug Trafficking and other criminal activities. Over the past five weeks, weve looked at how social, mobile are disrupting enterprise. But in our final episode of tech drivers, were looking at how those very same technologies are powering the future of commerce. Here is Sri Jegarajah with an insight into the economy. June 11th, 2014. Traffic in london, and other major cities across europe ground to a stand still as thousands of taxi drivers demonstrate against an app that they say creates a very unfair Playing Field on roads across the region. Uber allows taxies and drivers to coordinate their trip and fees directly without an agency. The protests were just the latest in a growing trend. Taking on traditional economic models via the sharing economy. The sharing economy is the combination of the online world applied to the offline world. So bringing goods and services that will be disorganized in the physical world into an efficient manner where anyone can access them in a flexible way at any time. Its an idea that comes from the peer to peer models pioneered by music sharing apps like mapster and legitimized by the likes of ebay. But traditional value propositions and Services Like transportation, accommodate and Money Lending is huge. Estimates of peer to peer financial lending reach 5 billion in 2013. Car sharing revenue res expected to hit 3. 3 billion by 2016. And at the end of the april, air b b closed another round of funding at the 10 billion valuation. But while the peer to peer industry looks set to boom its effect on traditional ones, its hard to ignore. A recent uc berkeleys study, for example, shows just one shared car can remove nine others from our road, something that would have a big impact on an automakers bottom line. Whats happening is that these sharing economy businesses are disrupting regular economy businesses and not everyone is happy about that. In particular, the people who get upset are regulators and the incumbents. Tease been particularly true with uber and lift and the people challenging the taxi industry. So how are existing heavyweights evolving . Walmart plan toes offer customers discounts if they agree to deliver to others in their neighborhood. General motors invested in car sharing stock of relay rides while aadvice bought out Car Sharing Service zitcar. It welcomed black cab. This is all about choice, both for the consumers and the drivers. Our consumers have welcomed uber here in london in the last two years that weve been here, but as we all know, black taxis are an icon of london and we want to offer that to our consumers, as well. Analysts warn the sector is moving fast, meaning these new Service Companies are really only a click away from being disrupted themselves. The starters in the space are working to establish what sets them apart. The companies themselves have very little in the way of assets because they really own nothing. Let me bring you the latest now from an italian bond auction. This morning, weve had italy auking a 10year bond with a yield better than the euro lifetime low. That tenyear yield thats been offered at 2. 81 versus 0. 31 back on may 29. A fiveyear was offered at 2. 4 there is a level that was going to be offered to the market, about 6 billion worth of supply. You can see across on italian bonds today. Europe is just picking up a little bit on markets, but we do have stock markets in positive territory. So in lock step with that trade. Still to come on this show, will investors go ga gaga for ba ba . Wheat got the latest on the much anticipated ipo, coming up next. Welcome to worldwide exchange. Im karen cho. These are your headlines from around the world. Association agreements have been signed by georgia, moldova and ukraine. Russia says ukraines agreement may bring grave consequences while the georgian Prime Minister tells his channels he expects no issue. So far, we dont see any signs of complications. We would like normalized relzs wi relations with russia. Barclays ceo says he will fought tolerate circumstances where crimes are misled. This as investors reportedly abandon the bank amid the dark pool fallout. Nike gets a boost from the world cup. The sports wearmaker beats expectations on earnings as excitement over the football tournament boosts sales. Its shares jump after hours. And the New York Stock Exchange wins the battle for allibaba in what is expected to be the biggest ipo take ever. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. If youre just tuning in, good morning and thanks for joining us here on the program. Let me show you how markets are faring ahead of the u. S. Open today. A little bit challenging is the picture across the boards on futures. It follows after a somewhat difficult session for many of these indices. We had the Consumer Spending numbers less than forecast. The selling them was compounded by the fed official James Bullard talking about the prospects of Interest Rates rising by the end of the First Quarter next year. So the selloff that took place yesterday, expected to continue today. But so far, european markets have been tracking in positive territory. Trying for a positive handover for your session. We are pealing up from the highs on the periphery. We were up just over. 5 on italy. Still gains across, a little bit off the 0. 2 levels we had on the xetra dax and the ftse on its last check. How do you make money on these markets . Here is what some of the experts have been telling us this morning. I think there is a huge amount of Energy Resources out there that we havent tapped, particularly gas. Weve had to focus on sail gas, but its not just shale gas, theres a lot of conventional gas out there. There is this transition from oil to gas. Well continue to go on. When you read the fed minutes and when you listen to yellen, one of the things that yellen has been talking about is, of course, also Financial Stability and her concerns that maybe we have to limit the margin debt here. The first banks are really questioning, but they are also a good value there. If i look, for instance, in societe generale, you can find good buys. And from the investor activities there are an area to play. And just a quick recap of our top story today, a trade agreement between the eu and ukraine has anchored russia. A spokesperson for Vladimir Putin may resolve in grave consequences. The eu Association Agreement signed by georgia today. The georgian Prime Minister told this channel that talking between both sides is the only way forward. Dialogue is the only solution out of this crisis. Dialogue siveisnt working r now. Otherwise, there is no other to dialogue. So do you put pressure or do you at least say to president poroshenko here that the ceasefire should continue despite the fact that the separatists arent abiding by it . Well, we didnt have a chance to talk about it, but i know that theyre seeking some solutions. And i think, again, i want to repeat that the dialogue is the only, you know, solution for this crisis. The Ukraine Russia crisis, some analysts have been pointing to a refugee situation, putting just a little bit more pressure on russia. We have some information on just what is taking place on the border just crossing from the unchr. Theyre saying theres a sharp rise in the displacement of ukraine with 16,400 people just in the past week alone. 64,400 have been displaced in the country. The Organization Goes on to say people in the ukraine fighting, threats, the use of abduction and destruction of state services in total, 110,000 people have pled ukraine to russia so far this year. 9,500 have sought refugee status. It does put a figure on what is happening there in russia and ukraine. Its been a very busy week for the u. S. Ipo market with 16 deals coming to the market, the most since december 2006. Courtney reagan is at cnbc headquarters with more on this ipo frenzy. Good signs for the bulls, courtney. Yeah, it is, karen. It has been a constant battle over the past few years between the New York Stock Exchange and the nasdaq. For the most ipo listings and the most high profile deals. The nasdaq has had a good week in terms of big name ipos. Gopro went public thursday and soared 31 in its debut. Pretty easy debut, as well, which we should note as the facebook one wasnt so far. Founder nick woodman rang the nasdaqs opening bell while shooting the ceremony with a gopro camera. The average return on the first day of trading is about 7 . Michaels, the largest u. S. Arts and crafts retailer, prices offered at 17 a share, raising 473 million, valuing the company at roughly 3. 5 billion. Micha michaels has more than 1200 Stores Selling scrapbook supplies, classes on baking and jewelry making. Those are profitable with 4. 6 billion in sales last year. Michaels was taken private in 2006. It filed for an ipo in to 12. But pulled those plans after its ceo had a stroke and stepped down. The company was hit by a data breach this april with about 400,000 credit and debit cards being affected. The ipo price of the year is going to the nyse. Alibaba will list its shares there under the Ticker Symbol baba. The chinese ecommerce giant is expected to go public sometime this summer with an estimated valuation of more than 200 billion. That could be and could make it the biggest tech ipo ever. In a statement, the nyse says its pleased to welcome alaliba. Appearing on cnbcs fast money, the Top Executive says the exchange competed to the very end for alibaba. We had been working very hard to win the deal. I think there were reports that we were behind. I think we brought it to even and i think that was where we wanted to be and i think we put a very good run for the business. We wish them the best as they try to execute the ipo. Nasdaq was home to the most ipos every year from 1999 to 2012. Then the nyse pulled the event won the most coveted ipo last year to twitter which accounted for 61 of all ipo listings this year. And the year is not over yet. Its only june. Karen, back to you. The halfway mark so far. Courtney, thanks for the roundup there. Lets get out to kathleen. Let me kick it off with the sentiment first around ipos. It feels like a real divide between what is happening on the u. S. Market versus the european markets. This side of the world, we have seen some of the issuans going below the range at the bottom end of the range whereas stateside it seems like all the bull signals are very much intact. Even with gopro right towards the top of the range. What is the feeling on the sentiment . Certainly investors were very excited about gopro and it traded quite well. In order for gopro to trade well, it was priced fairley conservatively for the management. I think thats what the formula was, to make this ipo work. And not every ipo priced in the u. S. Is being priced at a premium. So we had a reset here in the marketplace and march and april. And that lowering of valuations for these high growth tech and Biotech Companies has helped put some returns back into the ipo market over the last month. So if we just take away the gopro headline, i think well see underneath the covers a more conservative u. S. Ipo market. That is why were getting the returns. Critics point out you have a lot of private Equity Companies bailing out of existing investment. Some people see that as a sign of the top of the markets. Interesting. We can go into the private equity because we know that yesterday in addition to gopro, under the headlines was the Service Master ipo. And that was a private equity tightly leveraged company. They make pest control services, building services. That company, to get the ipo done was priced below the range at 17. They had a range of 18 to 21. The ipo traded up about 5 on the first day. So to get that to work, it was priced down. Investors are a lot more price sensitive about leveraged ipos and i think that will be the case with the Michaels Companies ipo that was priced last night at the low end of the range and will open for trading today. Kathleen, if you had the window of opportunity, the nyse is certainly making hay, but some people questioning the ability of the nasdaq here to the loss of the alabaleibaba li. If you look at the reasons behind it, the nasdaq doesnt seem to have recovered from some listings, but are there other reasons you think the nasdaq didnt secure allibabaalibaba . Actually, i think the nasdaq and the nyse is inning doing a good job battling each other force these listings. The nasdaq has had ever single pieo tech this year. And i think the New York Stock Exchange probably leads on the laermg ipos. I would add the insight on alibaba. When the jpo income came out, which is the competitor of alibaba when it comes to ecommerce business to consumer, jd. Com chose to list on the nasdaq and we felt that almost everything jd. Com has done, alibaba will do something different, including totally different underwriters and here with a different exchange. So theyre going to be different. Appreciate your time today, kathleen smith, principal, renaissance capital. Moving to the latest comments from Vladimir Putin who has been speaking today, hes called for longterm ceasefire in the ukraine and talks between representatives of kiev and eastern regions. This is key because the ukraine has signed this trade agreement with the uk today and Immediate Reaction from circles in russia, from the ministry were negative. The Deputy Foreign ministry for russia saying great consequences will follow the uk signing with the agreement and they this comment is very different from what putin is saying where hes talking about further talks on the diplomacy front. That was in lock step, what the georgian Prime Minister was saying, i should say, and interesting that he is taking a more diplomatic view which it seems as though the rest of the ministry is suggesting the tensions might be ratcheted up at this point. That is the latest from Vladimir Putin. Make your own assessment. The u. S. Soccer team is through to the knockout stages. Well bring you the latest of world cup and sports news right after the break. Ukraine signs an eu agreement. Banks barclays following dark pool allegations. And the u. S. Advances to the Fourth Quarter. Yesterday, gains saw germany taking on the energetic u. S. Side in rainsoaked stadium. They struggled to capitalize on their attempts for goal. It was deadlocked in the 51st minute. Germany hung on for the win with the usa finishing in second place and surviving the socalled despite being at 30,000 feet, the u. S. President found time to watch the game. Obama was on a white house trip to minnesota at the time. After the game, he praised the usas efforts in the tournament so far. I have to begin by congratulating our u. S. Soccer team, team usa, for advancing. The next round of the world cup. We usa usa saus usa absolutely. Now, we were in whats called the group of debt and even though we didnt win today, we were in the toughest grouping and, well, we got through. But weve still got a chance to win the world cup and we could not be prouder of them. They are defying the odds and earned a lot of believers in the process. Very nice explanation there by barack obama. Imagine if team usa had actually won. Dallas rivalry off the pitch, too, between nike and adid adidas. The world cup performance weighed on nikes earnings in the Second Quarter. For the first time, nike sponsored more National Teams in the world cup than adidas. Lets get out to annette for more in frankfurt. Viewers have been inundated with nike advertising. Yes, that is true. Nike advertising is attracting more interests than the ads from adidas. Bottom line, what does this story mean for adidas who is, of course, the biggest supplier for soccer gear still in the world is that the gap between nike and adidas is actually closing. Because nike is doing rel well in investments in europe and now with the u. S. Kick off on the football front and showing real interests in soccer, that could do something really good for nike sales in the Northern Hemisphere of the United States. Adidas, at the same time, could benefit from that. If the players in the states or if people in the states really get into the football or soccer mode, probably they also will buy adidas gear and that is a huge market, of course, for adidas. First of all, ill send it back to you. Both teams are still in. Both players and, of course, nike is supplying the gear to the United States and adidas is supplying the gear to the german team. Karen, with that, back to you. Annette, thank you very much. Im looking forward to see the world cup. Lets take a look at the rest of yesterdays world cup action. Renaldo got on the score sheet. Ghana hitting home. Coming from behind, algeria had a draw with russia. Belgium beating sought korea. Lets take a look at the final 16 action. It kicks off tomorrow when practice zill takes on chile. Colombia plays uruguay. From the pitch to the links, tiger woods has returned to the golf course three months after having back surgery. As ea mon aftermon javers, tige affects the bottom line of golf it was a Beautiful Day for a comeback here in maryland. Tiger woods returned from back surgery in his first event back. He said he was coming back a little bit ahead of schedule. He was thinking about coming back for the british open in july. Instead, hes here today, playing in a Charity Event that benefits the tiger woods foundation. Its the quicken loans national. He said if it wasnt benefiting his own foundation, he probably wouldnt be here. But so far is depending on this reentry for golf into tiger woods, not just about golf, but about business. Dollars and cents on the line here. Events without tiger woods. Ratings are down between 25 and 30 . We saw that with the masses. Just a little while ago where the tigerless matters had under 11 million viewers, that was down 25 from the previous year. And the impact on ticket sales, tiger only announced he was going to be at this event last friday with just hours to go before the deadline to commit. He did commit and stub hub tells us the prices for tickets increased in the aftermath, but not as much as it would have with more notice. Nonetheless, tiger is back in action. The business of golf is going to be very, very happy about that. Well have to wait and see how he does. Back to you. Markets are seeing a fairley weak start at the anticipation of futures this morning. You can see continuation of the selling we had in the session yesterday. U. S. Futures are flashing negative. Coming up to the start of the session this morning stateside. Lets get more on what is anticipated today. Joining us from the cme is tony wore wits, author and founder at average jjoeoptions. Co averagejoeoptions. Com. We saw the market challenged yesterday by weaker than expected Consumer Spending numbers. But then we have those comments from James Bullard suggesting rates could go up. Good morning, karen. I think the market is really waiting for if theyre actually going to do this. Weve had conversations like this in the past, that there may be something. But at the end of the day, money is still really, really cheap and at the end of the day, the fed is still going to back the market. And if the market shows any real signs of selling off, at this point, janet yellen and the rest of the crew is going to still be there to bail it out. We now have the yellen put. Which still sounds like the goldilocks scenario to me. How important are the Consumer Sentiment numbers were going to get today . The truth of the matter is, if you look at gd on wednesday, the numbers dont mean anything. Its cheap money, what the fed does. Youre basically forced, if you want to put money away somewhere, you can only go into the equity market if you want to try to get some yield. Thats really the problem. Thats why were building more of a doubletype environment here which is closely watched by janet yellen. The fed is where they make their announcements based on where it is in the equity markets. Weve still got a bunch of people coming to the markets. Isnt there more room for u. S. Markets to travel higher . You happen, listen, i cant say that were at the top. I cant say that we cant go higher. But this is always a sign. The overexuberance of more ipos. Why is there more ipos . Because theres more cheap money around. We are nearing territories where we cannot disdain. Everybody seems to forget that food and Energy Prices are getting so out of line here that the average joe doesnt have Discretionary Income to spend. Where are we going to say . How are we going to continue to compel the overall economy . Well see next fry or next thursday that the jobs were getting are not good. Maybe theres more jobs, but theyre not coming in at higher paying so it becomes a very big problem. Thank you very much, todd horwitz, author and founder at average joe option. Com. That is all for today. Im karen cho. Thanks for watching worldwide exchange. Good morning and welcome to squawk box. Two trading days left in the Second Quarter and that would mean the first half, as well. The bulls are battling to keep a quiet summer rally alive. The world cup of sex is rippling through all parts of american life, isnt it . Nike helped by soccer fever. And only in soccer do you lose and were just so happy. And rethinking major labor decisions, a Supreme Court ruling causing a mad scramble at the nlrp about. 436 decisions made by these guys that werent legitimate we find out, 90. Its friday, june 27th, and squawk box begins right now. Summertime, everybody. Good morning and welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. The s p closing lower in three of the last four sessions. Weve been watching the futures this morning. We see no major issues. S p looks like they would be down by just over 4 , dow jones by just over 23 points and the nasdaq down about 6. It is a quiet day for data. The only specifics well be getting today is a final reading of june Consumer Sentiment. In asia overnight, the nikkei fell by more than 1 . For