Transcripts For CNBC Worldwide Exchange 20150513

Tourism group says profit targets are on track and take steps to simplify its business. The shipping giant trades lower as the volatile crude price weighs on the business. This despite posting a First Quarter profit beat. Welcome to the show. Im seema mody. Italys gdp number just growth beating expectations of 0. 2 . This following the pick up in frances growth. Better than expected gdp numbers out of italy up quarter over quarter. Seems like aided by oil prices and weaker currency helping italys growth. The euro very close to session highs. 112 against the u. S. Dollar. Lets recap the other data. France surprised the market by posting its best quarterly performance. Gdp at 0. 6 ahead of expectations. Germany missed forecasts printing growth of just 0. 3 trade. That was a big drop on growth in the First Quarter according to the data office. Now the external numbers for germany have always been a little weak. Capital orders were a little bit disappointing but consumption has been quite strong. I wonder how sustainable these data points are given that in the Second Quarter weve seen the rebound in the oil price and weve seen the rebound in the euro as well. Thats the big question. Is this growth sustainable for a long period and is growth impacting it. Its of course been one of the spots for this bond market sell off is whether or not this increases the result for mario draghi to keep going or not. Germany just behind france. Theyre not knockouts and not blowouts. Is that going to be enough to pull back . Lets get to other data points. We have the report from the International Energy agency. We want to bring you highlights here. Thats unchanged. Thats quite interesting after yesterday we saw in the opec and in the eia report that demand was revised up and thats why in part we saw the big rally in oil price. Also because of the weaker dollar. Some other highlights. Despite slowing u. S. Output Global Oil Supply growth at a steep 3. 2 Million Barrels per day year on year in april and they note once again oil prices did rally in april and early may despite persistently high Global Supply and continued stock builds. We had a couple out over the last couple of months or weeks saying this rally is premature and not going to last. How are the markets looking . Lets have a look at the sea of green behind me. Quite strong markets that mask the volatility weve had so far this week and over the last few weeks to be sure but today bouncing back as you can see up the best part of 1 . Really throughout the day. Yes we had some gdp data and cpi data all of which in line. Probably beat expectations. This rally isnt fundamentally based on that. Its a little bit of a rebound following what weve had but also because yields are moving down today and not up for once. Thats helped equity market in general. Thats spread across pretty broadly. Continental europe doing slightly better than the u. K. As you can see germany, france all up over 1 . The u. K. Just shy of 1 . Lets look a little bit more at some of the individual movers today. Danish shipping and oil and gas company has warned of the impact of low oil prices across the business as it continues to strip out cost. Revenue fell 1. 2 million. The headline First Quarter net profit was higher than expected after the group sold its shares in deutsche bank. Mediaset returned to profit in the First Quarter of 2015 after last months euro loss. But the company disappointed by predicting flat ad sales in the home market for the Second Quarter. Up quite significantly today. Down over 5 . Lets look at bonds. As i said at the top, weve seen a little bit of positivity in equity markets today because were seeing a little bit less volatility and a little bit less of a spike today in the yield in the bond market. Its been the european bond market that sparked the global risk off sentiment weve seen in recent weeks. The ten year german yield elevated levels. The german ten year the u. S. Ten year at 2. 24 . Yesterday it did touch 2. 37 . That was a six month high since early november but settled by the end of yesterdays trade and were looking at 2. 24 . Bank of england Inflation Report today. Important to watch at the moment the ten year yield just back before 2 . Well be listening later in the show. The u. S. Dollar has been weak in general over the last few weeks and months relative to where it was at the start of the year. Its up about. 3 but in similar fashion a little bit more calmness today in markets. April output and retail sales missed expectations. Lets go out to sri to see what that means for asian markets. When you do see the mack kro deterioration across the indicators the market starts to front run the idea of more stimulus and that hasnt changed but whats affected sentiment is the prospect of more ipo activity. That could bleed some of the volume and liquidity away from the main boards. Thats one of the reasons the shanghai composite is on the offense. You cant take away the fact that the april numbers, investment retail sales and industrial output all coming in below forecast so it does build the case for more stimulus. We were talking to them early on today and they were telling us expect to see another cut in june. Another cut in a main lending rate in july to try to consolidate Economic Growth above 7 . Elsewhere its quite interesting. Fairly resilient day for equities despite the fact yesterday in your markets we saw that renewed bout in the bond markets and spreading through and infecting inequities as well. We seem to be impervious to that. Up by. 7 . So investors back in the market buying up some of those stocks and also the Indian Markets underperforming as of late. It coming back by about 1 . 8,203 is where were standing. Back to you now in london. Thank you for that. Lets get context on the gdp data we had out this morning. Joining us is the chief european economist for morgan stanley. Thank you for joining us. Good numbers out of france and italy also beating expectations but germany that was a little bit of a disappointment. Your reaction . Yeah i think the first thing to note is really that for the euro area as a whole the forecasts are on track. We expect a 0. 4 print to be released at 10 00. Thats what they have put in the staff projections. Previously we thought there would be upside risk to that number and now the risks are probably balanced. So on the whole it comes out in the wash but when we look at the individual countries we need to dive deeply into the details. When looking at the italian gdp number coming in at the highest level since the Second Quarter in 2011 levels. Is this aiding the economy or do you think its the structural format play here . Its a combination of the factors. Its on the italian economy. We think thats the next turn around story thats happening right now. And that is driven by cyclical factors. The weak currency but also more expansionary physical policy fallen oil prices and of course the impact of Monetary Policy. To what extent is the recent rise weve seen in european yields undo the work that quantitative easing was starting to achieve . I dont think thats the major factor. That was always to be expected. On the back of qe based on the experience in the u. S. And the u. K. That bond yields would at some point start to rise. For the ecb this is very much as expected. The violence of the move obviously is a concern. If anything what slightly could start to raise some concern is the fact that the euro is no longer weakening. What about oil prices too . You know oil prices to be honest thats one reason you might be thinking the ecb could revise up its near term inflation projections at the june meeting but, you know they have fallen much further than we expected. Theyre starting to normalize again. I wouldnt read too much into that but the currency was clearly one transmission channel that the ecb wanted to use in the qe program and to that extent the weakness we have seen in the u. S. Data recently and push back from the Federal Reserve against the stronger u. S. Dollar is something that could potentially cause a rethink at the ecb. Yeah all the qe inspired losses in the euro dollar have now been undone. Thank you for your time. Chief european economist at morgan stanley. All right. Coming up on worldwide exchange. Would news junkies like the instant article feature . We discuss. Plus indian Prime Minister modi heads to china for the First Official visit. We ask whats in store for the crucial trip nearly one year into modis term. And potato deemployee ma sy. Youre watching worldwide exchange. New york state is reinventing how we do business by leading the way on tax cuts. We cut the rates on personal income taxes. We enacted the lowest Corporate Tax rate since 1968. We eliminated the income tax on manufacturers altogether. With startupny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. All to grow our economy and create jobs. See how new york can give your business the opportunity to grow at ny. Gov business we showed these kids some items from a nearby store, whoa but they didnt know they were all tobacco products. Ooh this is cool. It smells like gum. Yummy. This smells like strawberry. Ooh, are these mints . With colorful packaging and fruit and candy flavors that kids love, who do you think Tobacco Companies are targeting . Do we get to keep any . Welcome back. An amtrak train from washington to new york with 240 people on board derailed in philadelphia tuesday night. At least five people are dead and several more are injured. Eyewitnesses say the train that runned through the heavily travelled northeast corridor was going through a turn when it started to shake before coming to a sudden stop. Philadelphias mayor calls the scene horrific. It is an absolute disastrous mess. Never seen anything like this in my life and most personnel will say that as well. The cause of the accident is unknown but amtrak and the National Transportation safety board are investigating. Amtrak says there will be no Service Today between philadelphia and new york and modified Service Throughout the rest of the northeast corridor. No quote, major break through with russia. But john kerry talked about the merit of working together after 8 hours of talk with vladimir putin. In an effort to repair relations with moscow the two nations could make progress but held firm on ukraine. I reiterated americas view that the minsk agreements are, absolutely, in our judgment by far the best path the principle path to peace and those agreements must be fully implemented. The sooner the better. Jeff they managed 8 hours together but did they make any actual progress . Thats the point, isnt it . Substantial talks but no substantive break through. But i think the news really here wilfred is the fact of the talks themselves because this is the first time kerry has been here in two years and they were able to hold this dialogue on ukraine, syria, iran in a fairly diplomatic way. The language was positive. There wasnt any of the old cold war rhetoric and it seemed generally civilized engagement. So perhaps on the face of it it does mark a step forward in relations between washington and moscow. The other slightly amusing aside to it i suppose is the gift giving that took place here as well. Maybe we can draw something from that. Mr. Kerry was presented with a basket of tomatoes and potatoes. By mr. Lavrov and a tshirt about the victory Day Celebrations or commemorations for his part john kerry gave a briefcase to lavrov. When it comes to what was disclosed publicly, as you say, no significant break throughs but i think possibly more interesting developments privately given that john kerry has come away from this meeting and as he goes into two days of nato discussions has talked about making progress on iran which would have been one of the topics that was discussed fully here and whether the russians are on side when it comes to the u. S. Negotiations over denuclearization. Greece managed to repay its loan payment on time however they put a tap on an emergency account to secure the cash for the payment. They took 650 Million Euros from the emergency account and made up the remaining from the own cash reserves. Theyre due to pay 1 billion euros in Public Sector salaries. The ecb raised it to 80 billion euros in total. Julia joins us to talk all things greece. There getting creative in finding cash in certain municipalities. How long can they keep on doing that . This is a key question. When youre starting to look at them taking them down all countries have got this reserve Fund Rainy Day fund if they need it. Theyre scraping the bottom of the barrel. Various estimates suggest they can get to the end of may. Perhaps to the early stages of june. They have to make a further 300 million euro payment on the 12th of june. Another 330 Million Euros. The suggestion from the greeks yesterday was that by the end of may they have another huge chunk of cash. 1. 5 to 2 billion euros to pay in Public Sector salaries wages, pension payments and at some point they have to choose just who they pay. To what extent have they made any structural progress with this . Although this payment has been made and we have another couple of weeks breathing space, is this just pushing money around . Its moving cash balances from one pot to another . Theyre not generating the funds to allow them to come out for the longterm. This is exactly what were doing. Were expecting very little growth from greece this year. If we go back to novemberdecember time were anticipating 2. 5 growth. They are not collecting the revenues. They havent been since the election. Tax revenues are also a problem. They were hoping for relief from the government. Its a double whammy and they have taken some money from the municipalities but some of the mayors said were not going to give you the cash until you turn around and say we have a real problem. Even some of the mayors said at that point well hand over our salaries because we understand theres a problem. Theres a lot of pressure on this government to you know give out the goods but not to back down on their red lines which theyre still refusing to do but we have two weeks left. The liquidity situation here is critical and this points to that too. Julia, thank you for now. And the popularity of greeces Left Wing Party looks to be losing steam amid on going debt talks. This after the u. K. Independence party secured one seat at last weeks general election. So has the tide peaked . Head to cnbc. Com for the full story on that. Facebook is launching a knew feature today called instant article. Its partnering with several news publishers to let them post articles directly to facebooks mobile app. They can either sell or imbed ads in the articles and deep the revenue or let facebook sell ads. Theyll also let them collect data about the people reading the articles and this is a fascinating move by facebook. Entering the publishing space or allowing them to upload continent on book welcoming the one stop shop for con siermssumersconsumers. You know guys what i find really frustrate as good when you click on a news article on social media it takes a couple of seconds. Im not talking about one or two seconds, sometimes ten seconds to load. That makes that experience very tiring. What are you trying to load . Just a simple article. Apparently under this deal the loading of articles will be ten times faster and that way for the consumer it will be a lot better. For me, reading news on twitter im not on facebook but its a similar experience. Someone will tweet a comment and youll click on the article and it will be firewalled. For us here its the financial times, those one which is are firewalled rather than the telegraph or bbc. Its that disconnect where you can have free access to the person publizing the article and hidden behind sit a firewall. But overall the question we want to hear on this is how do you like to consume your news in this digital age . Do you get it straight from the publishers site or through your pages. Get in touch with us and all the twitter handles coming up on the screen now but for me if you do have a firewall im more than happy to pay up for good content rather than the freebies. For me theres also a psychological view that the quality of the news once you paid for it is better. It makes you want to stick to that even though you paid for it. As more publishers offer their content for free that model is quickly changing. This move to launch instant articles, big attack on twitter. Theyre trying so hard to also be the one platform that consumers use to consume news and among other articles. Watch that battle heating up i should say between the two. But also against google. Facebook has already overtaken google apps as the biggest referrer of news items. So essentially with this deal theyre building on to their dominance in the referral of news pace space. A lot of it is through mobile. One further point on the subscription point. I get that its moving and were moving toward free consumption but i wish they would do two options on twitter. It drive mess mad when its not a tweet from someone you choose to follow. Id pay a subscription free for zero ads. They should offer both models. Some people should pay and then other people not willing to pay that. Hopefully theyre listening to you. They should create that option even if its just for me. Id be willing to pay up to 10 a month. Wow. Good business model. I like how you say adverts. Advertisements. Tell us how much you would pay to have zero ads on twitter, facebook and the like. Still to come on the show just an hour to go before the bank of England Governor Mark carney delivers the quarterly Inflation Report. We get the latest u. K. Unemployment figures straight after this break. Were back in two minutes. Fears of further crack downs from regulators also weighing on sentiment. Qe earnings the bright spot on the london market as the Worlds Largest Tourism Group says theyre on track and takes step to simplify the business. A shipping giant trades lower as the volatile crude price weighs on the business. This despite posting a First Quarter profit beat. Lets have a quick look at where your dollar is trading right now. We got a quick look out of germany. Only 0. 3 quarter over quarter. We recovered quite a bit since then. Changing hands at 11223. Just a tad higher on the day and we have u. K. Data. We have indeed jobless data coming out and we have unemployment at 5. 5 we have seen sterling risen off the back of this. 15713. Its up about. 31 . The rate was forecast at 2. 2 and bonuses that has come in at 2. 2 . Lets bring in germany. Of course the u. K. Market versus been focused quite significantly on the election in recent weeks and months but the fact is going to drive markets in the shortterm. Is mr. Carney going to be focused more on the Employment Data we just had in line with expectations or the Inflation Report well get shortly . Thats a good question. I think the last 18 months he came in to be governor he was first of all focused on the unEmployment Data but thats been a lot better than expected to be and he was hoping originally there will be a long delay before he needed to raise Interest Rates. As you look forward now then inflation becomes more important and in particular Wage Inflation and thats the driver toward wanting to raise rates at some point in the future but theyre still some way from that. Weve seen this pick up in yields in the u. K. Bond market. Thats more because of contagion from the rest of europe and the rest of the world. Is that move justified given where we are . In the shortterm is there an argument for traders to be buying these bonds again . Im not a trader but if i was a trader id be tempted to buy some i think. But given the likely levels of gdp growth and inflation in the economy we should expect them to normalize toward 3. 5 or 4 over some long period of time but i think youre right. In the very shortterm its been very sharp moves in bond yields and if i was a trader i might be tempted. Before we continue the discussion about the u. K. First quarter gdp grew at 4. 4 on the year. I want to come back to earnings and thats a key data point for the boe in terms of the timing of the first rate hike. Were seeing average earnings up 2. 2 but we have been grappling with this product activity puzzle in the u. K. Can it rise unless we see movement on the front. They shouldnt rise sustainably. If they do its because companies are paying their staff more and feel they have to pay their staff more. Thats going to hit corporate profit margins. So i think product activity growth has been negative the last few quarters. Its a real issue in the u. K. Economy and you cannot sustainably grow wages without product activity growth in any economy. Germany, youre going to stick around for a little bit. I want to show you what european markets are doing. We are higher today bouncing back from the sharp losses in yesterdays trading session. That was a result of the spike we saw in bond yields. Ftse 100 higher by 0. 6 that is. Xetra dax higher by 0. 8. Cac 40 gaining 1. 3 . How are we looking in term of the individual stocks . Lets focus in some of the individual movers today. Thats up 1. 83 . The u. K. Travel Company Reported a rise in Second Quarter profits saying its confident on the rest of the year. Theyre looking to deliver Profit Growth of 10 to 15 in 2015. Sab miller is up 1. 87 . It beat on full year profit of more than 6. 3 million. Sab warned it will be hit by currency volatility going forward. Speaking to cnbc earlier the ceo said the trading environment remains challenging. Developed markets we see more fragility in the economy. Europe australia, United States, its under pressure so were having to expand as is the industry quite rapidly into a variety and move more into premium. We have over 70 of our business in the developing world. So africa china, latin america, the volume is holding up as of the economy. Weve seen growth rates well into the mid Single Digits in those regions. Now, bouygues shares struggling off a net loss in the First Quarter. Also warning that 2015 will be a difficult year but as we said its up 2. 5 . Vivendi is up 3. 1 after reporting First Quarter earnings that beat estimates. Its also offering to buyout the rest of the french unit of the broadcasting arm. Lets get out to stefan with more on that story. Lets pick up with them unprofitable in the First Quarter. The First Quarter was impacted by sales in the construction sector because of the weak Economic Activity in france and it was also impacted by the price war in the French Telecom sector. Talking about this unique concern, its a stand alone strategy after years of speculation. It was up 2. 5 . It is the top gainer after the Company Posted a 24 rise driven by its media, of its universal music business which benefitted from the weaker euro against the dollar. Also concerned with full year outlook. It plans to buy the group that it doesnt own yet. They explained it was a good strategy to use the cash accumulated after the disposal in france brazil. Back to you. Thank you very much. Nice to see you. Swedish medical technology group, elekta among the worst performer today after delivering a profit warning citing weakness in the u. S. The group also announced that its ceo would step down. Retail investors are expecting average returns of 12 over the next year. Thats according to the latest Global Investment survey from schroders. We also asked him for his take on what the survey said about the direction for markets. Overall, theyre going to increase by 8. 5 . The size of a portfolio. So additional capital. That is consistent with our experience in the last decade where capital formations have been increasing by 8 . Its followed by facts. Its more essential sentiment of what they want or aspire to do and if you go through the report there is a very significant disconnect between their expectational return and attitude to risk. What the results could mean. Head online to cnbc. Com. Lets have a great look at what bonds were doing today. Theyre a little bit more subdued but significantly elevated from three or four weeks ago. The ten year note in the u. S. Hit 2. 37 yesterday before settling back at 2. 22 today. Ten year in germany back below 0. 7. Lets get back to germany who is director of u. K. Manager research. We touched on it briefly. Does that undo the work qe was starting to do in the rest of europe or not . To a small extent thats true. It was extraordinary. That really tells you really get an extreme level so i think we rebound from an extreme. The longterm qe the ecb is going to be there for another 18 months or so so i would expect that continued buying pressure in european bonds and probably theyre going to stay at low yields and maybe lower than they are today for the next year or so. But deflation or disinflation was expected to be around for a long time but the picture is slowly changing given the sharp reversal were seeing in oil prices. Is that contributing to the sell off in the bond market . Im sure because one of the reasons the bond yields did so well last year the oil prices was falling and its bouncing back. That feeds upwardly to a small extent but its all still small numbers. What kind of move are you expecting in inflation now that oil prices are slowly coming back . Especially because were expecting the Inflation Report. It lags a bit. In the next few months it will be near zero in the uk. And it will gradually pick up and this Time Next Year it will be 1. 5 . Do you think by next year it can reach the central bank target of 2 on inflation. It could. Do you buy on the dip . Well it depends how long an investor you are. Youre going to lose money in real terms. How do you know that . Some people say dont fight the ecb. That trade might not be over just yet. If you have a ten year perspective, but if you are a one year perspective it may be a trading gain that you can make and pocket that. Do you think theres enough liquidity to send the u. S. Ten year yield up to 3 even . Theres enough liquidity in the market. Its a real issue and theres much more volatility in bond markets than were used to. Thats a function of a lack of liquidity in the bond markets absolutely. The director of u. K. Manager research at morningstar. The recent rally has left many investors scratching their head. Its not the time to buy is the message from some analysts. Head to cnbc. Com for the full story. An amtrak train from washington new york with 240 people on board derailed in philadelphia tuesday night. At least five people are dead and several more injured. Eyewitnesses say the train which runs through the heavily travelled northeast corridor was going into a turn when coming to a sudden stop. Several cars flipped over. Philadelphias mayor called the scene horrific. It is an absolute disastrous mess. Ive never seen anything like this in my life and most personnel will say that as well. Crews have been working ever since then to comb through the wreckage trying to find any potential victims that they can. As you mentioned, five people are confirmed dead. Six others are in Critical Condition. Theres 240 people on board including five crew members. 65 of the people have been treated in local hospitals. Most of the injuries are bruises, broken bones, concussions, things of that nature. They had to stop a short time ago in philadelphia and the train was going down the tracks. It appeared that the train was going into a curve. Everything started to shake and thats when luggage and people started flying. Everything came to an abrupt stop according to the people that were on board the train and thats when they all tried to get out and people kicking out windows and trying to pry open doors. Helping anybody conscious to get out of the train. Within moments more than 200 First Responders were out here on the scene. Police officers were taking people to the hospital in their police cars not even waiting for ambulances to come get them. A team from Homeland Security did come out to try to see if there was any connection to terrorism. At this point thats not believed to be the case that theres any terrorism ties to this. Of course that will be part of a larger investigation. Right now theyre starting to look at the idea that perhaps train was going too fast but the National Transportation safety board will be coming out here later today to lead this investigation. Live in philadelphia, well send it back to you. Chris thank you so much. A devastating scene and were still trying to get all the details. And still to come on the show modi is off for his First Official visit to china. We ask whats in store for the crucial trip one year into modis term. Stick around. India sensex stabilize after they deferred legislation on land and tax reform designed to boost investment. The delay strikes a blow to Prime Minister modi that completes his first year in office this month. Meanwhile, modi is set to make his First Official visit to china on thursday where hes expected to discuss greater economic ties with top business leaders. What can we expect . Lets bring in senior global economist. A pleasure to have you on worldwide exchange. For india theres no other bilateral relationship more complex or challenging than the one it has with china. What are you expecting between the two leaders tomorrow when they meet . Clearly there will be further discussion about how ties can be strengthened. What more can be done to ensure that the trade in investment is there. And modis been trying to go abroad and ensure International Investors that india is open for business and they need to invest more and i think hell be trying to seek a little bit more of that even from china. We talk about modi approaching his one Year Anniversary as Prime Minister. He was promising so much in terms of reform and growth and while weve seen some progress on that front many investors i speak to say its still not enough. What are your thoughts there . We have to be cog anyaware of the fact that markets were expecting too much. The new government doesnt have a majority in the upper house of parliament. Its a democracy. You have to get the laws passed through both houses. While there have been powerful reforms which are more silent the Big Bank Reforms a lot of International Reforms theyre expecting have yet to come through. If you look at the ease of doing business easing the rules for fdi investment. If you look at whats happening in terms of getting these, they have all been eased. You have improvements in fiscal balances by not increasing the minimal support prices and even the Government Support for the new Monetary Policy frame work has been very crucial. Its positive. Of course the big, big reforms are still to come and youre right that theyre maybe getting a little bit impatient. I think when you talk to indian clients theyre still looking for these reforms to come through for growth to pick up and really the name of the game now is patience and trying to take the entire progress together to get the reforms passed. Weve seen the dollar come off the rampant surge it was on before that but at the same time we have a risk off sentiment globally. Can you weigh those two factors for us . Should we be in markets like india at the moment or are they going to face a tough period in face of risk off sentiment . Weve done a lot of work on this. This is clearly something that you know is quite key for how the Global Economy itself performs. Weve had the taper tantrum of may 2013 which was particularly bad for five or six emerging market economies. This time around the impact should be much more muted. If you look at countries such as india they are not as wonderful as they were before. You have an improved position and more Monetary Policy more credible and of course you have certain other improvements coming through which we also discussed in terms of the government and its initiatives. There are a few companies which will face a little bit more of volatility. If you do see either the u. S. Dollar strengthening too much or if the u. S. Yields go up too sharply or if you start seeing a very sharp increase in the fed rate. And indonesia and turkey in particular stand out as countries that are wonderable and theyll come through the Exchange Rate and that will take the main brunt off any impact of these volatilities but a country like korea on the other hand would actually benefit and would actually strengthen. I want to take you back to india very briefly. Hsbc downgrading india stocks from underweight to overweight today because of fading hopes of a rate cut in india. Inflation has come down quite a bit. Do you think the central bank will cut in june . We are expecting further monetary easing to come through from the indian central bank. Thats in line with the wider asian economy. If you look at china over the weekend, you had further, you know indications of other Central Banks wanting it. So were looking for india, indonesia, and vietnam to cut Monetary Policy rates further. Thank you for joining us. Much appreciated. The senior global economist at standarded charter. Now the u. S. Senate democrats dealt president obama a block for the fast track trade bill. This would allow lawmakers to either approve or object but got amend. President obama met with a group of Senate Democrats late tuesday to discuss how to move things forward. John kerry is hopeful of successful negotiations on the iran nuclear deal. Speaking in turkey he also said cooperation between the six nation gulf council and the u. S. Is crucial to fighting terrorism. This as four of the six monarchs declined their invitations to attend president obamas summit. Lets get more insight on this with hadley joining us on set. The problem is the leaders obama will be speaking to is a whole new set of younger leaders. Its a bit of a general shift. Thats true. Theyll be attending the gcc summit. Quite frankly what we know already is the United States isnt going to be presenting anything new to the leaders meeting in camp david and thats one of the reasons they declined the invitation. If theyre saying its not a snub but you cant look at it in any other way and quite frankly all the flutter in washington yesterday not just from the Statement Department but white house as well demonstrated how they said this isnt a big problem for us but it clearly is. We already know the interior minister, now the crowned prince, he is very familiar in u. S. Circles. Hes been fighting terror for ten years. He was the guy right after 911 going after ristterrorists in saudi arabia. Hes also in charge of the Rehabilitation Program for terrorists. They do have the own home grown terror problem and its something they continue to deal with. This snub comes as john kerry just managed with vladimir putin. Is there a sense that World Leaders prefer talking to mr. Kerry than mr. Obama . Se see morethey see more of him. Hes here and there. Hes never in washington but what is he getting done . We understand from jeffs reporting in moscow he has been key to talk about terror with vladimir putin. Its an easy topic for both of them because its something that they both face and its a problem for both countries but in terms of the way forward in ukraine, nobody wants to touch that. So what are the Foreign Policy wins for mr. Kerry . Thats open to debate. Thank you for joining us as ever. Lets get back to markets and have a look at bond yields. We have just come off the spike in recent weeks. Yesterday we were looking at 10. 37. And above 0. 7 in germany. Both have come off of the peaks. 2. 326. Were also seeing a normalization. The dax also seeing steep losses yesterday to the tune of 1. 7 today. Bouncing back up by 0. 7 . All eyes on the data points we got out today. Is europe growing at the expense for the u. S. . Thats something well discuss. After stocks did move lower yesterday, just modestly to the down side the dow is indicating a higher open by around 75 points. Yields coming off the highs as well. The tech heavy nasdaq is at 5,000. Right now up 26 points in premarket trade. Remember to get in touch with us on our viewer exchange. Tell us how you like to consume your news in the digital age . Subscription models or advertising instead and get it for free . Join the conversation. Lot of discussion on twitter coming through and well bring you all of that after this short break. Email us worldwide cnbc. Com or on twitter. Here are your headlines from around the world. At least five people dead and several injured after an amtrak train derails near philadelphia. Were live on the scene for the latest. European markets bounce back. This is german Economic Growth. Euro zone gdp data due any second. Decision day for dupont as the battle comes to a head at the companys annual meeting. Facebook launches a new app partnering with big named publishers to bring a new stream of adds and articles to its mobile service. We have euro zone gdp numbers slightly below expectations. We were looking for 0. 5 on the quarter and 1. 1 on the year. So the number is not shockingly bad but it is just a tad below forecasts. Lets have a look at euro dollar. Its close to 11224 but still higher by 0. 1 on the day. Not a huge reaction on the euro dollar rate but some of the regions have quite a lot of divergence. France outperforming germany and the u. K. With its fastest growth in two years also this is still fastest growth since Second Quarter of 2014. We have the lower euro dollar Exchange Rate in the First Quarter and we had the effect of lower rates. Ed aed by oil prices. Wearer currencies. Helping manufacturing. When you look at the individual gdp numbers for country, germany not good. France beating expectations. Italy maybe labor market reform being put to use but also the reason were seeing gdp come in better than expected overall is qe. Were seeing the benefits of it. Lets bring in one of the other individual countries. Greeces data also included in the latest flashes plus 0. 3 year on year thats compared to 1. 3 . 0. 4 compared to minus 0. 3 in q4. Its improved slightly on a quarterly perspective but worsened on an annual perspective. Giving us the time frame of where they stand in terms of their economy and what theyre up to at the moment. Its interesting to see how markets are responding to the variety of data over the next couple of days because this gdp number is slightly below expectations at 24 but still better than what were seeing in the u. S. Or u. K. But is good news bad news for the markets because it tells us that Mario Draghis quantitative easing plan will end sooner than expected. To me it stems from the bubble bursting relating to the latest bout of quantitative easing weve seen the u. S. Dollar come back during a period of risk off sentiment now that that type of trade is unwound the u. S. Dollar is included in it and thats highlighting that its off the back of too much loose policy and assets relating to that. But youre talking about this being good for the market im not sure that holds in the euro zone. Yes theres a risk that data is better than expected and the ecb will pull back earlier than expected but is that reflected in the markets. Why were european markets rallying. Still the case now . It was a bet on quantitative easing providing the boost to the economy. Its all qe related because weve seen bonds and stocks correlated in the same way in recent weeks. That shouldnt be the case. If equities go up youll see bonds fall off. Its a question of quantitative easing as well as Structural Reforms or is it monetary easing. Well have to move on an amtrak train from washington to new york with more than 240 people on board derailed in philadelphia tuesday night. Five people are dead and several more injured. Eyewitnesses say the train that runs through the heavily travelled northeast corridor was going through the turn when it started to shake before coming to a sudden stop. Several cars flipped over. Philadelphias mayor called the scene horrific. It is an absolute disasterous mess. Never seen anything like this in my life. Most personnel will say that as well. Were joined live from philadelphia with the latest on the amtrak Train Derailment in about ten minutes time. Lets take a look at futures. Stocks ending lower in yesterdays trade. Similar to what we saw on monday. Today perhaps markets will come back. This is just the implied open. Well see what happens at 9 30 a. M. When wall street opens for trade. Bonds really stealing the spotlight. That has been triggering a lot of market turmoil given the volatility in the bond market. Yields inching to a six month high when looking at the ten year treasury note but its come off the high of the day. 2. 24 . Thats the ten year treasury yield. This was seen as a leading indicator for the u. S. Bond market. Also higher at 0. 65 and the ten year u. K. Gild at 1. 79 . In response to what were seeing in the bond market stocks are higher today. We saw a big sell off in yesterdays trade. Well get you a look at European Equity is. Ftse 100 below 7,000. The xetra dax below 12,000 but up around 100 points. A triple digit gain here. A little bit of a rebound in european equities. I want to show you what the euro dollar trade is doing. Weve seen quite a big drop. It is now dropping on the day. Data was worse than expected. We didnt see the reaction just yet but that trade and weakness in the euro has just come through in the last minute or so. Meantime were still seeing a little bit of dollar weakness at least against the yen and we saw sterling out performing after we saw the labor data changing hands. In the commodity space lets have a look at oil prices after yesterdays big rise. Today were still seeing brent and crude prices moving higher but at a lower pace. Wti is higher by 1. 1 . Brent crude up by three quarters of 1 . The api data showing larger than expected job in crude inventories and revisions to demand coming from the eia as well. In asia we saw a lot of data points specifically from china. Retail sales, fixed asset investment, industrial output. That was disappointing. Were seeing the shanghai comp down by. 5 . Japan posting the biggest current account surplus in seven years. Thank you. Lets get out to george. Head of u. S. Rate strategy. George, good morning to you thank you for joining us. Id like to start by touching on the gdp data we just had out. Underwhelming a little bit but the interesting thing now is you look relative to the rest of the world including the u. K. And u. S. Meant to be the bright spot and its ahead of the those countries. Is that the sell off weve seen in recent weeks . Fundamental data is just not Strong Enough . Its the opposite. This is a technical driven market. You hope to see a further rise in rates and the fact that were starting to see momentum is encouraging but it doesnt suggest theyre going to stop the qe programs any time soon. Its really all about completing programs making sure you get the economies on track and not just getting too excited over a number here or there. What is the bond market telling us then . Is this telling us that perhaps theres some more negativity around the fundamental story around europeans growth. No, the market was overstretched. People thought they had to amass large european bonds to sell them to the ecb. But you cant just buy the low rates and expect them to actually continue to perform or that youll be able to sell them at the price you actually got in and created the situation which we call trapped longs and people were trapped for the last two weeks and really screaming to get out it was a shock. I bought at the wrong level. People were screaming to get out even. Now that positioning balanced some what do you think theres still volatility in store or now do you think that with positioning evening out a little bit that volatility should fade . Look its unacceptable for the bond market to have these swings. Were supposedly the safe asset with the liquid market and weve had pretty big intraday moves. This is typical that eventually things stabilize. Were in the process of doing so. However markets were stretched and you still have a buyer and you have a backdrop where for a lot of number of reasons have kind of caused any sort of big move in markets to kind of push back Interest Rates or widen out spreads that combination caused the big gap in rates. But the next step has to move back to the fundamentals which is the pure data. That momentum is still not clear to us that we have actually turned the corner and the data is going to be strong. Until then bonds and stocks are going to trade closely to each other. Were ultimately always going to be seeing some sort of volatility, you know . We will. For us we always believed that the tightening that the fed has to do or down the road will be less specifically because they have overregulated the system to a point where its very safe and solid but any fast move shows its fragile. Thats a tightening of the system which is why were not seeing the credit growth. The market actually does the adjustment for the Central Banks. We want to thank you for your time and insight. An amtrak train from washington to new york with more than 240 people on board derailed in philadelphia tuesday night. At least five people are dead and several more injured. Lets get out to chris who is live in philadelphia with more on this story. Chris over to you. Yeah its been about 8 hours since this Train Derailment occurred here in northeast philadelphia and investigators and First Responders have been busy all night combing through the seven train cars that went off the tracks here in the port richmonday part of philadelphia. From what we understand people on board the train said it was a normal ride. They had earlier stops at philadelphia and were on their way to new york city when all of a sudden it felt like they were going into a curve and everything started shaking and then things were tumbling luggage, laptop computers, people, all flying about and then there was a very abrupt stop and people that were still conscious and able to move were trying to help some of the other victims get out. They said people were bloody with broken bones. 65 people were treated at local hospitals. Five are dead and six in Critical Condition and right now as we speak investigators are still going through the wreckage trying to see if theres any more victims in this. As you might imagine the federal government is sending a Response Team to lead the investigation. Theyre expected to be here later on today. Right now speed is looked at as a factor and the curve in the track. Theyll be inspecting the train equipment to see if there were any problems with that as well but investigators dont believe terrorism was involved. But that will certainly be looked into in the days and weeks ahead. Back to you. Chris with the latest from philadelphia. Thank you so much. Still to come on the show facebook is making friends in the news business. Will the social networks instant articles hit orbit. Well discuss. Comes to a head at the company hes annual meeting and facebook launches a mobile news app partnering with big named publishers publishers. All right lets get you a run down of what to watch this trading day. April sales are out expected to continue their recovery from the slow winter season. Also out at 8 30 we get april import price which is are expected to have risen last month due to higher oil prices. At 10 00 a. M. March business inventories are out. Macys and ralph lauren after the bell. After the close cisco, jcpenney and shake shack. Have you ever had a shake shack burger . I havent. Thats the kind of ads i get on twitter. Food. It will entice me when i get to the shake shack. Well you dont have them here from what i understand. Whenever you go to new york you have to check them out. Lets talk about another story catching the intention of investors. Its partnering with several news articles. The New York Times and buzz feed let them post articles directly to facebooks mobile app. Publishers can sell and imbed them in the articles. Facebook will also let them collect data about the people reading the articles. Facebook has a new high profile employee today. Kevin martin is hired as vp for mobile and Global Access policy. He has previously been advising the company on issues such as mobile connectivity and wireless spectrums. So facebook in the news. What do you think . A good or a bad move . For me its still down to the fact New York Times as i understand it currently charges people to read their news. Does this mean theyre going to release a few articles people can read for free or are you going to have to click on the link to facebook and then have a direct link . Im not sure which way its going but thats the crucial difference for me still. The best quality you have to pay for and i dont think those companies are monetizing things sufficiently when they offer it for free yet and advertising will generate for revenue before the best content is available for free. Carolyn seemamless technology is important. Thats very important. The problem sits a bit of a risky experiment for the publishers because with this they might rely even more on traffic coming from facebook and some publishers say facebook already accounts for 70 of their traffic. Now that percentage may go up to 80 or 90 maybe. And we are seeing a First Quarter net profit of 6. 88 billion. From russia with love. This were live in moscow with more on that story. Call 1800royal caribbean or your travel agent today. No major break through with russia but he talked about working together after 8 hours of talks with vladimir putin. Kerry said the two nations could make progress but held firm on the stance on ukraine. Lets get more to jeff live from moscow. Jeff. Yeah, this was a fascinating event not least because of the gifts that were presented right at the beginning. Ive had to dig around myself here and i can only find an orange and a banana in our fruit bowl here at the bureau but maybe we can engage in some diplomacy by handing these over because mr. Lavrov gave john kerry a basket of tomatoes and basket of potatoes as they met for the first time in absence of two years here in russia. Its not so much what was achieved because there werent any significant break throughs that either side wanted to talk about publicly. Whether it was the issue of ukraine, syria or iran but the fact that the meeting took place perhaps shows there is just a little thawing in this chill that sat over this relationship and if it takes the handing over of fruits and vegetables thats the diplomacy we can all appreciation rather than the rhetoric that characterized the relationship over the last 24 months. It was notable there did appear to be warmth and the talks went on for 8 hours so obviously there were areas of cooperation that were discussed at the bottom line though is where does this go next . What will be the outcome from this . Already john kerry as he has moved on to this twoday nato gathering talked about how do we get progress in iran. He said this is a critical moment on ukraine. Behind the fruit and vegetable diplomacy does that indicate he had a signal from the russians that theres further steps that could be taken to make sure this agreement works. Back to you. Jeff thank you very much. We too do not have any potatoes in the office but i managed to find an apple. Of course theres a lot of very important issues they have been juggling in these discussions. And well leave you with a look at how futures are trading. Dow right now indicating that we could potentially see a rebound on wall street up by 74 points in premarket trade. We back in two minutes. Welcome everyone. Youre watching worldwide exchange. Here are your headlines from around the world. Five people left dead and several injured after an amtrak train derailed near philadelphia. Were live with the latest. Markets breathe a sigh of relief. A higher open and european markets bounce back after european gdp data. Decision day for dupont. Book launches a new app partnering with big name publishers to bring a new stream of ads and articles to the mobile service. Sterling daughter at 15722. This is after we got the labor data better than expected on the earnings front. We got the bank of england Inflation Report cutting its Growth Outlook and backing the market rates the first rate hike will come in 2016. Inflation should be back at 2 within less than two years. The government has a clear mandate to return to surplus. Inflation should be around 0 . Unlikely to endure because were expecting oil prices to bounce back. Energy prices are the most important reason for the below market inflation. So there we go. The boe has for a long time said these factors are really just temporary so thats why inflation should be bouncing back. The forecast for inflation for 2015 is 0. 6 but once again its cutting its gdp forecast to 2. 5 . In other commentary it says that the strong sterling is weighing on u. K. Gdp growth and weve seen that specifically over the last couple of trading days on the back of the election outcome. Once again the first interest hike should be in 2016 but thats not news to the markets. The bank of England Governor Mark carney is delivering speech on the quarterly Inflation Report. We dont have the audio just yet. We should be getting it in just a moment. Sterling dipping versus the u. S. Dollar after that boe Inflation Report but lets just listen in. I have had to write today the second in whats likely to be a sequence of open letters to the chancellor because inflation fell to 0 in march. Two below target and the lowest since official cpi data began. As was the case in february the single most important reason for below target inflation has been the sharp fall in Energy Prices in march oil was about 40 cheaper and the price of petro was down by. 10. Sterlings continued to depress import prices. Taken together these factors explain about three quarters of the short fall of inflation from target with the remainder reflecting subdued cost particularly wages. You can continue to watch that speech on our u. K. Feed. Meantime were seeing sterling down a little bit against the dollar on the back of the boe Inflation Report. The boe cutting its growth forecast. Now an amtrak train from washington to new york with 240 people on board derailed on tuesday night. Five people are dead and several more injured. Eyewitnesses say the train that runs through the heavily travelled northeast corridor was going into a turn when it started to shake before coming to a sudden stop. Several cars flipped over. Philadelphias mayor calls the scene horrific. It is an absolute disasterous mess never seen anything like this in my life. Most personnel will say that as well. Coming up, chris will join us live from philadelphia with the latest on the amtrak Train Derailment in about 20 minutes time. Back to markets, wilfred, lets take a look at u. S. Futures and how were fairing because bond volatility is casting a shadow over stocks. The reversal of global Interest Rates is a concern for investors. Yields coming off the high of the day but still above 2 . Were looking at the dow up about 70 points in premarket trade suggesting a rebound in todays trade. The tech heavy nasdaq also up by 25 points in premarket but of course the bond market moves mark a stark reversal from what we saw last year. A lot of traders are trying to get to the bottom of what is driving the sharp reversal in bond yields but the volatility not just in the european bond market but u. S. Ten year as well. Take a look at the german bund. It was 0. 4 at one point. Analysts were betting it would dip into negative territory given that the Quantitative Easing Program is expected to push yields lower but thats not what were seeing these days. The ten year german bund at 0. 67 . It has been taking queues from the european bond market at 2. 32 . Thats one of the reasons when you look at stocks it has been the dividend paying sectors like utilities that have been underperforming. Watch those sectors as we continue to see yields rise. Lets take a look at european markets. Mixed gdp data. Italy and france. Really the bright spots. We saw a slow down in germany. The dax slowing off concerns. That data Point Holding on to a gain of 68 points but we did see a big sell off in european equities. The ftse 100 Holding Ground up about 40 points despite the boe cutting its growth forecast. Were just getting flashes on a bond auction out of germany. They sold 2. 5 billion euros of new 10 year bunds. So those yields relative to yesterday a little bit lower but this is the first time its risen since january 2014. The ratio was 1. 3. A little lower than the last auction in april and average yield 0. 65 where as in april the last auction it was 0. 13 . Demand is waning a little bit. You have the ratio 1. 3 as you pointed out. You have yields in the auction actually moving higher for the First Time Since january 2014. That tells you that qe the qe bit is no longer really working to the same extent that it has been over the last couple of months. They wrote an op ed saying global deals are low. This is just a shortterm blitz. Do you agree with him . It depends on your time frame. Its an extraordinary move in the last couple of weeks but a bond bubble driven by european qe was sort of known. Weve had a correction. The correction was sharper than we have been expecting. Its interesting the way u. K. And u. S. Yields moved also. Were looking at rate rises there and yields were in and around 1. 5 to 2 depending on which one youre looking at. They havent been bid up to the same extent. I think if youre the guest earlier on the show if youre a investor would you want to be exposed to bonds at all at the moment . Probably not. If youre a shortterm trader would you want to use the sell off on u. S. And u. K. Bonds . Maybe. Theyre not supposed to see this volatility so that in itself is an interesting story. The erratic behavior when looking at the german bund. Aol shares close sharply higher but verizon flat lined after they agreed to a 4. 4 billion all cash buyout of aol. Verizon will get control of the Huffington Post and tech crunch brands as part of the deal. According to sources, aol had been in talks to spin off part of the negotiations. Meanwhile, a filing revealed that aol agreed to a 150 million break up fee if the transaction breaks down. If you look forward five years youll be in a space with massive global Scale Networks and theres no better partner to go forward with than verizon. Its about setting up for the next five to ten years and, you know, we have spoken for years about this. Our vision has remained consistent. The world is changing and for aol, for our shareholders today is a great day but more importantly for aols talent and next five years for verizon well do a lot of meaningful things. Lets get out to new york where angelo is ready to join us us. Thank you for joining us. This is very interesting. Whats driving it for aol . Yeah well thanks for having me. So if we kind of look at what is the two key drivers or trends going on in the world today its mobile and its a video and thats really what is driving this. Were seeing more and more consumers today migrating toward watching more video and content via the internet and the key to this transaction is really verizon acquiring aols advertising platform. Not also to mention theyre acquiring other great assets as well. We heard about the Brand Content theyre acquiring. Like Huffington Post among others as well as the Subscriber Base that aol has which, you know, there are opportunities there for verizon as well to kind of shift toward you know their broadband offerings. So theres a lot imbedded within this transaction but really the key here is the advertising platform and leverage their video offerings in the future. I get that. I get that verizon wants to strengthen its footing in advertising but in 2014 aol had only 0. 74 of the Digital Advertising market. I mean is verizon overpaying for aol . 4. 4 beside . It depends on how you want to look at it. For verizon its a drop in the bucket but youre getting more than the advertising platform. They can do a lot with the other sass assets and you also have the Subscriber Base. So overall, i dont think they overpaid for the transaction. I think it was perfectly okay. Were looking at a 15 to 20 premium relative to the prior days close. So overall i think it was fine. I think theres valuable assets within aol. So i dont think they overpaid for it. So they didnt overpay but it wasnt exactly the biggest gamble ever. Would that also mean that verizon will never be in the same league as lets say apple, google for example . Yeah i mean you kind of look you can look at the advertising business here and theres no way theyre near close to the share that were looking at with regards to google and facebook but what youre getting here is youre getting some valuable technology from aol. Youre combining that with the scale of verizon. North of 100 million subscribers that verizon has and when you put that together the resources with the Great Technology that aol has it at least puts them in the conversation and it gives them a fighting chance. Thats all you can ask for right now. Thank you very much for joining us. Much appreciated. Equity analyst at capital iq. Still to come here on the show dupont versus nelson peltz. The long simmering gattis put over the future of the company could be decided today. We get to the tail of the tape, next. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. Shareholders learn if the company is able to fend off a power grabby a wellknown activist investor. Landon has the story for us. Wilfred, this has been a long running fight between dupont and nelson peltz. He has nominated four candidates to the companys board including himself. He has a 2. 7 stake in dupont estimated to be worth 1. 8 billion. He called for the company to cut costs, simplify its structure and shed noncore assets such as the Dupont Country Club and hotel dupont. She claims it would be destructive and hurt shareholder value and gut the Companys Research and development. The candidates support keeping the company on a path it claims has reduced shareholder returns of 160 better than its rivals and the s p 500. Both sides discussed a possible compromise but prospects for that are now dim. Analysts say most shareholders votes have already been cast going into todays meet chging which begins at 8 30 a. M. Eastern time. Shareholders also have a chance to make a statement for or against the candidates. And both scored victories a head of todays meeting. Three big proxy Advisory Firms endorsed one of the nominees for the boards and one of the biggest pension firms for all of the candidates. Theyre backing duponts candidates and two giant Pension Funds say they voted for duponts. Wilfred back to you. Thank you very much. Lets take a look at futures and what we can expect on wall street today. Yesterday stocks ending lower after the sell off we saw on monday. Today futures indicating we could see a rebound as bound prices march to the beat of their own drum. Lets have a look at european markets. Were seeing a bounce back after yesterdays sell off. Ftse 100 higher by 0. 7 . Better than expected numbers on earnings and the jobless rate. The lowest since 2008. Also a rebound higher by. 3 . How are we looking wilf . Interesting to see the peak in yields just being tempered today. Of course still elevated to where we were some weeks ago. The u. S. Ten year briefly touched it. Its off at 2. 22. The ten year which touched 0. 7 is lower now but there was an auction just 20 minutes ago where we saw a big auction of ten years at the level of 0. 65 which seems in terms of fresh auctions saw yields rise for the first time in quite sometime. Now on to a sad story, an amtrak train from washington to new york with more than 240 people on board derailed in philadelphia tuesday night. At least five people are dead and several more injured. Lets get out to chris who is live in pennsylvania with more on this story and chris just set the scene for us. What are you seeing on the ground . Yeah well were starting to see the sunrise so thats certainly going to be a change here as investigators and First Responders will be able to see what theyre actually dealing with. In the 8 hours since this Train Derailment occurred investigators were out there with flashlights just trying to see whatever they could in the dark to see if there were any more victims in this. You mentioned that this train was going from washington d. C. To new york. It derailed here in northeast philadelphia shortly after stopping at the philadelphia downtown station, 30th street station and people on board the train describe a pretty normal experience until it approached a curve here in this neighborhood. They said everything started shaking and then things started flying computers and luggage and people and then there was a sudden stop as the train came to a rest. All 7 cars went off the track. People got their wits about them. They were trying to help other people that couldnt get out on their own. They were breaking glass and trying to pry open doors to get out and get away from the train. Were told that 65 people were treated in local hospitals. Six people are still in Critical Condition and as you mentioned five people have been killed in this train accident. The National Transportation safety board is sending a team to investigate to try to figure out exactly what the cause was. Horrible situation all around. Thank you for getting us the latest. Before we go to break, these are the headlines. At least five people are killed as an amtrak train crashes in philadelphia. U. S. Futures point to a higher open as european markets bounce back and facebook launches a mobile news app partnering with big named publishers. Well be back in two. t collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. Welcome back. Macys reports First Quarter earnings before the bell. Theyre expected to post a slight increase in earnings per share. This after sales and profits in 2014 missed forecasts. Joining us to discuss on what to expect from macys is paul. Research analyst at detsche bank. Theres several external factors. Weather and the strength of the dollar. Despite these head winds do you think macys can beat expectations . Were expecting a relatively in line print as you mentioned there were a number of hurdles of this First Quarter. I could throw in an earlier easter as another factor that did impact First Quarter Sales Results where macys has been strong, however, over the years its an amazing margin so we do expect them to have balance, slower sales with strong expense management and they have a great Balance Sheet that provides support to the bottom line typically through meaningful buy back activity. What are you expecting in terms of International Sales . Could that be a source of opportunity for macys as it expands to other locations . Macys has a unique brand that could potentially move beyond its current footprint. As you mentioned it does have Licensing Agreements in the middle east. We dont know of any additional plans at the moment. But certainly macys i think will be looking to move beyond its current presence and it did just recently do an acquisition here in the u. S. Through the blue mercury brand. Thats a small cosmetic company and we do see Growth Opportunities through that as well as the new off price format called macys backstage which will open this fall. A more general question about the retailers and the job and the rise that weve seen in the price of oil. What really is the demand elasticity to oil and how will that effect the retailers . Certainly its very impactful to any core consumer in terms of having incremental dollars in the wallet there to spend on you know products like clothes and home items. That said our work really says that correlations over a long period of time are very minimal. So we do see it as a positive catalyst for the consumer but frankly we think the labor market is a much more meaningful meaningful metric. Add to that that wage increases is part of the conversation as we see from walmart, t. J. Max and mcdonalds. And we are more optimistic as we think about u. S. Retail over the coming months. Thats real interesting. Thank you for your time. Research analyst at deutsche bank. Facebook is partnering with several news publishers including nbc news the New York Times and buzz feed to let them post articles directly to the mobile app. Throughout the show we have been hearing from you on this story and how do you like to consume your news in the digital age . Straight from the publisher or through social media. What do you think about what you have to put up with on social media. Would you rather pay a subscription and not have to see them. He says publishers no longer go to publishers brackets unless theyre old. Its all about twitter now. Scott says go to sites afterward if i require information. We had one tweet indirectly to me that said someone put at gag at wilfred frosts mouth before someone picks him up on it. Clearly he doesnt want to be charged. That was your idea. Ill happily pay a little bit. I want free content. Quite a response there. Lets have a look at bond markets. Were seeing a little stabilization today. Were not seeing the sell off to the same extent weve seen in the last couple of days. The ten year treasury note 2. 22 . Thats down quite a bit from yesterday. Ten year bund at 62 basis points. Lets have a quick look at what this means for u. S. Futures. A positive open. Expected to open up by 9 points. Thats all we have time for on todays show. Thank you for watching. Im wilfred frost. All right. Squawk box is next. Well see you tomorrow. Good morning, breaking news. If you havent heard a deadly amtrak Train Derailment in philadelphia on the busy northeast corridor. Five people are dead. Six more in Critical Condition and the search continues for more victims right now. In Global Market news a big loss for u. S. Shale. The International Energy agency says american producers have blinked in that battle with opec and facebook wants you to like your news feed. The social network teaming up with publishers to launch instant articles pushing stories right to you promising that theyll come faster than ever before. Its wednesday, may 13th and squawk box begins right now. Live from new york where business never sleeps this is squawk box. Good morning, and welcome to squawk box here on cnbc. Becky and andrew are off today. An amtrak passenger train carrying 238 passengers and five crew members derailed late last night. At least five people are confirmed dead. The train was heading from washington to new york when it went off the tracks just north of downtown philadelphia. Passengers say everything started to shake luggage and people went flying and then there was a violent stop. We were sitting there and then it just you saw it go like that. You can feel it o