Transcripts For CNBC Worldwide Exchange 20140722

A warship to russia as planned despite deep criticism from both sides of the atlantic. In corporate news, litigation talks talking its toll on Credit Suisse following a 8. 5 billion settlement with u. S. Authorities. Shares dropping to the bottom in market after a disappointing set of Second Quarter numbers. The failed deal with omnicom is partly to blame. We have been too much focused on the omnicon deal. These certainly generated questions over the daytoday issues. Youre watching Worldwide Exchange, bringing you Business News from around the globe. Hi, everybody. Welcome. You are watching Worldwide Exchange for the next two hours. I just want to update ow some flashes were just getting across our wires. Were seeing uk politicians talking, saying that they need to send a clear signal to russia, the world has changed since the recent eu meeting took place. He says expectations have changed and the eu needs to go further. A terrible incident that happened because of russias support for these separatists, referring there to the recent planes that were shot down at the end of last week, mh17. Well be talking a lot more about what the prospects are for russia and ukraine and where were going from here. Well be doing that here within the next two hours or so. Lets update you that the Dutch Foreign ministers speaking out of brussels, saying theyre willing to adopt further sanctions against russia. We heard from uk cameron yesterday afternoon speaking before the house of commons suggesting he would be suggesting further sanctions during the meetings in brussels today as though by the looks of things theyre not off the table. Again, well be talking more about this. But in general, theres strong rhetoric emerging, fresh sanctions from russia on the table, as mentioned, the lithuanian and the latvia Foreign Ministers both said theyre seeking an arm embargo against russia. Hadley gamble is looking at how the conditions have changed the west outlook. My point is that those would theres nothing to do with them. Its a mistake. Thats tragic to mind came recently to those who felt really secure and, in fact, it had nothing to do with the conflict. There are a lot of victims, coming from the western european countries. So this is really changing the situation. I believe its a turning point, whether we will take it seriously, whether we will the situation for full responsibility, its up to us. What economic sanctions are you looking for . Economic sanctions are not yet decided. Also for receiving sort of decide it should be measured. But in my understanding, weve not yet exhausted these measures against individuals because we are not coming closer to this circle is which is Decision Making circle. Thats the point. Thats the essence. This is influential. This has effect in spite of trying to it tries to say to neglect this or to down play. Its not true. It has effect so we can do that. Let me mention military embargo, which has not been introduced. When were doing this for the country which we will accuse and aggression. Its something to be done. How do you including that. You know, there are some deals which we cant explain economically what we cannot understand. Latvias foreign minister told cnbc what needs to be achieved by his counterparts at this meeting. Should send a very clear message of support separately. Second, i think that one thing that is not sanctions, but security of the opinion is th that ban on all kinds of experts, of military technology to russia. I think it is very difficult to explain in public and out of public how the media can they are selling not only ships, but different kind of technology thats been designed not probably somewhat deliberately, but in the case of missiles and because after that so were talking about a possible arms embargo . Well, well see. We will be discussing. Now, earlier here on the channel, lord mark melabrown told the channel much evidence points towards guilt on the part of vladimir putin. Sfwh while putins finger was not on the trigger when it happened, i think theres plenty of evidence, and the Financial Times has done a particularly good job of pulling all this together, to demonstrate that it was putins support to the separatists that created conditions, that the separatist, probably in a tragic accident thinking they were shooting down a transport plane instead took down this airliner. All right. So just checking in on our european markets then this morning, we were called a couple of points higher. All things given within the last day or so, half a day or so, weve seen more cooperation between russian separatistes and international authorities. And thats led to a little bit more leeway with regards to a potential solution being found to the desks that are taking place now in ukraine. So the stoxx europe 600 this morning, youre seeing some slight gains, higher by half a percentage point at the moment. We saw a lower close on the european markets last night when we closed out, but by and large, relatively stable trade scenes according to many analysts compared to whats taking place. We are looking at a heating up in rhetoric both with regards to whats taking place in the middle east as well as here in europe. The ftse 100 higher by 0. 6 at the moment. Youve got the xetra dax higher bay similar amount. Cac 40 up, the micex index recovering a little bit from the drop that we saw yesterday. The russian markets were off somewhere in the region of 2 , 2. 5 on yesterdays session. Now higher by around a percentage point. So were seeing buying back into some of these indexes today. Now, when it comes to some of the spec stocks that were looking at, ig group, pretax profits beating expectations, rising by 1. 3 on the year for the full year ending this may. The betting and cfd provided they posted net trading revenues, which also were higher, up by 2. 4 . You can see a jump up by 6 . Royal mail, off by just over 1. 5 , warning on full year revenues. The companys performance has been threatened by rising competition, so thats trading lower. Then youve got holdings over here higher by 2. 5 , rallying a bit as the firm has upgraded its full year profit forecast after this years Biotech Company released Core Holdings thanks to the sale of a new drug. And hydro falling 2 . So a slightly mixed story this morning with regard to some of these stocks that weve been watching. When it comes to the fixed income markets, were seeing a little bit of selling in the u. S. And the u. S. Tenyear. Youve got the gilt seeing a little bit of selling with yields pushing higher by 2. 5 at the moment. The tenyear italian, youre seeing a bit of buying, holding on to the level of 2. 7 . The currency markets, we have quite a bit of focus on the eurozone, Still Holding on to that 1. 35 level. In terms of the safe hach trades, traditionally we tend to see funds flowing into the yen and into the swiss trade. Weve seen that to some extent this time around. Well be talking more about currencies this time, as well. In the meantime, lets check on markets in asia. Sri jegarajah joins us out of singapore. Sri. Thanks, louisa. Its been very constructive in the main as you can see from the embassies behind me. With the notable exception of the jakarta benchmark, which we have seen some fairley major volatility today. Stocks are fairley stable forcing, but the declines have just started to accelerate. We were down by well over 2 at one point. A little bit on of stabilization. Still deeply negative. It comes down to the Election Results and the politics of the country. Remember july the 9th, both sides claim victory. The markets favorite, the reformist, to all intents and purposes, the result is not out yet, but the broad expectations were that they would declare jakowi the winner. What we have learned is that the president ial contend er probowo has rejected the decision before its been made. Hes ordered his representatives to leave the electoral commission. So he is refusing to concede. And we do understand that the next step could be a challenge at the Constitutional Court by proboho. So fears of unrest have sent this market down quite sharply. Weve seen quite a sizable decline, louisa, in the indonesian rupiah. Back to you now. Now, the Swiss Banking giant Credit Suisse will be joining us next. Hello, everyone. Foreign ministers are meeting in brussels to discussion further sanctions on russia and an arms embargo. The uk foreign secretary has been making comments in brussels. He says a clear signal needs to be sent to russia and the eu needs to go further. I spoke to the former British Ambassador yesterday. Where he goes from here is very difficult to say. I think hes painted himself into a corner. If he goes on this present course, its going to be very damaging to him, but it may be very difficult for him to be seen to be pulling back. People wont judge him by his words, they will judge him in particular on two actions, one, whether the russians do everything they can to facilitate an investigation and the other is whether they say military equipment moving back into russia rather than in the hands of ukraine and into the hands of separatists. Jim, we spoke late afternoon. Just recap for us what exactly it is that we anticipate to hear out of brussels today. And if you think theres any leeway with regards to negotiations. I dont think were going to hear more out of brussels today than what was anticipated. I would be surprised to hear more. Our understanding was that out of brussels, it would be a lot of talk about speeding up sanctions. But not much talk about more sanctions. And i was already surprised to hear chatting about an arms embargo, for instance. That would be very interesting. Although im not sure how that would apply. But in terms of that sound bite from the ambassador, i must say i totally agree with what he said. Putin has painted himself into a corner. I mean, somebody once said that putin is a great tactician, but a lousy strategist. And i think that applies here. The pressure on him, louisa, is really mounting, both of the possibility of tougher sangs. We heard Great Britain talking about taking it to another level in terms of sanctions. Well see how that breaks out today in brussels. But also that the strength of the u. S. Intelligence case was growing by the day, as well. Putin doubled down in ukraine, if he defiantly ignores the International Community and continues to prop. The rebels in ukraine, he could well incur, in my thinking, massive sanctions, at least its a possibility, and possibly also russia turning into a pariah state. If on the other hand he gives in to the International Community, he could cut his ties with the rebels, but hell look extremely weak and defighted in the eyes of all the ethnic russians throughout the region, especially in crimea, a recent acquisition that he certainly doesnt want to lose again. And even here at home, in places like moscow, where russians get a steady diet of antiukrainian propaganda on state television. These russians could abandon him tomorrow and regardless of his approval rating, that could plummet. As one analyst has said, they have cochoose between bad and worth and only has himself to blame. I think thats probably true. Hes looking for a third way out. Yesterday at the United Nations Security Council was the first time i heard putin encourage rebels to cooperate with the International Community. Back to you. Jim, thank you very much. Well see you again soon. As usual, i encourage you to get involved. Its interesting for us to hear your Vice President s and your opinions both on whats taking place with the russian issue and the middle east and gaza. Let us know what you think. European closing bell cnbc. Com. Credit suisse posted a 700 million swiss franc excuse me, let me do that again. Credit suisse posting a 700 million franc lost in Second Quarter. Carolin, im getting my currencies right. This loss for them, how impactful is it . How are they going to be able to absorb it . Thats a very good question. Going into these numbers, there was a lot of concern to what extent the hits would impact its asset gathering capability, the Wealth Management, the Private Banking side of the business, to what extent it would hinder some of the crimes linking business with them. And back in may, when that guilty plea and that huge 2. 6 billion fine was announced, the ceo said it didnt have any impact on our capabilities of doing business, but the impact on the business is minimal. So i asked him, two months later, what has the impact been . What are you seeing in your business right now . Here is what he said. Obviously, there has been some impact. We had to work through it. I think we certainly appreciate the support weve seen from our customers and a lot of the hard work done by our employees, as well. But you can see in the second quart quarter, it was a solid point of view from the customer flows, as well. 12 billion of new asset sess one of our stronger Second Quarter in the last few years. So it shows a lot of support from customers. Do you think the worst is behind you . You would think about that guilty plea out of the way, you would think we could finally see at night. You think we have the issue on the asset probe, do you see any further huge litigation claims forthcoming . Well, i think with this cross border issue and also with the fhfa issue we resolved earlier in the year, those were a couple of our biggest existing litigation issues. We obviously are working very hard to make sure that we have an extremely compliant business. We havent had any issues on the libor side. We dont have any material issues on the fx side. But, you know, obviously b, there are a number of issues that we continue to work through. We hope most of our major issues were putting behind us. Obviously, we need to continue to work and the environment is obviously dynamic. We mentioned the capital levels, 9. 5 . Thats fallen below that 10 threshold where you would to be, 11 is your longer term target. To get that capital level back to the level that youre comfortable with, and youve announced a number of smaller initiatives to bump up that capital level, any bigger measures that youll be looking at . No. I think we feel were well on track with the measures that we announced in conjunction with the settlement. We had a number of dispositions that we thought would help us and on top of that, we have organic capital. We feel confident well be above 110 by the end of the year. That includes an accrual for dividend. Once we get to 10 , were going to allocate half of our capital to distribution to shareholders. And that hasnt changed. That hasnt changed. Lets talk about the actually business, the underlying business, the fixed income side of the business. The u. S. Thinks ashley has performed better than forecast. Was that the same for you guys . Yeah. In fact, our revenues were even with where they were in a year ago quarter. Our credit and our structured products businesses have performed quite well in the quarter. But overall, we had a good result in our fixed income business. And you heard brady dugan there, the ceo of Credit Suisse talking about the outperformance in the fixed income business. Quite interesting. On the day when the fixed income business contributes to the majority of the beat, theyre scaling back and part of that business, theyre exiting their commodities business. Goldman sachs writing this morning, it was a beat, but it is a beat of poor quality because it comes from the fixed income business. That should bode well for the likes of Deutsche Bank because they have had exposure to that. Not so well for ubs because theyre lowered their exposure to that. Why . Because that fell up expectedly and thats not great news for the private sector. Carolin, thank you very much for that. Lovely seeing you. Now, in other earnings news, Chip Designer Arm Holdings has posted a ride in Second Quarter profit driven by rising demand. Arm expects revenues to continue to rise during the rest of the year. Speaking earlier on cnbc, he explained what was driving growth for his product. You will see more ways which people interact with their devices. And the way this works out what you need and what youre going to do before you even realize it. In entry level smartphones, similarly, were seeing very strong growth as devices become very low cost and opened up markets in developing countries. Now, swatch posted an 11. 5 drop in first half profit as margins came under pressure for the second consecutive year. The results were only slightly below expectations and the watchmaker sounded optimistic on the second half of the year. Speaking earlier here on the channel, the companys ceo said analysts failed to see the companys strategy to grow market share. If the analysts a bit concerned, then its even more to be optimistic and positive. They have never understood our business model. Its longterm. What we are not doing is when we take the Exchange Rates is to take the consumer and to be unfair with him and increase prices because the swiss franc is higher. Well, shares have been trading lower after weeks at Second Quarter numberes and a less than encouraging outlook for the rest of the the publicis ceo says this failed omnicom merger hurt the results. Also sticking with your earnings team, a couple of earnings in the u. S. Overnight we need to tell you about. Netflixs Second Quarter profit more than doubled as the Video Streaming Service group added 1 is. 7 Million Subscribers worldwide. Earnings missed by a penny while revenue was in line with forecasts. This comes as netflix xwlekted its first price increase in three years. The company warned that Third Quarter results could be hurt by International Expansion plans. Its going to be launching in germany, in france and in austria this september. Shares rising by well, almost 2 in trade. Chi poetlys Second Quarter profit rose 26 . Samestore sales surged 17 . Chipotle is boosting its samestore sales outlook. Its on a jump in shares in after hours trade. The german listing up by approximately 9. 5 . The company now has a market cap of 18 billion, twice that of burger king. Still to come, u. S. Secretary of state john kerry touches down in the middle east. Can he secure a ceasefire deal . We have live in tel aviv next. Hi, everybody. Welcome back. The baltic foreign minister is calling for an arms embargo on russia. Meanwhile, the Swedish Foreign minister is claiming modern russian tanks have been supplied to the separatists. Special t64 on the streets of donetsk yesterday. You dont buy them at the local grocery store. But, french president hollande says he still intends to deliver a warship to russia as planned, despite deep criticism from both sides of the atlantic. In corporate news, litigation talks taking their toll on Credit Suisse, posting their worst results since 2008 following a billion Dollar Settlement with u. S. Authorities. And putin shares dropping to the bottom of the markets in europe. The firm of publicis saying the deal with omnicom partly to blame. It is fair to say that we have been too focused on the deal with omni conover the daytoday business. The Israeli Military has confirmed that a soldier is missing, presumed dead in gaza, this as the death toll from the conflict between israel and hamas continues to rise. The latest count shows almost 550 palestinians and 29 israelis have died. Martin pletcher, middle eastern correspondent, joins us now. Martin, good to see you. Bring us up to date with regard to whats taken place in the last 24 hours or so. Hi, louisa, good morning. Israel confirmed the soldier was presumed dead. But yesterday hamas said they captured him. But it appears hes more likely to be dead because he was in a jeep that was hit by an rpg rocket. Seven people were in it and six people have been confirmed dead. We have to find out what happened to him. There was talk about a fivehour humanitarian truce, a rally in the fighting that hamas agreed to. Israel did not agree to it. All eyes are now on cairo where the united speaking on behalf of hamas, trying to come up with an agreement that can be agreed to by hamas and israel to arrange a proper ceasefire to stop the fighting. But if anything, the fighting is intensifying. And yesterday, israels Prime Minister netanyahu said all hamas wanted to do was what he called, quote, pile up the bodies. The more dead in gaza, the more hamas is using that to get sympathy examine support against israel. Mean wile, israel yesterday with the death toll yesterday of Israeli Soldiers are now 27 have been confirmed killed in this fighting. So its getting intense. But all eyes are now looking at cairo for those ceasefire talks. Louisa. Martin, thank you very much for that, martin fletcher, bureau chief in tel aviv at cnbc. If you want to get in touch and let us know your opinions, find us on twits. Tweet us directly, find us on email, worldwide cnbc. Com. Theres also one of the addresses that you can use, Worldwide Exchange cnbc. Com. Thats the email address. You can also find us on closing bell. Lets move on and talk about what were doing with regard to some of the data thats been printed here on our wires. Were looking at a uk june public finances print showing a bigger than anticipated deaf sigz. Youve got the u. S. Excuse me, the uk public finances figure. Uk june figure on of 9. 5 billion pounds sterling versus 9. 76 billion pounds sterling seen in june of 2013. When looking at the ender vengz, 1 is. 3 trillion pounds for the month of june, a 77. 3 of figure of gdp is the highest seen on record. Were sealing sterling coming a tad off these numbers. Our top stories, fresh sanction owes russia on the table and the luth wanan and latvia minister ves told cnbc theyre seeking an arms embargo on russia. Krpzs hadley gamble joins us now from brussels. The rhetoric has been ramping up here over the last couple of hours. That the. There seemed to be little appetite a few hours ago. But as we heard from the ministers as they were moving into the meetings, theres growing concern about the weapons on the ground in Eastern Ukraine. How are these separatists getting these weapons . Where are they coming from . I certainly have heard from the lithuanians about how concern they are about the weapons on the ground. You dont buy them at the local grocery story. We know where theyre coming from. They come in increasing numbers across the border in spate our commitment and in spite 06 our demands. Hes not the only foreign minister to express concern about these weapons. You also have in france a bigger discussion about whether or not the french government ought to stop the sale and the delivery of some warships that have been in the pipeline to russia for the last couple of years. The french has given no indication that theyre going to put a stop on that order. In fact, they said they are going to go ahead with it. We also saw the French Foreign minister moving into the meetings earlier this morning and he had no comment on that. The bigger question now seems to be since the eu seems to have little appetite for these economic sanction webs what they plan to do in terms of getting the arms. To deliver arms to russia in this situation is somewhat difficult to defend in my list. Hadley, thank you very much for that. Hadley gamble live from brussels. So the latvia and leth wanan foreign r Foreign Ministers have expressed a desire to launch an arms embargo on russia. British Prime Minister David Cameron denounced the warship delivery, calling on european country toes halt defense and arms trades with moscow. Only issue of defense equipment, as i said, we have unilaterally, as have the u. S. Said we would sell further arms to russia. Frankly, in this country, it would be unthinkable to fulfill an order like the one standing that the french have. But we need to put the pressure on with all our partners to say that we cannot go on doing business as usual with a country when its behaving in this way. Stephane joins us live from paris. Stephane, its going to be interesting to see which way france goes in the end. And its hard to know, louisa, is france is just trying to gain some time or if the tone has really changed from Francois Hollande. Because for the First Time Since the beginning of the crisis in ukraine, france is threatening to review its position. Its not planning to cancel the whole contract with russia. Speaking about yesterdays meeting, the french president , Francois Hollande is facing a growing international pressure, say that the decision to deliver the second warship will depend on russias stud over the ukraine crisis. However, regarding the serve, Francois Hollande said france was planning to go ahead with it because the current sanctions were not forcing the country to cancel the contract. There are a couple of ropes, actually, two reasons why its simply for france to cancel the contract. The final is a show for the full contract and in the case of a cancellation would have to pay 1. 1 billion euros to russia. The second is the ship has been built already and theyre guaranteed training in france on how to use this carrier. So the comments from yesterday seems like a bit of a strategy to gain some time, as you mentioned, Francois Hollande is facing a growing pressure from the u. S. And also from european countries. Stephane, thank you very much. I just wanted to brick you up to date with some news that just hit our wires here within the last couple of minutes. The indonesian president ial candidate p prabawo says he has withdrawn from the race. This move is unexpected. Youre watching Worldwide Exchange. Good morning, everybody. See you in a second. We started zya with the thought that the kid on the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device, up to the cloud it goes, back down it comes, sounding better. We break down the walls of creation and we give music creation for the masses. Unlock the creativity in anyone. With the ibm cloud. The ibm cloud is the cloud for business. Hi, everybody. Welcome back. The indonesian president ial candidate prabawo says he is withdrawing from the race alleged to massive fraud. The results of the president ial vote has been expected today. His move is unexpected. It sent shares in jakarta lower. Mark, welcome. Some unexpected news just hitting our wires, namely the withdraw of prabawo. What does this mean . Well, it is a surprise because there have been mixed signals coming out of his camp pep has a Broad Coalition of a lot of traditional politicianes. The mremts have been saying we should concede the race, we should realize even though it was close, it was what hardfought campaign and, on state it is buying said she should maybe some aragements. This is unprecedented in the nation of politics. Weve had 15 years of democracy since the fall. Elections thus far have been peaceful. Theyve been considered relatively fare. And actually, most experts say this election, this president ial poll was surprisingly fair. There were some irregular layerties at the local level, but many are saying it was even fairer than the parliamentary polls in april. So it seems like a strategy by prabawo, the hard liners trying to push things to a limit. What comes after that is hard to predict. But he does have a lot of hard line supporters, but im betting on the fact that the indonesian institutions have held up pretty well in the last decade and a half of democracy. According to his lawyer, hes not going to be challenging the vote in a Constitutional Court. They will be pushing the claims of vote, irregular layerties at supervisory agencies. What does this mean now for one of the other main contenders . Well, jokowi, as hes popularly known as in indonesia, is the winner. That will be announced very shortly. And i think theres growing consensus within indonesia to accept that current president , the sitting president , the incumbent as hes known is telling people to sell the results. I think tlm be disappoint that prabawo has seemingly backed away from this consensus making process thats been typical of indonesian electrics until now. So well see what happens. But clearly, jakowbi has won. Results show that it was less close than expected. Most people i think in indonesia will be supporting him as the new president. How business friendly is jakowi seen as being . Its a little bit hard to say. The election was characterized by nationalist slogans, indonesias Economic Growth has been driven by mining, commodity exports and theres been a growing sense that indonesians havent been getting the best deal. What he actually does in office is something else. Indonesia faces some difficult economic choices. Its rapid growth of recent years is now slowing. Theres clearly some need for structural reforms, problems with infrastructure and health and education. Theres a need in other areas of the economy for reform. Theres Expensive Energy subsidies. One interesting aspect there is his Vice President has been Vice President before and it was at that time that he helped make some difficult economic decisions that helped fuel the current round of Economic Growth. So theres some belief that maybe kalla will be an important adviser to jokowi in the months ahead when these important reforms need to be made. Mark thompson, director of Southeast Research center at the City University of hong kong on the back of surprising announcements, thank you for being with us. Now, these japanese government lowered its Economic Growth forecast for the current fiscal year. Please, tell us more about this. Hi, lieu swees sa. Yes, the government now estimates real gdp growth at 1. 2 in the fiscal year march 2015 instead of the previous forecast of 1. 4 had gross. The new estimate is in line with the estimates made by the bank of japan. But the current Market Expectations of 0. 85 growth. For the following fiscal year, growth is expected to accelerate to 1. 4 , supported by the increase in consumer and capital spending. In other news, the nikkei is reporting today that the government is planning to set specific targets for spending cuts to make a clear road map for a balanced budge. The japanese government has pledged to its revenues by 2020. But current estimates show a revenue shortfall for that year. This will be the first time that Prime Minister abes government details how it plans to achieve that balance by 2020. The government hopes to probe special security spending. And pay for government employees. The target plans will be finalized by next summer. Louisa, back to you. Thank you very much for that. We need toil whats on the agenda in asia tomorrow. Consumer inflation figures for the for the Second Quarter will be released. We have bhp billtons host of output, lg displays Second Quarter numbers and speaking of reporting, shares have been trading lower after a weak set of Second Quarter numbers. Stephane is in paris. Youve been speaking exclusively to the publicis ceo. Im starting with the reason why the company says a sharp slowdown of its growth in the Second Quarter, 0. 5 for the revenue. That is to compare with 3. 3 growth in the Third Quarter of this year. As a result, publicis said its target will be very difficult to meet. I spoke to the ceo of the company starting with the reason for this sharp slowdown in the Second Quarter. We expected a slowdown, but clearly not to that degree. And posting such mode of growth, 0. 5 , is something which has not been our history, habit or our ability. We could do much better and we should have done much better. The reason for that modest growth, first, the fact that europe has been much weaker than expected and weve had some which are still very negative, but also germany. We have, on the other hand, the emerging market which gets slowly to growth, but to a less level than expected. And we have two or three of our clients and this is creating some issues. This has certainly generated a distraction over the daytoday business. So we are back on the business, we are back managing our business very seriously and you can be assures that we are doek our very best to have a very good second half of the year. In terms of outlook, you warn that the 4 growth target this year will be difficult to meet. Do you expect to have a good guidance . We expect a very good second half of the year. Due to the fact that we have a delaying growth in this q2, we think that changing the level of growth that we have anticipated will be we are making our best effort and dabbling down to make sure that we deliver something. But it is fair to say that it will be difficult. Youre planning some cut reduction. Are you planning some job cuts . No, we are not planning any job cuts. We are planning to tighten our belt and to make sure that we are not spending when we can delay or after seeing some expanses and making sure that we deliver something which is close to our objectives. The crisis with russia will have a Significant Impact on the Global Advertising markets. Shares of publicis are trading 4. 3 lower this morning right after the opening. Stephane, thank you very much for that. In other earnings news, a Chip Designer Arm Holdings, driven by rising demand for its tellings. Arm provides devices used in the popular smartphone gadgets. Arms ceo explained what was driving the growth in demand for his product. You will see more ways in which people work with their devices and what you need and what youre going to do before you even realize it. At the mid range of smartphones, were very very smart growth. And in entry level smartphones, similarly strng growth as devices become very low cost and that opens up markets in developing countries. Now, Credit Suisse says the 700 million swiss franc loss during the Second Quarter as the bank absorbs charges from u. S. Settlement. And said it expected to save 1. 8 billion in the next profit. Speak earlier to cnbc, brady warned tough conditions could continue. I think theyll continue to have some impact on the overall level of activity. So far, we think conditions are similar to what we saw in the first half. Still to come here on the show, spicy results from chipotle, the mexican food chain beating forecasts with Second Quarter numbers. Well be checking that next. Hi, everybody. Welcome to Worldwide Exchange. Im louisa bojesen. These are your headlines from around the world. The baltic foreign minister is calling for an arms embargo on russia. Meanwhile, the Swedish Foreign minister is raising doubts over how modern russian tanks have arrived in Eastern Ukraine. It was through donetsk yesterday. You dont buy them at the local grocery story. French president hollande says he still intends to deliver a warship to russia as planned, despite deep criticism from both sides of the atlantic. Net flexs Second Quarter profit more than double. And chipotle reporting earns and stocks soaring as customers flock into the bureau ree trito shrugging off higher prices. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Hi, everybody. Welcome to the second hour here of Worldwide Exchange. Weve still got a lot to get through. Geopolitics still dominating the agenda. And well talk a lot more about both ukraine and russia as well as the middle east here in the next hour. I want to show what you were gearing up for here in the u. S. The markets opened a couple hours away. Were looking at slightly flat to a couple of points higher on the u. S. Markets. We saw a slightly higher call from europe falling a lower close on our european markets yesterday or last night when we spoke on the close. But our main european markets still seeing positivity. Were holding on to that sense of trade. Ftse 100 higher by 0. 75 . The zax higher, kakt 40 higher both by 0. 7 . The micec higher by 1. 7 , but losing some 2. 5 in trade last night. Lets check in on the markets in asia why and whats taking place there. Sri jegarajah joins us out of singapore. Hi, louisa. A fairley constructive back drop. The strong yen trend has paused and thats benefiting the exporters in particular. The mainland market and the hang seng have a very strong day today. The hang seng closed at its strongest level in 7 1 2 months. So its the carmakers and the Property Developers that led these indices higher. But here is the story. The jakarta composite is the lad ard today. It was down by well over 2 . Thats because of the politics. Remember this controversial result on july the 9th. Both the elections i should say both sides, jakowi and the formest Jakarta Governor both claiming victory. Today is a very important day. The Election Commission will decide in roughly about an hours time who the real winner is. But even before that was announced, prabowo has effectively withdrawn from the race saying that the whole electoral process was deeply flawed and we dont really know what his step is going to be. It would be a legal challenge at the Constitutional Courts and he could mobilize his supporters. Tease fear of political unrest in jakarta. The markets were down by more than 2 . They have recouped author lows. The indonesia rupiah was weaker, as well, on fears of political unrest. But one of the reasons why i think the markets are stabilizing is because prabawo doesnt necessarily have a strong body of support. In fact, a lot of his supporters have crossed over to jakowi. Thats weakening his position somewhat. Foreign ministers are meeting in brussels. The lithuanian and latvian ministers both say theyre seeking an arms embargo on before russia. Theyve been speak, hadley who is live in brulss for us covering the ground there. Hadley, its going to be interesting to see how these come together by the end of today, if they come together, and whether or not they manage to find out just how strongly they want to pursue the a third central round of sanctions towards russia or whether there are other avenues to look at. Absolutely, louisa. The big question was always going to be just how tough is the eu really going to be on russia . We didnt get much appetite for further economic sanctions. Those economic sanctions that they already have in place have hit germany particularly hard. But above now is the arms embargo. What are they going to do with these weapons flying into Eastern Ukraine . Where are they getting them and how is the eu going to stop them . T64, so to speak, in donetsk yesterday. You dont buy them at the local grocery store. We know where they are coming from. Theyre coming in increasing numbers across the border in spite the commitment, in spite of our demands. Also a bigger question involving the french, hollande has said two warships on order by the russians, one of them at least is going to be delivered despite mashg objections from David Cameron among others. And then were hearing here at the eu, these ministers come from a company that has real knowledge of russian aggression and theyre putting their eu counterparters on notice what theyre facing. We have history and legacy and my point is those we believe something happening has nothing to do with them, its a mistake. And thats tragic. To those who felt really secure and think this has nothing to do with the conflict, there are a lot of victims, theyre coming from the western european countries. So this is really changing the situation. Ebl its a turning point. What kind of economic sanctions are you looking for today . In economic sanctions are not yet decided. My understanding, its not yet exhausted against individuals because we are not coming closer to this circle which is Decision Making circle. Thats the point. And thats the essence. And this is influential. To down play, no, its not true, it has effect. So we really can do that. Also, let me mention military embar embargo, which is not yet introduced. When were doing this with the country which we will accusing the aggression. So this is really something also to be done. Including, including that. You know, there are some deals which we can explain economically what we cannot understand. There you heard lithuanias foreign minister talking about the real threat and hes referring to the russians, to president vladimir putin. Well see and see if the eu has a whole is listening. Definitely, hadley. Thank you very much. Were watching your comments via twitter and you can find us via twitter and email. Worldwide cnbc. Com or on twitter louisa bojesen. A look at some of the other top stories today, bill ackman is saying hell expose herbalife as an incredible fraud in a presentation hes making today. The billionaire investor has raised a high Profile Campaign since 2012 accusing the company of run ago peer mead scheme. Ackman says hell show evidence of fraud ator ba lyes stores. Herbalife is down by 14 since ackman as announced that webb cast last week. Ahead of ackmans presentation, herbalifes cfo will be on squawk on the street today at 9 00 a. M. Eastern time. Time warner taking steps to head off a potential hostile takeover offer. The Media Company has adopted a provision to make it harder for shareholders to force a vote on a sale or try to replace the board. It wont be able to call for a special meeting before time warners annual Shareholder Meeting next week. Last week, though, the Company Rejected Rupert Murdochs 80 billion offer in time warners german trade flattish to slightly lower. Ahead on whats on the agenda in the United States today, the june cpi data, out at 8 30 eastern time. Consumer prices are forecast to rise by 0. 3 and 0. 2 when you exclude food and energy. At 10 00 a. M. , we get existing home sales. Well be talking more about home sales here in about 20 minutes time or so. Its a big day for earnings, coke, comcast, dupont, mcdonalds, lockheed, harley davidson, among those well hear from before the bell. Weve been talking about what to anticipate for apple. That interview coming up in around half an hours time. You may know businessmen who founded microsoft, but could his next project be something more humble . Maybe a book club. Gates has recommended six books to read this summer. The list includes works on business, finance, obamacare, and dont worry, if you have enough of that, theres a romantic comedy smack in there, as well. Whats on your reading list this summer . If you want to tell us on a lighter note what youre reading, thats always nice. Im reading a book called the history of the mediterranean. And it is probably the most boring book ive ever read. I maybe sure say that. Its very, very difficult to get through, but i will read it, i will persevere, because its phenomenal, all the stuff that you learn, right . Up next, netflixs Second Quarter profits nearly double. Well get your Earnings Report cards ready and well talk about that in sa second. Hi, everybody, welcome back. Netflix adding 1. 7 Million Subscriber as earnings nearly double. And chipotle sizzling with better than expected samestore sales. A couple of Earnings Reports out overnight, netflixs Second Quarter profit nearly doubled as the group added more than 1. 7 Million Subscribers worldwide. Revenues in line with forecasts as netflix implemented its first price increase seen in three years. The Company Warns it could be hurt by International Expansion plans. It will be launching in germany, france and austria. In september, shares rising by around 1 in after hours trade. Currentsly, german trade up by around 1 1 , as well. Chipotle, samestore sales surging by 17 as the burrito chain raised prices to offset costs of beef, Dairy Products and avocados. Its now boosting its samestore sales outlook. It has a Market Capital around 18 billion, twice that of burger king. In german trade, up we around 10 , as well. Andrew berkeley, from oppenheimer and Company Joins us now. Good to see you. Lets start with the earnings season. Its staying pretty strong so far out of the u. S. Do you anticipate this strength to continue in the earnings that we havent yet seen . Yeah, absolutely. Its been a really good earnings season. Weve had about twothirds of Companies Beat on eps. But more importantly, about twothirds of companies are beating on revenues, as well, which is a little different than prior quarters. We know the expectations coming into this quarter werent particularly depressed. Analysts, as a consensus, were looking at about 5 year over year growth. So far, its been technology and financials. Which are a little bit, you know, different perspective. Financials, the expectations were pretty low. And the results arent particularly good, but theyre stepping over a pretty low bar. As we move forward, the next two big sectors are going to be energy and consumer discretionary. And i would say consumer discretionary, the bar is relatively low, especially when you get to retail. So i do expect the upside surprises to continue here. How much further do you think markets can go before they start to pay more attention to geopolitics or will they . Because right now, it doesnt really feel that way. You know, i think the markets have been incredibly resilient and with the unfortunate Geopolitical Uncertainty we have out there. Im not sure that the strong earnings season is really getting appreciated. Weve been more consolidating in the market for most of the month of july. We peaked early july and the labor report and the market hasnt really made much upside progress even though we have had good Earnings Reports. So once the maybe geopolitical situation ps calms down a little bit, maybe the markets start to focus on earnings a little bit more. But my bigger concern would be on the inflation or the Interest Rate front. And i think, you know, well get a pretty important data point today when we get cpi. I think thats a bigger concern for the market than earnings. So where do you see value at the moment . What would you be buying still if we want to remain optimistic if that be the precedent thats being set . Yeah, i think later south carolinaals. I would still stick with that, our three favorite sector res energy, technology and industrials. And especially larger cap names within there. So we would definitely recommend rotating up for the capitalization spectrum away from the small cap to large cap in some of those later south carolinaal areas. I think its a play on infrastructure spending, certainly whats going on in the use, i think thats a strong story and those names definitely keep going higher here. Andrew, thank you very much for being with us, andrew berkeley, head of institutional portfolio strategy at oppenheimer. Still to come here on the show, u. S. Secretary of state john kerry touching down in the middle east. We are live in tel aviv, next. Xc hi, everybody. Welcome back. Were a couple of hours away from the u. S. Markets. But were looking at the u. S. Being called a couple of points higher by the looks of things. Similar pictures emerging in europe. Yesterday, signs of collaboration between the russian separatists and International Investigators regarding flight mh17. That led to some people thinking we were moving more in the direction of finding some type of solution with regards to ukraine. The Israeli Military has a solar missing presumed dead in gaza as the death toll continues to rise. Almost 550 palestinians and 29 israelis have died. Israels Prime Minister claims hamas wants to pile up the bodies to generate sympathy. The Prime Minister was explaining the reason behind his decision to line up a ground on offensive in gaza. To a certain point, what would you do . What would you do if American Cities would absorb hundreds of rockets . You know what youd say . Youd say to your leader, a man has to do what a man has to do and you would say a country has to do what a country has to do. We try to defend ourselves. We try to do it with a minimal amount of force or with targeting military targets as best as we can. But well act to defend ourselves. No country can live like this. Lets talk about the civilian deaths. The last night our network airs scenes of the largest hospital in gaza having to turn away dead bodies at the hospital morgue. There was no room. Youve seen the widely chronicled story of the boys on the beach in gaza who were killed. How does it strike you as a father, as a human being . Its very saddening to see any of these simpcivilian death very sad. We dont seek to have even one civilian death. Were targeting hamas terrorists. I can tell you that we opened up a hospital, a humanitarian Field Hospital on the edge of gaza and hamas doesnt let the people come there. Theyre hiding rockets in hospitals, theyre hiding arms in hospitals, theyre shooting from hospitals. They just dont carry. They break every rule in the book, piloting civilians in places where theyll be put in harms way. I think to the extent there is any blame it should be laid squarely to hamass door. These are not symmetrical conditions. It is a situation, mr. Prime minister, that civilians are dying in droves, that weve seen pictures of children wandering the streets of gaza no longer with homes to return to. Our president again calls for a ceasefire. Are you willing to talk to hamas in any form . And what are you willing to agree to when secretary kerry gets to work there . Well, weve agreed three times to the successive ceasefires. Really the only initiative is the Egyptian Initiative supported by the arab league, supported by the u. N. , supported by slael. If hamas wanted to end this, they could have ended it. I think john kerry will come here. I think he should stand behind this initiative. If people want to end it, it could end. Martin fletcher is standing by now in tel aviv. Martin, several hundred of the palestinians that were detained during the search just a couple of weeks ago, some saying that they need to be released, as well, for things to move ahead. Well, thats right, louisa. Thats one of the key conditions of hamas. But those three basically, the killers of the three jewish teenagers, they were murdered, of course, to be released. Also all of the people rounded up from israel at that time. Israel took that opportunity, theres no doubt about it, they denied it, but its clear to everybody that they used the opportunity of the search for the murderers to, at the same time, attack the infrastructure of hamas on the west bank. They arrested about 500 members and leaders of hamas. The hamas in gaza is saying as part of offer conditions for the troops, israel must release those people arrested after the murder of three teenager israelis. Now, israeli sources say that the political arrests after the killing eventually will release those people, but they do say that the actual killers themselves will be put on trial and sentenced and whatever happens will be it will happen to them. But the other key condition hamas has is that the siege of gaza be lifted. Thats the key area the political groceriers are discussing. How to monitor the lifting of the siege and the question is whether that will be enough for hamas. Martin, thank you very much for that, martin pletcher, middle east correspondent and bureau chief. Were just getting some flashes through. By the looks of things, britain has now announced that its holding a Public Inquiry into the death of the former kgb spy alexander litvinenko. He accused putin of ordering his death in 2006. We will keep you up to date on that when we get more on that. After the break, we have more on whats taking place with regard to the u. S. , market housing sites and pilg permits. Is a housing recovery really on track . Well preview existing home sales out later today after the break. Stay with us. Youre watching Worldwide Exchange. Hi, everybody. Welcome. You are watching Worldwide Exchange. Im louisa bojesen. These are your headlines from around the world. The baltic foreign minister called for an arms embargo on russia as they arrived for key talks in the brussels. Meanwhile t64 so to speak in donetsk yesterday. You dont buy them at the local grocery store. French president hollande, though, still saying that he intends to deliver a warship to russia as planned, despite the criticism from both sides of the atlantic. Netflixs Second Quarter profits more than doubling despite strong growth in the u. S. And abroad. And chi poetly reporting spicy earnings as they stalk to the barista chain, shrugging off higher prices. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Hi, everybody. U. S. Futures are a couple of points higher at the call on our u. S. Markets. We still are a few hours away. But we saw a fairley positive start in europe this morning. Weve held on to some slight gains coming off the back of a slightly negative close. Last night when we spoke, we have nan European Index of some of them. The ftse 100, xetra dax, cac 40 all trading higher by shy of 1 . Here we have the micex higher by shy of 2 today, after closing by lower by around 2. 5 in yesterdays session. Now, netflix share price, well, they rose in after hours trade after the company more than doubled its Second Quarter profit and added more subscribers than anticipated. Julia boorstin has more. Moving higher on better than expected results, adding customers faster than expected, reporting more than 50 million streaming subscriber for the first time. The company says it got a big boost from the popularity on of the Second Season of orange is the new black. Overseas, International Growth was stronger than expected. Looking forward, the streaming company says it expects to add subscribers even faster, projecting the addition of 3. 7 million new subscribers in q3. Most of them coming from overseas. In september, it will launch in france, germany and other european markets with over 60 billion new broadband househo households. David wells did not respond to questions about plans to launch in china. Back over to you. Chipotles Second Quarter profits rose by 26 beating forecasts. The barista chain raised menu prices for offset the costs of beef and avocados. Its up 10 in after hours trade and german trade higher by 9. 5 or so. It has a market cap of 18 billion which is twice that of burger king. This is a barista chain that is taking everyone by storm by the looks of things. Credit suisse posting a 7 million loss. Carolin is in zurich and has been covering this story all morning long. Earlier we were talking about how theyre going to manage to absorb some of these losses and what the future looks like for them. Obviously, its a tough loss to absorb, isnt it . 1. 6 billion, that was a charge for the Second Quarter, resulting in a net loss of around 700 million swiss frank. It is the biggest quarterly loss since the Fourth Quarter of 20308. It is focusing on its Wealth Management business and is further scaling back its fixed income business. So many bank on this and the other side of the bond have done that. But as for the impact on its business from that massive fine and that guilty plea, the impact is imminent. Take a listen. Obviously, there has been some impact. Weve had to work through it. I think we certainly appreciate the support weve seen from our customers, and a lot of the hard work done by our employees, as well. But you can see in the Second Quarter, it was a pretty solid quarter from the point of view. 12 million in net new asset sess one of our stronger Second Quarters in the last few years. It shows a lot of support from customers. You would think with that guilty plea out of the way, you would think now he can finally sleep at night. Do you see any earnings for the huge litigation claims forthcoming . Well, i think with this cross border issue and the fhfh issue we ordered earlier in the year, those are a couple of our existing litigation issues. We are working hard, we dont have any material issues on the fx side. But, you know, were obviously there are a number of issues that we continue to work through. We hope certainly that most of our major issues were hopefully putting behind us. But, you know, obviously, we need to continue to work and the environment is obviously dynamic. Lets get back to the guilty plea and the impact on the business and may still be an impact on the Asset Management side of the business. Credit suisse manages billions of dollars in assets and federally regulated pension plans. In august, well find out whether they can continue to manage those. But that is still one factor of uncertainty here. In terms of the actual numbers, not too bad. Goldman sachs calls it a beat of poor quality because the beat came from the fixed income side of the building. Wealth management margin, meanwhile, unexpectedly. So thats reflected in the share price today. Louisa. Carolin, thank you very much. The National Association of realtors released june existing home sales data at 10 00 a. M. Eastern time. A healthy increase is predicted, although the rise may fall shy of mays jump of 4. 9 , which is the highest gain since 2011. With pending home sales soaring way above expectations in june, most of the economists are seeking actual shares. Sherry liston joins me now from new york. What are you expecting . For sure, were speccing them to go up because the pending home sales were up last month. But there is still two major headwinds for home sales. One is the lack of inventory and the second is the hard time americans are having getting approved for a loan and also because of changes at the federal housing administration. Youll recall the fha had to borrow resources from taxpayers. As a result, people are taking as much as 25 of their mortgage payment towards those fha fees which is putting Home Ownership out of reach for a lot of americans. What are you seeing with regard to the difference between the average buyer and the high end buyer . The strength in both of these particular parts of the market is is it very different . Is one more solid than the other . Sure. Well, you know, thats a great question. Home sales, existing home sales 250,000 are dragging along the bottom. That goes to inventory because thats where those folks are still under water. As many as 40 of americans with a mortgage still dont have enough equity to sell their homes if they wanted to sell their homes. The other thing were seeing is something we now call rate lock in where folks who did refinance, rates as low as 3. 5 , are now hesitant to sell because they dont want to lose those rates. Again, the new construction is a problem. We have only around 600,000 new homes being built a year, which just isnt enough to keep up with demand. And the reason for that goes back to the problems folks have getting loans. Builders just dont want to build when they know people arent going to be able to get loan toes buy their products. What do you think is going the happen to the u. S. Housing market once rates start to creep up by a bit . Were still quite a ways off from the indications that were getting. Are we anywhere close to being ready for this new scenario . These a great question, louis louisa. Here is the thing. That fool, the fed tool of being able to adjust Interest Rates has been used in the past to stimulate the economy. The problem now is that the rates have been so low for so long that younger americans in particular consider any rate over 5 to be too high. Those folks that have been surveyed say they will reconsider majoring major pure casss if rates are above 5 . So that tool that was used to stimulate the economy may actually stall the economy again. Sherry, good to see you. Thank you very much for being with us, sherry olefson director of the Carnegie Group and director of the book foreclosure nation. Up next, bill ackman steps up his war against herbalife. He has long claimed theyre running a pyramid scheme. A bit more on that later on. Having the cloud allows us to rapid prototype a lot of ideas. Being able to pay as we go was crucial for a start up. Having to fork out a lot of money up front was risky. You can launch a feature really quick, and if the feature doesnt work, we havent lost anything and we can have something up and running in days. And this would not be possible without the cloud. We are now supporting over 25 million users each month. Ideas can be tried and tried again on the ibm cloud. The ibm cloud is the cloud for business. Hi, everybody. Welcome back to Worldwide Exchange. European Foreign Ministers are gathering in brussels to discuss the next move with russia. Netflix adding 1. 7 Million Subscriber as earnings more than double. And chipotle is sizzling with better than expected samestore sales. Listen, it really is all about geopolitics. The eu Foreign Ministers are meeting in brussels today with fresh sanctions on russia on the table. The lithuanian and the latvian Foreign Ministers both tell cnbc theyre seeking a arms embargo on russia. The foreign secretary says he clear signal needs to be sent to russia and that the eu needs to go further. T64 in downtsk yesterday. Modernized 64 on the stroets of donetsk. You dont buy them t local grocery store. Theyre coming from increasing numbers across the border in spite of our commitment, in spite of our demands. And that was the Swedish Foreign minister there saying he is now questioning how essentially modern russian tanks have arrived in Eastern Ukraine. Lets talk to jim maceda who is in moscow and has been following the developments very closely. Jim, were kind of trying to figure out what would come out of today, whats the next move both for eu leaders and whats the next move for putin. What can he do, also, without losing faith as a political leader . Hi, louisa. Thats right. The pressure on putin is clearly mounting, even though its unclear to me what has accomplished today at the eu summit. I think if theyre trying to speed up those sanctions, those that were agreed to already about a week ago. But i dont see anything on the horizon yet that would smack of an exponential leap in terms of the strength, the sectors, the breadth of those sanctions. But for putin, just the potential for sanctions is going to put pressure on him. You have the growing strength of a u. S. Led intelligence case against putin. The obama administration, putin faces a dilemma. If he decides to double down on ukraine and ignore the International Community and pumping up those rebels, he might be facing tough sanctions, an arms embargo, as well. Certainly this country could become more isolated and like a pariah state. On the other hand, if he gives into international pressure, cuts ties with the rebels, hes going to lose faith, look extremely weak and deit intoed until the eyes of ethnic russians throughout this region, especially in crimea and even here at home. Typically, putin now seems to be looking for a middle way, pushing for a ceasefire to make some breathing room, accommodating the rest, as well. We saw yesterday that the first half we could probably urge the rebels to cooperate. That might help, but the bottom line is, putin watchers are telling us putin just cant cut those ties with the rebels. Its not in his dna and that might be his undoing. Jim, thank you very much for that. Elsewhere, Billionaire Hedge Fund manager bill ackman is promising to expose major fraud at herbalife in a presentation he is calling the most important of his career. Seem seema mody is at headquarters. The long running battle between bill ackman and herbalife rages on. Ackman says he plans to expose incredible fraud. Hes making a presentation in new york at 9 15 a. M. Eastern time. So about less than four hours from now. Ackman says hell unveil the latest investigation intoer herbalife. Ackman appeared on cnbcs first money halftime show. He says he has internal documents from employee toes make his case. The company is clearly panicking. And what ive heard from people in the media world is they are quote unquote freak. The fraud is in the way they if you fundamentally operate. Ackman has conducted his high Profile Campaign against herbalife since december 2012 when he revealed a more than 1 billion short against the stock. He has long alleged the company is running a pyramid scheme through the way it pays its independent network of salespeople. Ackmans claims prompted investigations by the s. E. C. , federal trade commission, fbi and two state attorneys general. Herbalife has responded monday on its twitter account saying its confident in the integrity of its marketing model. Herbalife stock 11 on monday and is down about 14 since ackman anoins ed. So specter ba life to be a stock in focus on wall street today. Lisa. Seema, good seeing you. Coming up next, apple posting Third Quarter numbers. Later will investors have the appetite . Well preview the tech giants earnings in just a couple of minutes. Hi, everybody. Welcome back. Ma ris sa mayer is pushing yahoo further into mobile. The company is buying flurry for more than 200 million. It helps marketers figure out which ads resinate most with iphones and android users. Now, apple has reportedly asked suppliers to produce up to 80 million large screen iphones by the enof the year. The iphone 6 is expected to come with a 4. 7 or 5. 5 inch screen. Appearing releases Third Quarter results after the closing bell today. Lets talk about what we can expect. Scott kessler, senior Equity Analyst at s p capital iq. Scott, good to see you. What are your specations for what well hear from apple . Well, louisa, you laid out the expectation toes large extent. Our forecasts for Quarterly Earnings is 1. 18. Like the street, we also see around 38 billion in revenues. And to be frank, while theres no question that folks are very interested in what apple delivers for the june quarter, the reality is that people are buying and holding the stock at this point because theyre excited about what they see happening in the back half of this calendar year. Which is what . Well, obviously, you alluded to the wall street journal article indicating that apple is preparing larger screen size iphone 6s. In addition to that, i think a lot of folks are very excited about the prospects for an iwatch. Then you have others indicating that some type of payments offering is pending. Then, of course, i think people are very interested to hear about what happens once apple completes the abscission of beats music. So i think theres a lot of excitement around just whats in the pipeline, whats going to become available really before this Holiday Shopping season. To be frank, we think a lot of that good news and expectations are already in this stock. And if there is any level of disappointment, we could see a pullback because the stock has appreciated. We think more than 15 yeartodate. Importantly, over 50 over the last year. Notably outperforming major indices. Given, though, the hopes for the second half of the year, will you be buying apple now . So the short answer is no. We have a hold opinion on the stock. Truth be told, we were recommending shares of apple for about five years as a strong buy or a buy up until the end of may. Basically, our view at this point is that the expectations have gotten ahead of reality at this stage. Scott, good seeing you. Have a great day. Well talk soon again. Thats it for todays show. Ill see you on closing bell a bit later on this afternoon. But thank you for watching Worldwide Exchange and well leave but a shot of the u. S. Futures. See you later. Good morning and welcome to squawk box. Quarterly reports are all over the place today. Maybe the heaviest so far with 20 of the dow. Theres six dow components here. I came up with that. 20 of the dow set to post Quarterly Results before the opening bell. So earnings to the economy, a key read on inflation. Also set to hit the tape this morning, in geopolitical news continuing, so much happening. European leaders are meeting in brussels to discuss further sanctions in brussels. Its tuesday, july 22nd, 2014. Summer is flying by. Back to school commercials already. Thats rough. Squawk box begins right now. Good morning. Welcome to squawk box right here on cnbc. Im Andrew Ross Sorkin along with joe kernen who is just getting into the picture there for a second. Michelle Caruso Cabrera is joining us. Becky is enjoying some time off today. Earnings season hitting feefer pitch today. Were going to hear from a lot of people starting with dupont, then we have verizon, travelers, cocacola, other earnings include lockheed martin, kim ler by clark, hardly david son and comcast. Were going to hear from apple, microsoft and Electronic Arts after the bell. Thats whats going on in