Hello and welcome to todays Worldwide Exchange. Im kelly evans examine these are your headlines from around if world. Steady as she goes. The u. S. Economy is expected to have added another modest number of jobs last month, not enough to have significantly lowered the Unemployment Rate. China added to the upside as numbers surge 20 . The worlds biggest economy bottomed out as the Fourth Quarter number comes in flat with the minus 1 estimate. And passing grade, the fed says all but one of the biggest u. S. Banks met capital thresholds in its latest round of stress tests. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Ross and i are together sort of today. 50i78 here on set in london. Ross, it looks like youre in upstate new york. Yeah. Do you like it . I think its a little nicer than upstate new york, even on a gloomy, dreek, damp day in italy. If youre wondering where i am there is something to be said for being there on the coast of the eitalian shores, is it not . Yes. Lake como. Tell us a little bit. There was some back and forth with nouriel, with jim oneill. What have you learned so far . Well, look, jim automatically says whatever nouriel says im going to disagree with him because hes far too gloomy. Nouriel was far too upbeat on the u. S. Economy. Says were getting great delivery from the boom and shale of gas, Housing Market is looking better, job creation, Economic Growth steady if unspectacular. He was slightly nervous about the fiscal drag. That made his slightly nervous about where we stand on equity markets. Sometimes the stock market gives you the wrong signal. The u. S. Stock market could correct somehow. Says you, kelly. Fiscal drag is going to be worth around 1. 5 and so, therefore, hes looking for forecasts this year of around 1. 5 . You can see the politics in his mind are going to have a big impact and he also thinks that were underplaying that a little bit. Now, jim, on the other hand, said, look, i disagree with that. Hes getting he said there is generally quite a lot of excitement about where we stand with the level of equity markets. And that may be rather justified because apart from lack of Economic Growth here in likes of italy and spain, germany doing well, chinese Economic Growth doing well. Japan is now trying something finally that they havent tried in the last 10 or 15 years. Apart from whats going on in the politics and the fiscal drag, the u. S. Economy is looking fairly healthy. J jims view was maybe equity price res justified. Ross, what i cant wait to hear is the view from richard cou. These are the questions i would love to get his view on, as well. Richard queue is, of course, the chief economist for knew murrah. I was speaking to him last night, really amazing views about how he thinks, perhaps, investors in Japanese Equities are being slightly overly bullish on how much the bank of japan can deliver. Theyre underplaying the risk from what politicians may be able to deliver. Hes got some f views, kelly, on how whats happened in japan is behind a lot of the thoughts of the bernanke fed. So he said hes going to come on out so i have to go and grab him when his session finishes. Literally, i think im going to have to bring him here. But hes agreed to come on, we just have to work out the logistics of it. And well recommend in the meantime that viewers go check out his book. The holy grail of macroeconomics. Its a personal favorite. Ross, we hope the weather improves in the meantime. Ross will also speak with gill marcus. Ross, the currency is at session highs. So this now is certainly in focus with her. Yeah. Look, and its great to have her on. Shell be joining us in about 17 minutes. Well be looking at the impact of the strikes and the longterm impact thats going on with the strikes and the unions in south africa. Ross, thanks very much. Now, also coming up on todays program, as we approach the second anniversary of the fukushima disaster, well speak with the former u. S. Energy secretary to find out why hes bullish on the future of Nuclear Power in japan and thinks Uranium Price res at a Tipping Point. Denn Dennis Gartman will call in later. Well ask him about food prices, too. And show me the money. How is the Music Industry dealing with falling album sales and traditional revenue streams. And at 11 30 cet, i think i know this guy, well talk to David Russell to get his view on unemployment in the u. S. And how much of an impact he thinks the sequester will have. All that and more. If you want to put questions to these guests throughout the show, if you want to respond to anything youve heard so far, send in your thoughts. Email, who wouldwide cnbc. Com, tweet us, cnbcwex and what not. Now its 12 30 out of the u. S. Forecasts calling for an increase of 160,000 in nonfarm payrolls. Its just about what we saw in january. Construction manufacturing expected to see gains. The number could be skewed because of the snowstorm that buried the east coast could have kept some workers at home. The Unemployment Rate expected to tick down to 7. 8 . Patrick buried is joining me on set now. We could maybe reverse the uptick we saw in unemployment last month. What do you expect to see from the jobs report today . Were reasonably optimistic. We tend to look at a blend of the three of the indices, which is the adp, the household and the headline figure. And that indicates to us because if you look at the adp figure which came out earlier in the week, they talked about 198,000 jobs, which is a very strong number. Do you think adp is worth listening to . I do. And it was upgraded from the previous month. These governments do tend to be volatile. We do tend to pay a lot of attention to. So given that its 198,000 consensus is 160,000 today, we would suspect most probably being brave looking for 170,000, 180,000. I just wonder if the whisper number is much higher because after the strong adp report, jobless claims out at 143,000 and look whats happening with the stock market. You cant look at that and say theres not a lot of good news priced in. If anything, there appears to be a risk to the down side. Certainly the lite leading indicators are indicating what the market is telling you, that the Employment Situation is getting better. And you must remember, bernanke is very keen on getting that number down to 7. 5 6. 5 . 7. 5 first, 6. 5 ultimately. What do you think the nonfarm payroll numbers should be . We want you to send in your estimates. There will be a prize to whomever gets it right. You said your is 170 . 170,000 to 180,000. Send us your views and well come up with a prize for the winner. The fed says the biggest u. S. Banks have enough capital to with stand the severe economic show. All but one bank passed the stress test. Bofa, wells fargo and citi saw the most improvement in their Tier One Capital ratios. Goldman had one of the lowest outcomes. The fed said it would suffer big losses related to Counter Party risks. Banks have until the end of march to publish their own tests and after the results, citi announced its capital plans saying it has asked to launch a 1. 2 billion Share Buyback program. Shares of citi responding to the up side by adding 2 . This, by the way, in frankfurt trade. Elsewhere, jpm taking lows, goldman holding up reasonably well. Patrick, your thoughts on these stress tests . They dont come as a surprise. Surely the goldman mirg must have come as a surprise. The goldman figure was a little on the low side. But thats probably one of the best Investment Banks on the street. Theyre chockfull of m a business at the moment. I dont think its a surprise. If you look at the bossel 3, which is more strict in terms of damage weighted assets, they highlighted a lot of risk in the european banks but not risk in the u. S. Banks which have improved that capital. And this is the dodd frank rule which says basically in a really bad scenario, like back in 2008, youre going to see these capital levels fall to half of what they are. In reality, theyve got twice the capital on the Balance Sheets at the moment. The u. S. Banks are fixed. So theres not a problem. No surprise. Markets worked it out and look, if u. S. Banks are fixed, why are we hearing eric holder and the like talking about essentially breaking them up . Sure. Thats because of, obviously, the Investment Bank and the retail banks, in fact, obviously being broken up. Theyre still working, so irrespective of whether they do get broken up, the banks themselves as the lender of the first resort i mean, the banks really are the economy today. Certainly the if you look at the pmi figure, if you look at the Employment Situation, if you look at housing, the banks are really behind all that. So whether you break up those indices, it doesnt matter. The banks are out there lending, theyre open for business, and they will continue to do well. Its just interesting because weve seen this rally in banks share prices. You know, weve seen them do relatively better. Were basically seeing Everyone Party in this equity rebound. And you could point to fundamentals and say that that is just fine, but theres also people out there saying one of the reasons why performance has been to strong in the stock market is companies are shrinking. And i wonder if citi with this latest byeback is an example of that. Sure. We look at the valuations of the banks. If you look at them on a historic basis, banks on book value have been tangible value, have designed nearly 4. 5 times. Banks are trading on nearly 1. 3 times. I agree with you, banks have doubled their trouble from where theyve traded from. From history, these banks are still extremely cheap. Even though were cautious shortterm like everybody else, we think theres a huge runway left in these banks longer term. Stay there. Barclays is reportedly looking to shed around 30 of its works force in a bid to create a leaner bank. More of its customers are turn to go online banking. After the groups earnings update last month that the lender could potentially update with around 40,000 fewer staff in the future. Jenkins did replace do many bob dimon last summer. You can see shares are adding about 0. 75 . Whats that . This morning. Yeah. U. S. Stocks pushing modestly higher in thursday trade. The dow hit its third consecutive record high as we were just discussing with patrick adding another 0. 23 to 14,329. Is the stock market shrinking, a, because of all the buybacks and private equity influence and whatnot . B, does that matter . Buybacks are important. Its part of Precious Capital allocation. But i think its important just to see why the markets run as high as it has done. Theres a lot of skeptics out there. In fact, just this week ive been talking to some senior Portfolio Managers in establish institutions and theyre telling me theyre increasing their weighting to the u. S. The market is basically showing that earnings are 10 above previous peaks. Basically, if you look at gdp, its 10 above previous peaks. So theres real justification for the market trading where it is. And i was just looking yesterday at ratios that if you look over the last 30 years, pes are 20 below where theyve traded in the state, basically priced to book 30 , price to sales are basically flat. So you say this is a stop on the road to 15,000 . Yes. Dow 16,000 . Dow 20,000 . Maybe not as bullish of that, but im certainly very bullish. I was going to say, you are in the equities business. You would hope that you believed in the product youre selling. The market is up 20 since last june. I just worry about the people who are going to get exposure now since weve done the doubling at the bottom. Is the retail guy go get going to get burned again . The average pe is 15 times at the moment on the u. S. Thats been thats down 20 from where its been in the past, which is 18 times. As the market gets higher, it gets more mature so you are to be more selective and you have to be stopped. You have to be stock specific. You have to be careful what you buy. Our work indicates that health care and technology, cisco, intel on 12 times earnings with 44 yield. That to me is not risk and thats the place where i would recommend retail money goes. Well leave it there. Patrick spencer from burieds. Thank you so much for your time. Thank you. Meantime, investors are sounding alarms over this rally. Societiee generales edwards says the dow feels erie similar to 2007. Theres more of his thoughts on the website, cnbc. Com. Change nas february trade figures have caught the markets by stries. On the other hand, imports were down much more than expected, a 15 year on year drop. That was about twice as much as expected. The results was a trade surplus of 15 billion for february. Still, economyists are cautioning against reading too much into the data as its skewed by the timing of the Lunar New Year holiday. Well get more china figures tomorrow. Inflation and retail sales and industry output on task. If you thought you would have a quiet weekend, forget about it. You have to go through those figures. Meanwhile, a ray of home for the japanese economy as it bounced back from its third recession in a decade. It grew 0. 2 in the Fourth Quarter. But its not all good news. Data also showed a shortfall in japans current account for the Third Straight month. Thats the countrys trade balance worsened. Partly the result of a weaker yen, which drives up the cost of on japans energy imports. Lets get a check to how markets have reacted. Li sixuan joins us from singapore. Thank you, kelly. Positive u. S. Data helped boost sentiment here in asia while the nikkei jumped 3. 6 to a new 53month high and rallied nearly 6 on the week. Japans data as you just mentioned showed the economy bounced back from the third recession in ten years. Theres a rule change for short telling as the reflationary story is helping sentiment. The yen weakened to a 3 1 2 year low against the greenback dropping exporter stocks. Retailing jumped another 10 and has soared over 20 on the week this after unit clo announced february strong sales earlier in the week. In china, imports lagged, but exports first and the shanghai composite hesed up 0. 25 ahead of the second batch of data coming out tomorrow. Authorities may resume ipo approvals over the next few months. Meanwhile, the hang seng added 1. 4 today and ended the week in positive territory as we see strong gains in Energy Majors and telcos. South koreas kospi ended just above par as the jitters about north korea headed to the upside. Samsung electronics remained week. Australias asx 200 inched out a modest 0. 28 gain. Were receive some green on the map behind her. Adding about 0. 5 for the stoxx 600 on this friday as we wait for the u. S. Jobs report. The ftse mib is rallying, adding almost today. The ibex is similarly participating. The ftse over here, which is rivaling u. S. Indexes and being up almost 10 this year. Its more in the range of 4 had or 5 for germanys index. Banks are the sector that is the top gainer today. Take a look across the board. In fact, theres only one sector in the red and thats travel and leisure up here. Up 1. 5 nearly and you have to wonder whether that is reflecting what we heard out of the u. S. With regard to the stress tests yesterday, indicating for the most part banks would pass an adverse scenario in the economy. A different story is whether theyre going to be as fundamentally profitable as they are today. Take a look at the bond space. This has been so interesting in the last couple of days. Look at what were seeing yet again. I wonder how many days weve seen a winning streak for spanish and italian debt. Italy, 4. 5 . Spain 4. 87 . A differential staying relatively constant. About 30 basis points. Despite signs, initially stress after the eye trillionan elections, weve seep that decree creeding. Tore yex, meanwhile, so much of the story lately and well have Dennis Gartman on in the show to talk about his favorite pairs. Sterling back over 1. 50. Following the bank of decisions not to do anything yet. Euro dollar is slightly weaker this morning. Is South African rand hitting a fouryear high versus the dollar yesterday. Take a look there at wa weve been seeing. Its also at session highs today. On that note, ross is out at the ambrosetti workshop. Whats happening out there . Were going to talk south africa in a few moments. When we come back, well be joined by gill marcus. Well get her views on the rand. If it has weakened any more, it will be interesting to see what that does for inflation. Still more to come on Worldwide Exchange. [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operation. When emerson takes up the challenge, its never been done before simply becomes consider it solved. Emerson. Were down here at the shores of lake como. Its all smaller, more intimate gathering. Now, weve been focusing on lots of things in europe. Time to turn our attention to africa. Joining us now is the governor of the reserve bank of south africa, gill marcus. Thanks very much, indeed, governor for joining us. Good morning. Kelly was talking earlier about the rand just appreciating a little bit this morning. But its been down before today, nearly 7 against the dollar. How concerned are you by the rands weakness . Look, obviously, its a concern. Its both the level and the volatility. It just had impacts on the way. People look at the currency and the opportunities around it. We think its overdone at the moment. But as you know, it does move in fairly large bands. It has been consistently over reasonable period between 8 rand and 8 rand 50. It moved to the 8. 59 rand and we think it could be traced over the medium term back to better levels. But obviously, it has the benefit in terms of addressing the appreciation that we have had for some as