Transcripts For CNBC Worldwide Exchange 20150529 : vimarsana

In asia the shanghai composite closes lower after an erratic session that saw shares dip into direction territory. The french drug maker with one of the best performing stocks in europe with reports that pfizer is eyeing a takeover bid. You have a duty to change the face of fifa. These are the words of Sepp Sepp Blatter speaking ahead of a vote on his reelection as president. Italys numbers just hit the table. Growing 0. 3 from the First Quarter from the Fourth Quarter of 2014 confirming a preliminary estimate and also revised up to 0. 1 year over year. Taking a look at the euro a little higher holding on to 109. A similar level that it traded at yesterday. We should point out as we hit the halfway park in 2015 italy is actually the out performer. Ftse mib up 24 year to date. Greece is a top story for us. Theres more mixed messages in the situation in greece. Lagarde warns a grexit could be possible but would not mean the end of the euro. Meanwhile the greek government hopes to wrap up cash for reform negotiators with its len dors lenders by sunday. But 7. 2 billion euros in loans can be released. Steve has been speaking to various leaders on a prospect of a greek deal coming together. Perhaps even by this sunday. Yeah look. Lets go back to trading psychology it is a possibility that greece will leave the euro zone. Its a possible that youre going to win the euro millions tonight and be worth 60 million. Theres a possibility but a chance it might not happen. So i wouldnt know whether id buy or sale. I dont know how that takes us forward. So id be tempered if i was pushing on the trades at the moment. Its been a long while since it did it of course. Theres a lot of back and forth. He said when both parties want a deal we get a deal. But i also spoke to the Financial Affairs commissioner and i thought he cut through a lot of the binary debate we have been having. The debate on one side is the greeks are promising a lot but underdelivering saying we almost got a deal and on the other side of the equation you have the creditors saying were so far away from a deal as well but he said to me were making some real progress. In fact why dont we just get to the tape now and we can listen in to the fact rather than the rhetoric going around. I wouldnt say so since the last three weeks we have been progressing as well on process and substance. We have been progressing more in the last three weeks than the previous three months. Now we are talk about serious matters and we are talking seriously about serious matters such as vat, the creation of independent on revenue and loans. We are starting to discuss on pensions. So no we have a more serious process and more serious talks today but its true that were not yet there. A lot needs to be done that the conditions for an agreement are not yet met and this is why we need to work day and night because we want greece to stay in the euro zone within the normal natural place of greece and we must do that through process this authorizes this country to create growth and to create jobs. Theres a quote from Christine Lagarde that there could be a grexit as well. What do you think the chances of that are . Greece stay in the euro zone. Reform greece. But its clear that we are also working with the other institutions and that we are in full solidarity and that we Work Together in order to build the conditions for this agreement and it is opposition. And yet being repaired and responsible you must have done work on the plan b and the grexit. This is greece in the euro zone. So the truth is actually that some really boring detailed work has been done. Its not sexy to say they made progress and they have made quote progress on serious matters, vat, independent agencies on revenue, discussing pensions and administrative reforms but theres a lot more to be done. The greex say were nearly there and the creditors are saying were nowhere near. The boring bits are being done and theyre the key bits because they mean the creditors can say we go back and forced the greeks to do this and the greeks can go back and say we have better terms on this this and this. We didnt get everything we wanted but this is done. If they go on longer then so be it. Everyone out there wants a deal. But they dont just want any deal. We want a shortterm deal and a deal that isnt just kicking it into the long grass. Weve seen more of the latter over the last couple of years and Everyone Wants a longer term deal and thats worth working a little longer for. Smells like political gamesmanship but if i do win the lottery tonight im not sharing any of my wealth with you. Thank you very much. Good team spirit. Very nice. Always a pleasure. Steve well see you on the other end of Worldwide Exchange. Lets continue with greece now. Julia, i want to kick it off with you. Im trying to understand the mechanics of this potential deal. It seems like high level agreement is the most successful on driving it forward. Would you agree . Progress is being made and more progress has been made as the timing gets that much more critical. Its just key issues and i dont think we should underestimate the difficulties the greeks have going back to their population. We need to meet the fiscal gaps and reforms being asked of them but the most important thing that came out of yesterday from the imf was the fact that they can delay the payment due on june 5th. Make one payment at the end of june so even if we were looking at some deadline as far as the financing is concerned the greek versus the option the push the timetable back. I want to get your thoughts on that. International players have been pressuring greece to find a resolution but were starting to see domestic pressures rise. Do you think that will be enough to bring athens to the finish line . Good morning. I actually think that we are getting closer to a deal. The reform list theres still some points of this agreement on pensions and labor about a lot of the ground work has been done. Obviously theres a gap between creditors and debtors and theres a chance that we dont get an agreement on time. The agreement could come after the imf payments that start from the 5th of june so we could have a cash flow short fall but were in a much better position than we were two months ago. If we have a missed payment thats not a grexit. Theres a period in which greece can sort itself out and perhaps do a referendum and if there is a referendum the greek people want a deal. Increasingly they want a deal and they dont like how the government is handling negotiations. Its likely that in the end well still have a positive referendum result to agree on a deal. As you just mentioned even if they do miss the payment on june 5th its not a default. Theyve got this grace period also but like i was just saying they can make a balloon payment at the end of june if they want to too but how do you think investors will react if they decide to miss that payment on june 5th . Particularly given the moves in bonds recently. People are still very sensitive. The chances of a missed payment is something investors are considering. I dont think its the base Case Scenario but theres around a 40 probability of a missed payment versus a 60 probability of an agreement by june 5th. Now the imf could be flexible and say we could have a bundle payment or we could have a bundle payment later on but if that doesnt happen then missed payment could make spreads widen generally but we think its a small widening. Its a small sell off in italy and spanish bonds and 0. 5 in yields is what the investors are expecting. The bigger problem is that by the end of june you need a bigger longterm agreement because otherwise in july you start having ecb payments and thats a much more difficult thing to miss. The imf has a long grace period of two months before you actually have default but if you miss an ecb payment thats a little more of a political concern. I was at a dinner last night with a couple of Portfolio Managers that said all it takes is one country outside of europe to signal Financial Cooperation and youll see some question greeces Traditional Alliance on europe. Do you agree . Is that possible . Im not sure. If you have one country outside of europe i think there are serious consequences. If you have a potential exit if thats the question then you challenge the irreversibility of the euro zone for the next decades. So there are serious issues. I dont believe in the bad apple theory where you can put a country out of europe or the euro zone and Everything Else looks good. I think there are serious consequences in the next decade for other countries which could have similar difficulties. I want to draw our attention to the markets. Were looking at the german dax hitting session lows right now. You can take a look at european markets. Were trading lower on the last trading day of the month. Xetra dax at 11,529. Now down 150 points. Of course greece has been one of the reasons investors have been going long the markets, going short the markets but lets dream a little. If greece does reach a deal by sunday what would this deal or agreement really look like . Well this is the crucial question isnt it . In terms of reforms as alberto was just saying there. This is only about completing a program that they should have finished and come up with the reforms in the past. What are they going to do about the debt me tricks on sustain blt sustainability there. They want something bigger. Alberto, i want to ask you, if we incorporate greece in your base case ultimately and we do reach a deal here you say qe is still the biggest game in town. Credit to remain underpinned. Is there any kind of volatility and pull back in the coming weeks . An opportunity to buy as far as youre concerned . Were still positive on the market in europe as well. If there is some volatility on these negotiations headlines we would take more risk. Markets rallied a lot since the beginning of the year. So its a little bit more balanced but we have to remember that the ecb is still there buying 60 billion of bounds per month which is around twice any type of bond issued. So theyre buying two euro for every euro of bonds issued in the future and people that already own the bonds are not selling because, you know theres very little alternative. So for the bond market this environment of positive growth no deflation but low inflation is still positive for bond investors. You know greece theres a lot of discussion around grexit. I still think its a very low probability. So even if you have a missed payment. You have a referendum. Greek people want the government to reach a deal. So obviously i do believe that greek debt in the long run is not sustainable in the current form but its in everyones interest to reach a deal to buy time to have the longer term negotiation around debt relief which could happen in one, two, three years time after the reforms have been done. So will greece really strike a deal on sunday or is it just false hope from athens . If you want to join in on the conversation get in touch with us and email us at worldwide cnbc. Com. Tweet us at cnbcwex. But lets get straight to the markets. Were seeing markets move sharply lower over the last 20 minutes. Take a look at the stoxx europe 600 index. Down about. 8 as we did see equities lose steam yesterday. The slow progress taking place between greek leaders and its international creditors. Of course you also have the imf warning that a grexit could happen but the imf confirming that athens would be permitted to delay all of the june repayments until the end of the month. So thats where were set up in terms of heading into june. Lets take a look. The cac 40 down 1. 2 . The italian market down. This is the last trading day of may. Were almost halfway through the year and if you take a look at year to date performance, italy is actually the out performer. Up 24 year to date. The german markets seeing a gain of 18 . A lot of that having to do with Monetary Policy coupled with the weaker currency environment. The euro of course holding on to 109. A quick look at the bond market. Interesting enough yesterday u. S. Treasury bonds strengthened driven by a strong auction. The bond volatility increased in april due to the sell off in the european bond market. But now yields stabilizing at 2. 12 on the ten year and in germany were looking at the yield at 0. 51 . Lets take a look at currencies still a big part of the conversation. Its one of the reasons european equities have been out performing. Euro holding on to 10966 against the us. Dollar. We saw the italian read at 0. 3 . Thats a look at how currencies are shaping up in todays trade but asia has been a big story given the sell off in composite yesterday. A little bit of a rebound today. Lets get out to sri in singapore with todays trading action. We saw very very sharp volatility and some very swingy moves in the market. We started off in negative territory in the market open and the market did drop. We started stable and then dropped about 4 . We saw rally and retreat so a lot of volatility and i dont think its over yet. Especially when you consider whats happening next week. Locally on monday we get pmi data. If its a bad number then the market will once again and this has been the paradigm for quite sometime will front run the idea of more stimulus an more easing. Lets not forget hsbc out with a note earlier this week doubling down on their stimulus and easing projections. So theres a sense in some circles of the market that theyre behind the curve. Bear that in mind. We have new ipos hitting the market. Thats going to bleed a lot of activity from the main board. We could see the market pulled a lot of directions and especially consider on top of that if that wasnt enough the external factors. June 5th this time next friday is going to be a very very important day for the Capital Markets globally. Not only because payrolls are released from the u. S. But of course you and i know we have that june 5th imf Repayment Deadline bumping up against that for greece. So expect a lot of volatility from the external factor to hit the china markets and asia more broadly next week. Its going to be interesting. Back to you. Have a nice weekend by the way. Same to you. Thank you so much. Coming up on Worldwide Exchange. The race for space. Nasa reaches for new heights with a 30 Million Mission to jupiters moon. We speak to nasas super star engineer about the project in the next hour. Another day and another mega chip deal potentially in the works. Reports suggest intel is near a deal to buy altera. Well bring you the details. Plus how do you spell scherenschnitte. The word that brought two to victory in the worlds biggest spelling bee. Thats coming up. I hate cleaning the gutters. Have you touched the stuff . Its evil. And ladders. Awwwwwww they have all those warnings on them. Might as well say, youre going to die, jeff. You hired someone to clean the gutters . Not just someone. Someone from angies list. But were not members. We dont have to be to use their new snapfix feature. Angies list helped me find a highly rated Service Provider to do the work at a fair price. Come see what the new angies list can do for you. Welcome back. First quarter u. S. Gdp is expected to slip into negative territory when it was released before the market opened today. The u. S. Economy grew by a slight 0. 2 but now a survey is forecasting a 1 contraction. Thats what were expecting. Temporary factors, bad weather and port labor disputes at the start of the year plus a stronger u. S. Dollar hit exports while Softening Oil prices hurt the major energy players. Industrial production posted its 6th consecutive monthly drop while durable goods dropped. 5 . Americans have been shopping less and for the past five months. Thats the type of data we have been getting over the past couple of months. Still with us is head of Macro Credit Research at rbs. This First Quarter gdp number has been under the spotlight given the mixed Economic Data over the past couple of months. What do you think . Will we see a drop in gdp growth . And does that derail the u. S. Economy recovery . Definitely theres a softer trend, especially given the strong dollar and the weather but i think theres also some structural reasons. Imagine two scenarios. One where you have the 50 growing. We have a lot closer to where the recovery is very imbalanced and the Housing Market as well. We see states where in fla afla where houses are down 20 or 30 . Other cities where theyre up 20 since the peek of 2007. The effect of qe and low Interest Rates has been really imbalanced on the country in terms of the geography but also the different core tile of wealth in the population and i think the fact that some states in some parts of the population are in a very weak position theyre out of the work force for a long time, this is making the fed worried and a lot of these part of the populations are also very levered. There is over 1 trillion over 8 of gdp in Student Loans so the fed hike is still in the cards for this year but its going to be really slow. This is a temporary blip in a strong recovery. It sounds worrisome at 10,000 feet. Yeah it is but it is also sign that Monetary Policy can only do so much. In fact if you think about the level of growth we have compared to how much Interest Rate versus been cut in Central Banks something is broken. Its broken because theres not as much demand for credit. Households have been scarred by the crisis. Corporates are refinancing and buying back stock but not reinvesting or hiring as much. So the Financial Assets have done well but the real economy is still lagging behind and this is a problem to solve with fiscal policy with reforms as well but not only with qe. Summer does not bring the rebound that many are forecasting. Im hesitant to even ask this but could qe still be back on the stable with the fed potentially look at unconventional monetary policies . I dont think so. I think were still looking at a hike in september but the trajectory after that is going to be slow. We saw the Sepp Sepp Blatter<\/a> speaking ahead of a vote on his reelection as president. Italys numbers just hit the table. Growing 0. 3 from the First Quarter<\/a> from the Fourth Quarter<\/a> of 2014 confirming a preliminary estimate and also revised up to 0. 1 year over year. Taking a look at the euro a little higher holding on to 109. A similar level that it traded at yesterday. We should point out as we hit the halfway park in 2015 italy is actually the out performer. Ftse mib up 24 year to date. Greece is a top story for us. Theres more mixed messages in the situation in greece. Lagarde warns a grexit could be possible but would not mean the end of the euro. Meanwhile the greek government hopes to wrap up cash for reform negotiators with its len dors lenders by sunday. But 7. 2 billion euros in loans can be released. Steve has been speaking to various leaders on a prospect of a greek deal coming together. Perhaps even by this sunday. Yeah look. Lets go back to trading psychology it is a possibility that greece will leave the euro zone. Its a possible that youre going to win the euro millions tonight and be worth 60 million. Theres a possibility but a chance it might not happen. So i wouldnt know whether id buy or sale. I dont know how that takes us forward. So id be tempered if i was pushing on the trades at the moment. Its been a long while since it did it of course. Theres a lot of back and forth. He said when both parties want a deal we get a deal. But i also spoke to the Financial Affairs<\/a> commissioner and i thought he cut through a lot of the binary debate we have been having. The debate on one side is the greeks are promising a lot but underdelivering saying we almost got a deal and on the other side of the equation you have the creditors saying were so far away from a deal as well but he said to me were making some real progress. In fact why dont we just get to the tape now and we can listen in to the fact rather than the rhetoric going around. I wouldnt say so since the last three weeks we have been progressing as well on process and substance. We have been progressing more in the last three weeks than the previous three months. Now we are talk about serious matters and we are talking seriously about serious matters such as vat, the creation of independent on revenue and loans. We are starting to discuss on pensions. So no we have a more serious process and more serious talks today but its true that were not yet there. A lot needs to be done that the conditions for an agreement are not yet met and this is why we need to work day and night because we want greece to stay in the euro zone within the normal natural place of greece and we must do that through process this authorizes this country to create growth and to create jobs. Theres a quote from Christine Lagarde<\/a> that there could be a grexit as well. What do you think the chances of that are . Greece stay in the euro zone. Reform greece. But its clear that we are also working with the other institutions and that we are in full solidarity and that we Work Together<\/a> in order to build the conditions for this agreement and it is opposition. And yet being repaired and responsible you must have done work on the plan b and the grexit. This is greece in the euro zone. So the truth is actually that some really boring detailed work has been done. Its not sexy to say they made progress and they have made quote progress on serious matters, vat, independent agencies on revenue, discussing pensions and administrative reforms but theres a lot more to be done. The greex say were nearly there and the creditors are saying were nowhere near. The boring bits are being done and theyre the key bits because they mean the creditors can say we go back and forced the greeks to do this and the greeks can go back and say we have better terms on this this and this. We didnt get everything we wanted but this is done. If they go on longer then so be it. Everyone out there wants a deal. But they dont just want any deal. We want a shortterm deal and a deal that isnt just kicking it into the long grass. Weve seen more of the latter over the last couple of years and Everyone Wants<\/a> a longer term deal and thats worth working a little longer for. Smells like political gamesmanship but if i do win the lottery tonight im not sharing any of my wealth with you. Thank you very much. Good team spirit. Very nice. Always a pleasure. Steve well see you on the other end of Worldwide Exchange<\/a>. Lets continue with greece now. Julia, i want to kick it off with you. Im trying to understand the mechanics of this potential deal. It seems like high level agreement is the most successful on driving it forward. Would you agree . Progress is being made and more progress has been made as the timing gets that much more critical. Its just key issues and i dont think we should underestimate the difficulties the greeks have going back to their population. We need to meet the fiscal gaps and reforms being asked of them but the most important thing that came out of yesterday from the imf was the fact that they can delay the payment due on june 5th. Make one payment at the end of june so even if we were looking at some deadline as far as the financing is concerned the greek versus the option the push the timetable back. I want to get your thoughts on that. International players have been pressuring greece to find a resolution but were starting to see domestic pressures rise. Do you think that will be enough to bring athens to the finish line . Good morning. I actually think that we are getting closer to a deal. The reform list theres still some points of this agreement on pensions and labor about a lot of the ground work has been done. Obviously theres a gap between creditors and debtors and theres a chance that we dont get an agreement on time. The agreement could come after the imf payments that start from the 5th of june so we could have a cash flow short fall but were in a much better position than we were two months ago. If we have a missed payment thats not a grexit. Theres a period in which greece can sort itself out and perhaps do a referendum and if there is a referendum the greek people want a deal. Increasingly they want a deal and they dont like how the government is handling negotiations. Its likely that in the end well still have a positive referendum result to agree on a deal. As you just mentioned even if they do miss the payment on june 5th its not a default. Theyve got this grace period also but like i was just saying they can make a balloon payment at the end of june if they want to too but how do you think investors will react if they decide to miss that payment on june 5th . Particularly given the moves in bonds recently. People are still very sensitive. The chances of a missed payment is something investors are considering. I dont think its the base Case Scenario<\/a> but theres around a 40 probability of a missed payment versus a 60 probability of an agreement by june 5th. Now the imf could be flexible and say we could have a bundle payment or we could have a bundle payment later on but if that doesnt happen then missed payment could make spreads widen generally but we think its a small widening. Its a small sell off in italy and spanish bonds and 0. 5 in yields is what the investors are expecting. The bigger problem is that by the end of june you need a bigger longterm agreement because otherwise in july you start having ecb payments and thats a much more difficult thing to miss. The imf has a long grace period of two months before you actually have default but if you miss an ecb payment thats a little more of a political concern. I was at a dinner last night with a couple of Portfolio Managers<\/a> that said all it takes is one country outside of europe to signal Financial Cooperation<\/a> and youll see some question greeces Traditional Alliance<\/a> on europe. Do you agree . Is that possible . Im not sure. If you have one country outside of europe i think there are serious consequences. If you have a potential exit if thats the question then you challenge the irreversibility of the euro zone for the next decades. So there are serious issues. I dont believe in the bad apple theory where you can put a country out of europe or the euro zone and Everything Else<\/a> looks good. I think there are serious consequences in the next decade for other countries which could have similar difficulties. I want to draw our attention to the markets. Were looking at the german dax hitting session lows right now. You can take a look at european markets. Were trading lower on the last trading day of the month. Xetra dax at 11,529. Now down 150 points. Of course greece has been one of the reasons investors have been going long the markets, going short the markets but lets dream a little. If greece does reach a deal by sunday what would this deal or agreement really look like . Well this is the crucial question isnt it . In terms of reforms as alberto was just saying there. This is only about completing a program that they should have finished and come up with the reforms in the past. What are they going to do about the debt me tricks on sustain blt sustainability there. They want something bigger. Alberto, i want to ask you, if we incorporate greece in your base case ultimately and we do reach a deal here you say qe is still the biggest game in town. Credit to remain underpinned. Is there any kind of volatility and pull back in the coming weeks . An opportunity to buy as far as youre concerned . Were still positive on the market in europe as well. If there is some volatility on these negotiations headlines we would take more risk. Markets rallied a lot since the beginning of the year. So its a little bit more balanced but we have to remember that the ecb is still there buying 60 billion of bounds per month which is around twice any type of bond issued. So theyre buying two euro for every euro of bonds issued in the future and people that already own the bonds are not selling because, you know theres very little alternative. So for the bond market this environment of positive growth no deflation but low inflation is still positive for bond investors. You know greece theres a lot of discussion around grexit. I still think its a very low probability. So even if you have a missed payment. You have a referendum. Greek people want the government to reach a deal. So obviously i do believe that greek debt in the long run is not sustainable in the current form but its in everyones interest to reach a deal to buy time to have the longer term negotiation around debt relief which could happen in one, two, three years time after the reforms have been done. So will greece really strike a deal on sunday or is it just false hope from athens . If you want to join in on the conversation get in touch with us and email us at worldwide cnbc. Com. Tweet us at cnbcwex. But lets get straight to the markets. Were seeing markets move sharply lower over the last 20 minutes. Take a look at the stoxx europe 600 index. Down about. 8 as we did see equities lose steam yesterday. The slow progress taking place between greek leaders and its international creditors. Of course you also have the imf warning that a grexit could happen but the imf confirming that athens would be permitted to delay all of the june repayments until the end of the month. So thats where were set up in terms of heading into june. Lets take a look. The cac 40 down 1. 2 . The italian market down. This is the last trading day of may. Were almost halfway through the year and if you take a look at year to date performance, italy is actually the out performer. Up 24 year to date. The german markets seeing a gain of 18 . A lot of that having to do with Monetary Policy<\/a> coupled with the weaker currency environment. The euro of course holding on to 109. A quick look at the bond market. Interesting enough yesterday u. S. Treasury bonds strengthened driven by a strong auction. The bond volatility increased in april due to the sell off in the european bond market. But now yields stabilizing at 2. 12 on the ten year and in germany were looking at the yield at 0. 51 . Lets take a look at currencies still a big part of the conversation. Its one of the reasons european equities have been out performing. Euro holding on to 10966 against the us. Dollar. We saw the italian read at 0. 3 . Thats a look at how currencies are shaping up in todays trade but asia has been a big story given the sell off in composite yesterday. A little bit of a rebound today. Lets get out to sri in singapore with todays trading action. We saw very very sharp volatility and some very swingy moves in the market. We started off in negative territory in the market open and the market did drop. We started stable and then dropped about 4 . We saw rally and retreat so a lot of volatility and i dont think its over yet. Especially when you consider whats happening next week. Locally on monday we get pmi data. If its a bad number then the market will once again and this has been the paradigm for quite sometime will front run the idea of more stimulus an more easing. Lets not forget hsbc out with a note earlier this week doubling down on their stimulus and easing projections. So theres a sense in some circles of the market that theyre behind the curve. Bear that in mind. We have new ipos hitting the market. Thats going to bleed a lot of activity from the main board. We could see the market pulled a lot of directions and especially consider on top of that if that wasnt enough the external factors. June 5th this time next friday is going to be a very very important day for the Capital Markets<\/a> globally. Not only because payrolls are released from the u. S. But of course you and i know we have that june 5th imf Repayment Deadline<\/a> bumping up against that for greece. So expect a lot of volatility from the external factor to hit the china markets and asia more broadly next week. Its going to be interesting. Back to you. Have a nice weekend by the way. Same to you. Thank you so much. Coming up on Worldwide Exchange<\/a>. The race for space. Nasa reaches for new heights with a 30 Million Mission<\/a> to jupiters moon. We speak to nasas super star engineer about the project in the next hour. Another day and another mega chip deal potentially in the works. Reports suggest intel is near a deal to buy altera. Well bring you the details. Plus how do you spell scherenschnitte. The word that brought two to victory in the worlds biggest spelling bee. Thats coming up. I hate cleaning the gutters. Have you touched the stuff . Its evil. And ladders. Awwwwwww they have all those warnings on them. Might as well say, youre going to die, jeff. You hired someone to clean the gutters . Not just someone. Someone from angies list. But were not members. We dont have to be to use their new snapfix feature. Angies list helped me find a highly rated Service Provider<\/a> to do the work at a fair price. Come see what the new angies list can do for you. Welcome back. First quarter u. S. Gdp is expected to slip into negative territory when it was released before the market opened today. The u. S. Economy grew by a slight 0. 2 but now a survey is forecasting a 1 contraction. Thats what were expecting. Temporary factors, bad weather and port labor disputes at the start of the year plus a stronger u. S. Dollar hit exports while Softening Oil<\/a> prices hurt the major energy players. Industrial production posted its 6th consecutive monthly drop while durable goods dropped. 5 . Americans have been shopping less and for the past five months. Thats the type of data we have been getting over the past couple of months. Still with us is head of Macro Credit Research<\/a> at rbs. This First Quarter<\/a> gdp number has been under the spotlight given the mixed Economic Data<\/a> over the past couple of months. What do you think . Will we see a drop in gdp growth . And does that derail the u. S. Economy recovery . Definitely theres a softer trend, especially given the strong dollar and the weather but i think theres also some structural reasons. Imagine two scenarios. One where you have the 50 growing. We have a lot closer to where the recovery is very imbalanced and the Housing Market<\/a> as well. We see states where in fla afla where houses are down 20 or 30 . Other cities where theyre up 20 since the peek of 2007. The effect of qe and low Interest Rates<\/a> has been really imbalanced on the country in terms of the geography but also the different core tile of wealth in the population and i think the fact that some states in some parts of the population are in a very weak position theyre out of the work force for a long time, this is making the fed worried and a lot of these part of the populations are also very levered. There is over 1 trillion over 8 of gdp in Student Loans<\/a> so the fed hike is still in the cards for this year but its going to be really slow. This is a temporary blip in a strong recovery. It sounds worrisome at 10,000 feet. Yeah it is but it is also sign that Monetary Policy<\/a> can only do so much. In fact if you think about the level of growth we have compared to how much Interest Rate<\/a> versus been cut in Central Banks<\/a> something is broken. Its broken because theres not as much demand for credit. Households have been scarred by the crisis. Corporates are refinancing and buying back stock but not reinvesting or hiring as much. So the Financial Assets<\/a> have done well but the real economy is still lagging behind and this is a problem to solve with fiscal policy with reforms as well but not only with qe. Summer does not bring the rebound that many are forecasting. Im hesitant to even ask this but could qe still be back on the stable with the fed potentially look at unconventional monetary policies . I dont think so. I think were still looking at a hike in september but the trajectory after that is going to be slow. We saw the Vice President<\/a> talking about a 4 target for the fed funds in four years. That is obviously not something that anyone can forecast but if anything it gives you an idea that the lift off will be this year but after that you have a 1 per year trajectory which is probably the slowest we ever had but in europe where its worse, qe will last longer than the intended end date of september next year and potential you have more programs coming in. Theres an addiction now to qe measures. Well leave it there. Pleasure to have you on the show. Head of Macro Credit Research<\/a> at rbs. Still to come on the show wilfred joins us live from zurich. Indeed seema. Despite a corruption scandal, the 65th annual Fifa Congress<\/a> is underway behind me including the all important president ial vote this afternoon. All the latest from zurich after the break. Youre watching Worldwide Exchange<\/a>. European markets hit a session low as lending comes to a halt in april. This after the shanghai composite closes lower after an erratic day that saw shares dip into correction territory. Greek uncertainty weighing on sentiment. Imf chief Christine Lagarde<\/a> warns a grexit could happen. Officials are committed to helping athens reform. The commission is really dedicated to have greece stay in the euro zone. We have been even progressing more over the last three weeks than in the previous three months. French drug maker, cellectis one of the best performing stocks in europe on reports that pfizer has a takeover bid. In sports you have a beauty to change the face of fifa. These are the words of Sepp Sepp Blatter<\/a>. His speech was interrupted by protestors. European markets turning sharply lower after showing that it came to a halt in april. This after loan growth ticked up slightly in the previous month for the first time in nearly three years. Meanwhile the broad measure of money growth grew 5. 3 on the year and you can see markets firmly in the red right now. The xetra dax down 1. 3 . A triple digit move to the downside in the german markets. A good gauge of stocks across the euro zone. While were seeing the currency hold steady at 109 the euro sx toxx 50t stoxx 50 trading lower. Its at 10961. A very different story than last week where the euro hit a high of 116, 117 against the u. S. Dollar. Market volatility saw german ten year bunds rides a virtual roller coaster in may with prices settling down more than 3 for the month. Annetta joins us with more on the volatility and if it will continue. Thats the Million Dollar<\/a> question isnt it . Whether volatility is here to stay. Then you could have a profitable trade. Of course volatility yes or no is crucial for the ecb and their measurement for Financial Stability<\/a> and also looking at their monetary measures it is interesting that we just got that front loading comment from the ecb, the moment when that volatility bout was over. So one could argue, people are arguing actually that the ecbs also planning on yeah managing that yield curve going forward. Because volatility of course is a main concern to the ecb and when i spoke in a first on interview yesterday with the Vice President<\/a> of the European Central<\/a> bank i had to ask him also whether they think and he thinks that volatility on the bond markets was just one off or is that something that we need to get used to . Take a listen. It was a very significant correction. And a revision of perceptions by market players. Also about the fundamentals of the european situation. So i think that such a significant episode is not likely. Market always bound to have some volatility. Especially if some shocks occur. So its hard to predict but not of the same significance. How afraid are you or is the ecb that this kind of market volatilities might also hurt financial players . Well there were not many complaints after the recent event which means that many institutions were rather prepared or were able to absorb any possibility consequences. So in that sense it was not an episode that triggered stability concerns but one never knows what may happen down the road. He also said in that interview that the ecb implemented quantitative easing in the euro zone. Also means the risk from higher rates in the states and turbulences which might come from that in emerging markets into the euro zone actually is limited but he likes the phrase one never knows whats going to happen down the road. The ecb is prepared for more financial volatility in the month and years to come. Looking also at a potential exit strategy from that ultra loose Monetary Policy<\/a> over the weekend where we had the all important gathering. Mario draghi was also saying one has to be super careful in exiting that ultra loose Monetary Policy<\/a> stands in order to actually warrant more volatility on the market which then of course could hurt financial players and more and more risk of course is also amassed or gathered in the nonregulated shadow banking sector. So i guess were heading for more turbulent times. With that seema, back to you. Seems like factors resulting in elevated volatility in the bond market. Youre talking about a repricing of inflation given the rebounding in oil prices. And as you point out Central Bank Activism<\/a> which has had massive implications. Not just on the bond market. Currencies as well. Want to switch your attention to whats happening in nigeria. Youre looking at live pictures where nigerias new president is being inaugurated. Well get you more details as they emerge. Switching to sports Sepp Sepp Blatter<\/a> opened day two of the organizations congress by calling for unity ahead of a president ial vote. Wednesdays arrest of several officials on corruption charges caused a storm but they have the power and duty to change the face of fifa. Security please. Now as you can see right there blatters speech was briefly interrupted as propalestinian protestors broke into the stadium. Lets get out to wilfred tracking the story ever since it broke on what exactly happened. Wilfred over to you. Seema, thank you very much. That was a little bit of a protest, a palestinian protestor. One of the many items on the agenda is whether israel should be banned from fifa. That was an issue risen by the Palestinian Football Authority<\/a> because they claim that israel stops the Palestinian Football Team<\/a> from flourishing. In a Typical Congress<\/a> that might have attracted much potential. But they havent gotten much coverage because of a broader scandal that erupted over the last 48 hours which means the focus for almost everyone very much on the president ial vote which will take place at some point this afternoon. Of course he opened the Congress Moments<\/a> ago and still struck a defiant tone which has been annoying some people of course trying to distance himself from the criticisms that we have seen. Lets listen in. Translator id like to thank all 2009 football associations here with us today for sticking through an interesting agenda but also one that demands your active participation in getting to the bottom of these problems were dealing with today. So despite them the european Football Organization<\/a> to delay or postpone the vote and indeed from lots of sponsors it goes ahead this afternoon. We think in the middle of the afternoon, depending on how quickly they get through the rest of the agenda 206 delegates. 11 of which are suspended. 195 people voting. Now the european vote is 54 of that 195 and thats expect to be vastly in favor of mr. Blatters opponent but in the other geographical groupings he still commands amazing loyalty and support. Thats why hes the overwhelming favorite. I want to sum up with another quote from his speech moments ago he said the important point today is to move ahead and the important point is transparency. He thinks that can arrive even if he wins this vote. A lot of others say the only way we get transparency is if his challenge erwins which at the moment isnt looking likely. Thank you for bringing us the latest. Should fifas president Sepp Sepp Blatter<\/a> stay or go . Head to our website to have your say on cnbc. Com and that result is going only one way so far. Well get you more on the result of the vote as they come through. Switching focus to india, a heat wave in india killed more than 1100 people this week as temperatures soar above 116 degrees fahrenheit. Thats about 46 degrees celsius. The weather conditions also resulted in frequent power cuts with many complaining that authorities are not doing enough to restore electricity. So thats the story out of india. Now as more severe thunderstorms and flood watches are posted in parts of texas, we are getting our clearest look yet at the damage left by flooding. Nbcs Gabe Gutierrez<\/a> reports from texas. It was unstoppable. The wall of water bursting through the door. Gushing into a living room. Up ending furniture, rising in seconds. While a terrified woman keeps recording with her cell phone. We could actually see what looked like larges going down the river and it was peoples homes. Chuck lives in another home along the river. The water was going 500 Miles Per Hour<\/a> with debris just flying by. Today throughout texas, wild weather. Near houston, a family had to be rescued by boat. Ive never seen it like that ever this. Hundreds of residents evacuated fearing more storms through the weekend. Water gets high as my light switch in my home. So when they say flood, i know to go. So much rain has drenched texas over the past month it would be enough to flood all of rhode island under 10 treat of water. Its taking a toll where the female of 18yearold Melissa Ramirez<\/a> just held her funeral. She was on her way back from prom when her car was swept away. I got a phone call from her at 2 45 in the morning. When im asleep and she wakes me up and i say honey whats going on. She said dad what do i do . My car has been hit with water what do i do. I said back the car up. She said i cant dad, my car is tipping. I said im on my way. Thats the last i got to speak to her. Theres so much devastation across parts of texas tonight. Authorities say they have recovered the body of a young child but it has not been identified. More rain is expected to slow the search effort here through the weekend. A very sad story out of texas. Still to come on Worldwide Exchange<\/a>, if smartphones to smart watches, now its all about dressing smart. We bring you a live interview with the ceo of athos apparel from the pioneers tech conference in vienna. Thats coming up next. Dont go away. All right, welcome everyone. Youre watching Worldwide Exchange<\/a>. Lets look at the stocks here on the move in europe. The french drug maker moving sharply higher today. Right now up 3. 8 on a report in the Financial Times<\/a> that its in talks with a few suitors for a sale including u. S. Drug giant pfizer. Pfizer reported a deal valuing the firm at 1. 5 billion euros. Lets move on afren at the top of the index after securing Additional Debt<\/a> funding. They will use the funds to develop core assets. The swedish builder has a project to build a new terminal at the airport in new york. Up almost 2 . Lastly i wanted to take a look at voda phone shares ticking higher after selling a stake in the indian cellular operator for 2 billion. This after suggesting some of the biggest investors are open to a tie up with u. S. Media giant liberty global. Swatch announcing plans this week to launch its own version so whats the next smart phenomenon thats set for a success . Tech start up athos is betting on smart clothing. Lets get out to louisa who is live at the pioneers tech conference. Over to you. Hi yes, fantastic being here seema. So much going on and so many things to look at. Its like a kid in a candy store in terms of being taught stuff you didnt know or seeing things you didnt know existed. You mention this company. Welcome d. J. What do you do . Well we build the worlds first smart clothing that can measure what your muscles are doing in real time. We take all the stuff and build it into clothing. You dont have to do anything else. You put it on and go to the gym and workout. What does it tell me . We take all of this information and tell you how youre working out. Are you using the right muscles . Are you working out as hard as you should be working out. If youre doing a squat, should you be able to do more weight . Are you using the right muscles . Using your quads and glutes. Theyre giving you the awareness. It measures things like heart rate and breathing and things like that. Yes on top of just the muscles we do breathing. Thats the easy stuff for us because its so hard to capture whats going on with the muscles because we have this comprehensive picture of what youre doing. We understand what youre doing as well so we get a really complete picture of whats going on. I saw that you produced smart pants or for english audience i should say smart shorts. So how would it work . How does the Technology Actually<\/a> work . How does the shorts look . They look like regular compression shorts like youd wear for cycling or that you buy from under armour. They have a science thats been studied for like 60 years in research and its used to understand what your muscles are doing. Its used in all the top performance institutes. These machines cost about 16,000 dollars and its a big mess. You cant really go to a gym with them. We took the same science and build them into the shorts. So they sit on the different muscles and they sense whats going on inside your muscles and it gets collected and understood whats going on and sent to your phone where it goes okay this is what is all going on. Let me understand whats going on thats relevant for you and give you something that you can take action on. How do i improve from this set to the next set. This is something that top athletes use and youre now making it available for the masses, right . Yes. How much does Something Like<\/a> this cost . The price point is low. Its only 99 for any piece of clothing. Its the same price youd pay for high end compression gear or lululemon. All of these other brands. Whats the price range . 99 and the piece of hardware is 199. Okay. So its like the same price as regular clothing. It feels like clothing. It looks like clothing and you can perform in them like clothing except you have all the other benefits of knowing whats going on and you can perform a lot better. Which items exist now . The shorts capris for women and top for men and women. Cutoff at the legs. Maybe viewers dont know what capris for women are. Sorry. If these things are so smart, why havent i met these on people. Its mostly shipping in the u. S. And we just started shipping to customers. We have been on preorder for about a year so just generating early demand while we figure out how to manufacture. Now everything is rocking and were shipping out to customers and well be available in the u. S. For the first part and overtime well be coming to europe as well. How big is the company now . 48 people right now. Youre 25 years old; is that right . Im 25 years old. 25 years old. So anyway for those of you watching out there, what did you do when you were 25 . Well hes making your shorts think, seema. I used the line on you i said Something Like<\/a> well chat. Its not Rocket Science<\/a> well have the conversation. You said dont use that line on your next guest because he is actually a Rocket Scientist<\/a>. Thats coming up. You know him right. Yeah. So well be speaking about space. Mars missions things like that way real live Rocket Scientist<\/a> thats really young and super cool. Love it. Thank you for bringing us that interview. Now smart fashion, is that an opportunity . Lets bring in our next guest and ask that question to julie myer, pleasure to have you on the show. Good morning. So you just heard that interview with athos, a Company Looking<\/a> at imbedded devices in our apparel. Is that an opportunity youre looking at . We see about 200 opportunities every single month so we see definitely things in fashion, data plays for fitness and so forth. The companies were focussing on are still in the content space which is about creating from your home, making it the hotel you never want to leave and also Retail Technology<\/a> which is also using data to convert browsers to purchasers and so for Companies Like<\/a> tag star in the u. K. Which is working with shop direct, all of the major retailers helping them to seriously convert browsing into shopping. Its a messageing platform built off the data of your activity online. Its tied to the Retail Technology<\/a> space. Do you see Artificial Intelligence<\/a> put into this strategy of making the consumer smarter and the retailer understand better what their consumer is looking for . Absolutely. Whats happening with Artificial Intelligence<\/a> is its becoming part and parcel of whats coming out. Were seeing that across the board. Three years ago you would see an ai start up approach you and now thats being integrated into a lot of the start ups that come from funding. Its amazing the data overload. The question is which companies are are doing a good job of managing that data and giving retailers the data print that they need to make better decisions. I would say the big game change thats coming is if it really is our data then which companies are going to break ranks and start incentivizing and dare i say, accruing revenue to the individuals. The users for the use of their data. Because if it is our data whether health genetic, et cetera its not about incentivizing us to use the products more. We have a claim to the revenue which is driven from our data. We should but thats been an active discussion with even google using our personal data out there and selling it to advertisers. This is what is behind entrepreneur countries. We run our Venture Capital<\/a> firm but were helping them build the future from the future. We start an entrepreneur country with the fundamentals of the future and one of those fundamentals is anticipating the legal status of data being owned by the individual and cost of sale and accrueing back to the individual. Taking a step back and looking at the tech landscape, you know last year 2014 i feel like the focus was really on the innovation coming out of Silicon Valley<\/a> but the last couple of months youve seen more International Investors<\/a> actively looking for opportunity here in europe. Where are you seeing opportunity across the landscape here . Weve been in europe investing across the continent for 15 years and im glad to see more people coming to europe wanting to invest. The investment thesis is fundamentally different across europe. I think of it as the first born child verses the later born child in Silicon Valley<\/a>. Its nice to have a lot of money and to be able to blow up things but what were good at here in europe is not disruptive technology. Were good at enabling and extending ecosystems. Creative destruction is meant for the benefit of users but we care about employees here as well. Its much more focused on the social welfare state and about enabling and extending rather than disrupting and europe doesnt tend to create if you think of uber at the precise moment it was created in Silicon Valley<\/a> if we had a similar entrepreneur of the same caliber with the same access to capital enabling the taxi industry with the same amount of capital but we never are in that situation to do an ab comparison. So were simply later so its in the investment thesis has to be about a c to b model which is more capital efficient and enabling and extending ecosystems rather than disrupting them and rebuilding them. If you listen to the investors they think that bitcoin tomorrow is going to challenge the pound sterling. Its going to be additive. Of Course Technology<\/a> is going to be massively important in the next couple of years but theyre not going to threaten our currencies. A pleasure to have you on. Fascinating discussion around tech. Michael jacksons former home is on the market. Neverland ranch is listed for 100 million. The proper any california has been in limbo since his death in 2009. It features a train session, six bedroom house and 50 seat movie theater. Jackson bought it for 19. 5 million in 1988. More on this story as well as more coming up on Worldwide Exchange<\/a> on the back of this commercial break. Welcome to the second hour of Worldwide Exchange<\/a>. Here are your headlines. Down but not out. Fed worries weigh but major indices are still on track to end may in positive territory. Pfizer reportedly approaches french drug maker cellectis with a take over offer worth 1. 6 billion. It could be one of several suitors. A potential 15 billion deal. Thats after they shunned intel just last month. Im staying put says fifas chief. Sepp blatter is interrupted by protestors as he speaks ahead of a closely catchedwatched reelection vote. Its the last trading day of the month. Can you believe it . Were already halfway through. Lets take a look at u. S. Futures and what you can expect in todays trade. End of the month buying could be the case. At this point that doesnt seem to be the case. Were looking at the dow down 47 points in premarket trade. S p 500 down 3. We should point out that markets despite the volatility over the past couple of weeks are on track to end the month higher as well as year to date the dow up about 3 . The nasdaq really the out performer up 7 so far this year. But what about europe . Of course the big story this year has been the out performance of european equities versus u. S. Equities. That continues to be the case here on the last day of may but as we are look at the indexes in todays trade sharply lower. The xetra dax coming off the low of the day. Still down triple digits. The cac 40 trading down. The italian markets basically holding on to the flat line at 23,000 732. The underperformer in these four indexes year to date is the ftse 100. The index only up about 7 so far this year where as the ftse mib up better than 24 . So big moves in europe but of course a fixed income market has been a point of worry, concern if you will for investors given the sell off that we saw just a couple of weeks back. In the past week we have been seeing stabilization in yields. 2. 13 . A sharp contrast to the month of april. U. S. Treasury bonds strengthened driven by a strong auction that sent the yield to its lowest level in more than three weeks but you know what experts say be ware of further volatility in the bond market with the feds intention to potentially normalize rates in the fall and perhaps september. What are we seeing currency is not moving a whole lot this week. The euro holding on to 10959 against the us. Dollar. Usd versus the japanese yen which is a big story. The yen hitting its lowest level since 2002. Thats one of the catalysts behind the rally in japanese stocks so far this week. Another positive session actually over in the nikkei overnight. The aussie dollar is holding flat. Lets get you a run down of what to watch. The second reading on the First Quarter<\/a> gdp is out. Forecasts call for a contraction of 1 versus the previous estimate of 0. 1 growth. At 10 00 a. M. We get the final report on macon assumer sentiment and chicago pmi. Today as we have been telling you is the final day of trade in may. Lets take a look at how markets are shaping up. The nasdaq is the lead up almost 3. 2 since april. The dow and the s p are up less than 2 and in terms of sectors, yes, its bio tech and semi conductors have been the notable out performers with the index tracking for its best month since august. Currently up 9. 36 . The dollar has risen to heights not seen since november of 2002 this week versus the yen. The green back is now poised to end in the green which means ten out of the 11 straight months of gains. Lets talk more with Andrew Berkeley<\/a> manager director and head of strategy at oppenheimer and co. How are you doing this morning . Good thank you. Do you think the sell off could potentially come this summer . Will we see a june swoon if you will . Potentially. We have come to get used to the small modest corrections over the past two years. They have been in the range of 3 to 5 and you want to be buying those each time and the rallies are healthy and pretty good leadership. Underlying fundamentals still strong. We dont expect much of a big dip. We think any little modest pull back you want to keep allocating money too. Its one term mentioned in many investor notes this week. We saw a sell out yesterday but its come back today. Is there a little bit of irrational exuberance . Theres pockets that rallied a lot. Its up so big over the last year or so but when i look at the u. S. Market when i look at overall valuations they have above average and theyre kind of pushing the upper end of the range weve seen over the last ten years on a pe basis but if you go down by sector by sector whats very interesting is it continues to be more of the defensive bond proxy type sectors where the valuations are the most stretched and if you look at areas like industrials or even technology, most trade at discount to the overall market. Some of these offensive areas i think theres a little bit of catch up. Thats going to be predicated on Economic Activity<\/a> and growth accelerating. Were going to talk about gdp potentially contracting in the First Quarter<\/a>. We have been in a 2 recovery for a long time. Thats what kept the cyclical areas on a valuation basis. So i think that could potentially be a driver for the next leg of the bull market is actually underlying fundamental Economic Activity<\/a> picking up in some of these areas like machinery for example and industrials doing better. You mention that u. S. Gdp number. How do you expect markets to respond . Is bad news good news for stocks . You know the longer we progress without really reaccelerating the more likely it is that the fed potentially doesnt even do anything this year or pushes them all the way back to december. Here we are in the middle of the year in june and we havent seen much of a rebound even in the near term data. Just very recently we have. Its starting to pick back up. But negative data is probably better because it pushes those expectations out further. All about that policy rate hike. Im getting tired around that argument about whether the fed will raise rates or not but at the end of the day thats considered to be the big market mover. Andrew, were going to leave it there. Have a great day. Andrew berkeley managing director and head of institutional strategy. Another story moving markets is greece. More mixed messages. Imf chief Christine Lagarde<\/a> warned a grexit could be possible as the country struggles with his debt burden but would probably not mean the end of the euro. Meanwhile the greek government hopes to wrap up cash for reform negotiations with its lenders by sunday but the eu dampened hopes saying some issues remain unresolved before the final 7. 2 billion in loans can be released. Greece may have dominated talks at the g7 finance ministers meeting but theres been plenty of other discussions with multinational tax arrangements high on the agenda after amazon agreed to amend its practices. Lets get out to steve who has more on that story which of course has been a heated debate as to whether european regulators are clamping down on multinationals and if that will result in europe becoming a less flavored destination for Companies Like<\/a> Amazon Google<\/a> and even book. Yeah, seema, we have a mighty task over the next three minutes and so. We have to make tax sexier than greece and the other stories out there. All of our u. S. Viewers know about the tax inversion strategy. People at apple are ragz money with bonds and yet they have billions of dollars in cash which they cant spend domestically because they have the money overseas and they dont shift it over. We need tax reform left right and center. Its also been a major hot potato because the inequality debate picked up and not paying their tax has been a huge issue. The double irish. Its a big issue. So they is been driving, pushing the u. S. Corporates pushing International Corporates<\/a> to pay more tax. And they have an acronym which means base Erosion Profit<\/a> sharing and its all about pointing the finger at the corporations saying you have to pay your fair share of tax in domestic jurisdictions. Actually he disagreed with me. He said its not about pointing fingers. Lets listen in. This is not about pointing a finger at anybody. Its exactly about pointing the finger at people isnt it . No its making sure the multinationals are not double taxed but also making sure that the multinationals do not engage in double nontaxization. Okay . So we expect them to pay once and then of course ideally and mostly in the places where the profits are yen rated. Of course theres some accommodation for intellectual Property Rights<\/a> and brand issues and stuff like that but that should not be abused. Right now what you have is many of the companies, the multinationals pay very very little taxes or once the base has been reduced enormously then they pass it to a lower Tax Jurisdiction<\/a> and end up not paying taxes everywhere. Im not saying this is the case of every Single Company<\/a> and already were seeing rather encouraging signs. Amazon yesterday or the day before announced they were going to have a new corporate set up where each Company Operating<\/a> is going to be paying taxes. Thats a whole philosophy. So you know i think were moving the right direction. Were going to come out with the final accommodations in september. Theyre going to be approved in october and then were going to pass them to the leaders and in 2016, 2017 implementation implementation implementation. And the u. S. Is on board. Of course. Absolutely. Secretary lew is a very enthusiastic supporter. There you go. Theres the first conclusive proof that they talk about other stuff other than greece. Its not going to buy or sell them tomorrow on the back of the story. Youre not going to do it over the next few weeks but it is coming down the pipe. Jack lew is is behind this as well which means corporations have to watch where they pay tax and possibly could have to pay more. Back to you. Well see what happens overtime we could see some corporations question whether they want to expand into europe and whether that will result in a derailment in the type of mna we have been seeing cross border, steve. Possibly. Thats a sad thing though. Your big investment banks advising people to do a deal for tax reasons. Its been poor form that if tax assertion is the only reason you do a deal thats pretty pathetic. Theyre Investment Bankers<\/a> and they would never admit that. They say theres another role of rational. So i hope they do the deals for the right reasons. Im sure they will. Well see the repercussions in a couple of years time. Thank you so much. I want to draw your attention to headlines coming from the chinese central bank. It will fine tune Economic Policy<\/a> in a timely fashion and it will keep liquidity at reasonable levels and also reduce a high cost of credit for companies in a targeted manner. Now of course we have been keeping a yooneye on the shanghai composite. Investors have been betting on further Central Bank Intervention<\/a> to stimulate the economy. Yesterday was an interesting session in china. We saw a drop around 7. 5 in the shanghai composite. Ending lower in todays trade but we should point out that this has been a market that has really been on fire. So far the shanghai composite this year up 47 . Raising some fears that there is a bubble brewing in the chinese stock market. We will keep you up to date on the story out of china. Lets take a look at some of the other top stories at this hour. Intel is reportedly near a deal to buy altera for about 15 beside. Billion. Intel could pay as much as 54 a share. A 15 premium to the Closing Price<\/a> on thursday. It would be the largest ever acquisition slightly lower in todays trade. Altera up 7. 8 in frankfurt. Switching to health care french cancer drug maker cellectis is in talks with several suitors including including pfizer. Theyre valuing it at 1. 6 billion. They already known a 9. 5 stake in the company. Now separately the fda approved a pfizer drug to treat a rare form of lung disease. Taking a look at how shares are trading, pfizer flat. Cellectis a big mover in france seeing a move to the upside. Coming up on Worldwide Exchange<\/a> a few bad apples sepp blatter says its only individuals that are corrupt and not the whole organization. The latest is coming up. Dont go away. Welcome back. Fifa president opened day two of the congress by calling for unity ahead of a president ial vote. Wednesdays arrest has caused a storm but they have the power and duty to change the face of fifa. The question is wilfred frost, can they change the face of fifa if sepp blatter remains president . Well, seema, its exactly the question that everyone is asking. Ill just go straight into a quote that sepp blatter said earlier. He said the important point today is to move ahead and the important point is is transparency. Can they move ahead if he remains at the helm . Regardless of attempts yesterday by the European Football Federation<\/a> to delay or even abandon the vote at the moment because of these utterly extraordinary allegations that fifa has faced in the last couple of days, as you said the vote goes ahead this afternoon and at the point, the president sepp blatter remains favorite. He continued to try to distance himself and fifa the organization from these allegations highlighting that those accused are just certain individuals. Nine fifa individuals and then a further six people from outside of fifa. Lets listen to him summing up that point. Translator because those that are behind this are those truly at fault especially if they are convicted or found guilty. These are individuals. And they are not the entire organization. These are certain individuals that lost sight of the fact that our game is based on discipline respect, sportsmanship and that its a team sport. A team sport in which Everybody Needs<\/a> to aim at the same goal needs to sing from the same song sheet. So the vote goes ahead this afternoon. President blatter surviveds through far. He thinks he can survive further. And fifa can reform with him at the helm. Many other calling for a new leader. But at the moment that seems unlikely. Thank you so much. Still to come on the show well be speaking to nasas mohawk guy. Were joined live from the pioneers tech festival in vienna coming up in two minutes. Shopping online. Is as easy as it gets. Wouldnt it be great. If hiring plumbers, carpenters and even piano tuners were just as simple . Thanks to angies list now it is. Weve made hiring anyone from a handyman to a dogwalker as simple as a few clicks. Buy their services directly at angieslist. Com. No more calling around. No more hassles. And you dont even have to be a member to start shopping today. Angies list is revolutionizing local service again. Visit angieslist. Com today. Fly me to the moon. The white house has approved 30 million of funding to nasa for a mission to europa. Thats the icy moon orbiting jupiter. Its one of the most likely places in the solar system that could support alien life. For more on this story, louisa who is live for the pioneers festival. Hi, seema. Lets just repeat that. What you just said. Jupiters icy moon with a sub surface ocean. Let me get the master himself to exmain what this is all about. Hes a Systems Engineer<\/a> from nasas jet Propulsion Lab<\/a> which i dont know what that means either. It comes from the time when we were building the early rockets and the early engines. Now what we focus on is Robotic Exploration<\/a> of the solar system and universe. What is it about and why do you want to go there . Its jupiters second large moon. Its about the size of our moon. What makes all of this study of icy worlds fascinating is we learned these are really viable places for habitability. The question of could life exist elsewhere in the solar system. Thats an important question for a lot of us but europa is impressive because of these conditions and chemistry and warmth. All the things we think of as necessary for life. How would it work . You cant actually land in it . You have to fly by and then what do you do . So one of the tricky things about this is we dont know all the details. We know that theres probably an ocean below the ice. We dont know how thick the ice is. We cant get there so theres also the concern of if youre looking for life you dont want to be the one to bring it with you. So you have to understand would earth life survive on the surface. These are technical issues. The first step is to understand europa and map it and were looking at a mission that would fly by europa 45 times and over the course of two to three years map out the thickness, measure chemistry and look for all the little details, Magnetic Fields<\/a> competition that would add to our understanding of habit habitability and hopefully leave to a landed mission. Youve done this before. The curiosity mission. The mars curiosity mission. Thats what really put you on the map so to speak. On the space map and you instantly made nasa cool. First of all, being involved in the mars mission, how was that what was that like . And also especially with the time delay. Theres a 14 minute delay; is that right . That was a nine year personal story to get from the time it was on paper to the time that we saw it on mars. The experience of landing it i mean, i dont have anything else in life that really compares to that. I imagine if i had children that would have been a very similar Emotional Experience<\/a> of seeing your child succeed in some way. Finish college and go out into the world so its a very personal moment. Its also personal because we shared it with a community of people that worked hard to make it happen. This tremendous team of people. So thats why it was a very emotional moment but its also very stressful as you noticed because it has to be done aon the autonomously. You get a 28 minute round trip. I read somewhere that even after you landed the probe, its already landed the rover. The rover. That happens seven minutes youre seeing it. Yeah from the time that we hit the top of the atmosphere meaning the start of that sequence of events by the time we heard the first signal from that it had already been done for seven minutes so its like taking the biggest test of your life and waiting 14 minutes to find out the results. Do you think enough is being done to encourage kids the next generation to become scientists or engineers . Theres a lot being done and theres a great deal that people have focused on and they have brought the modern ideas of how to educate and excite kids about these things. Culturally id like to see science and engineering at the level that sports and engineering does but i dont want every kid to be an engineer or scientist. Its not for everybody but what we can do is help people use the principles of science and engineering, the thought process to be critical thinkers. So understand that the world is rapidly changing around them and well need a young generation to tackle the global challenges. On top of this you have been called the sexiest nerd at nasa. Youve been called the hot mohawk nerd marriage proposals after the mars mission. How does that feel . To be in the limelight like that . Its very flattering. No one goes into engineering thinking thats what is going to happen in their life but, you know, im always it does make me happy that people resinate with an individual or person at nasa because as much as these robots are incredible achievements, what helps us connect to the world at large is making personal connections and if they feel like they can reach out via twitter, hopefully to ask questions about what makes them interested in the world and we can help thats fantastic. All the other guys at nasa theyre like now i have pressure. I need cool tshirts i need to get with the program. We have a lot of very stylish people at nasa. The most important thing is that people realize that science and engineering today we look more like normal people than you would imagine. You wouldnt know who worked at nasa and who didnt. I probably wouldnt. Youre right about that. Thank you for being with us. Seema, so maybe i hope that we have struck some curiosity about going into space with some of our viewers. Would you want to go to space . If i had the money and opportunity. You would go. In a heart baitbeat. Of course hes going to say that. I love earth and my friends and family. I want to make sure that im getting pack. Thank you so much. Making space cool. Well leave you with a look at futures and how theyre trading ahead of the open on wall street. Red arrows across the screen. This is the last trading day of the month. Can you believe it . Dow down 57 points. More coming up after this. If you want to succeed in business, mistakes are a luxury you cant afford. Thats why i recommend fast reliable comcast Business Internet<\/a>. They know what businesses need. And theres a nomistake guarantee. If you dont like it, you have thirty days to call and get your money back. With comcast Business Internet<\/a> you literally cant mook a mistick. I meant to say that. Switch today and get the no mistake guarantee. Comcast business. Built for business. China central bank pledges a Healthy Development<\/a> of the stock market after another erratic session on the shanghai composite with stocks dipping into correction territory. Pfizer approaches french drug maker cellectis with a takeover offer but it could be one of several suitors circling the company. Im staying put. Blatter speaks in europe ahead of a closely watched reelection vote. Thank you for joining us here on Worldwide Exchange<\/a>. Heres how the markets are fairing ahead of the u. S. Open. Investors did not sell in may and go away. At least at this point. Financials and health care are the leading sectors but the bull run may be drawing its final. The dow with a lower open by 54 points. The nasdaq down 15 points. I want to point out year to date performance, the nasdaq is the big out performer. Up better than 7 . A lot of that having to do with apple shares as well as bio tech and semi conductors thanks to the big deal we saw. Lets turn our attention to european markets. We also got a disappointing read on greeces economy. Lets also take a look at the other top stories as we were telling you. Intel is reportedly near a deal to buy altera for 15 billion. The New York Post<\/a> says intel could pay as much as 54 a share. A 15 premium to alteras Closing Price<\/a> on thursday. It would be the largest ever acquisition. Taking a look at price action intel down about three quarters of a percent in frankfurt. The french cancer drug maker is in talks with several suitors including pfizer. Pfizer approached the company about a takeover valuing it roughly 1. 6 billion. Now cellectis signed a deal with pfizer last year to develop immunotherapy drugs. Pfizer owns a 9. 5 stake in the company. Now separately the fda approved a pfizer drug to treat a rare form of lung disease. Taking a look at these two stocks, pfizer up about. 2 in frankfurt but cellectis is a big mover in france. Fuld has spoken in public for the First Time Since<\/a> the banks collapse. Our own kate kelly has all the details. Im here in midtown manhattan where the former chairman and ceo of Lehman Brothers<\/a> has spoken publicly for the first time in seven years about the financial crisis and what he has been doing since then. Two key components, first his after thoughts on the bank runruptcy of Lehman Brothers<\/a>. He talked about mistakes he made. Missing the spread of contagion from one asset class to another. Perhaps misgaugeing where things stood and imlying they had fallen prey to other agendas but without elaborating on who and why. He also talked about todays economy in his capacity as a Strategic Advisor<\/a> with mna and others that they make. The need for liquidity is still omni present. In order to keep margins intact. He talked about geo political risks whether its isis or russia or slowing growth in china. A lot of interesting thoughts from him. Lets take a listen to the key components. The income gap, income inequality. I know you dont want to hear this from me. The wealthy are getting wealthier. Im a hardcore capitalist. Lets be fair capitalism only works if it starts in the top and filters down. If it doesnt get down were going to lose. You can see hes very much focused on the current picture and the future although he did say as well not a day goes by that he doesnt think about Lehman Brothers<\/a>. Back to you. Our special report. Moodys is feeling positive about four of the biggest u. S. Banks while jp morgan may be slimming down. Good morning. Theyre upgrading their ratings. The agency determined that some creditors would suffer big losses if they fail. Morgan stanley got a two notch upgrade after moodys Business Model<\/a> is more stable and profits increased in recent quarters. Jp morgans ratings are unchanged because the bank relies more on deposits on funding. Theyre cutting about 5,000 jobs over the next year or 2 of the work force. The cuts which already started are broad based but mostly from consumer banking. They come as jp morgan overhauled the 5500 u. S. Retail bank banking. Jamie diamond told an Investor Conference<\/a> this week the average bank would lose one employee. Mostly through attrition. They trimmed the overall head count in 11 of the past 12 quarters. It cut 7500 mortgage jobs and exited several businesses. Shares are down more than 1 in europe. Back over to you. Happy friday to you as well. All right. Coming up on the show Worldwide Exchange<\/a>, a few bad apples. Sepp blatter tells fifa its only individuals corrupt and not the whole organization. Well get you the story live from zurich coming up next. The network that monitors her health. The secure Cloud Services<\/a> that store her genetic data the servers and software on a mission to find the perfect match. And the mom who gets to hear her daughters heart beat once again. Were helping organizations transform the way they work so they can transform the lives of the people they serve. Welcome back. Fifa president opened day two of the organizations congress by calling for unity ahead of the president ial vote. Blatter said wednesdays arrests of several officials caused a storm but told delegates they have the duty to change the face of fifa. Day three in the fifa scandal and i learned much more about the game of football than i ever knew in the last 72 hours. Bring us up to speed on the latest developments on the fifa scandal. Thanks seema. You called it football which i liked. I was about to call it soccer because a lot of our u. S. Viewers joined us. But either way the last three days for the world of soccer can only really be described as utterly extraordinary and yet the Fifa Congress<\/a> continues as planned behind me. One of the reasons its able to continue is theres just a few individuals that face these charges from the u. S. Department of justice. Hes been able to shrug off complains by the European Organization<\/a> and threats from his spontaneous source. The plans to delay the congress and the congressional vote with it and he has been defiant as ever despite these accusations. That means that the president ial vote goes ahead. Before that we have to get through the rest of the agenda of the congress which i must say is breathtakingly dull. Theres a few important items on it but they to get through them slowly, the names of people took 20 minutes so its ticking loong but slowly well get to the important president ial vote in four hours time. 209 delegates will be voting. Six geographical splits of voters. The European Federation<\/a> they have 54 votes and its likely that the vast majority of them will vote against president blatter in favor of prince ali of jordan. But across the other 5 of 6 regions its still assumed that he commands resounding support. So if he were to lose today it would come as a huge surprise to the world of football. Seema, thats the latest from here in zurich. Quick question if he does get reelected as president , whats the likelihood of his resigning sometime in the near future . Well from past experience he has been the last couple of days the chance of that is zero. The fact that the vote is going ahead at all shows the sign that hes not prepared to stand down. His previous friend now potentially enemy who is probably the next most powerful man in the world of football. Hes the head of the european confederation. He tried to get blater to stand down in the next 48 hours. He tried to get blatter to delay the vote. He is going ahead with the vote and if he wins that means we have four more years of him. The question is can fifa change its image with him still at the helm. The immediate question in a couple of hours time is that president ial vote. Thank you so much. And now we want to get your thoughts. Should he stay or should he go . Head to our website to have your say in our poll and as you expect that result is only going one way. And as we head to break, lets get you the headlines. U. S. Markets set to close higher on the month despite fed driven volatility. Pfizer approaches french drug maker cellectis with a take over offer and intel could snap up altera according to the New York Post<\/a>. More coming up after this short break. China central bank vowed to promote a Healthy Development<\/a> of the countrys stock market. This after another erratic session with stocks dipping into correction territory. The pboc added it does see some potential risk in stock margin trading which has been blamed for the wild swings. Now on the year chinese stocks are up over 40 . Definitely one of the out performers when looking at emerging markets. Lets turn our attention to whats happening in europe because the economic reality facing greece is that they are running out of cash and this imf payment is approaching so the greek headlines, the reality facing greek leaders is one of the reasons stocks are moving lower in todays trade. We also got tepid growth out of italy. 0. 3 quarter over quarter. The ftse mib trading at 23,657 down about. 4 . More mixed messages on the developing situation in greece as we were just telling you. Imf chief has warned a grexit could be possible as the country struggles with its debt burden but it would not mean the end of the euro. Meanwhile the greek government says it hopes to wrap up cash by sunday but the eu dampened hope saying some issues remain unresolved before the final 7. 2 billion euros in loans can be released. Steve is still at the meeting speaking to leaders on what they think the fate of greeces financial situation will be. What do you think . Will we get a deal by sunday . I tell you what i think. These are possibly going down as the worst set of negotiations in the history of the euro. We have only had a euro for about 15 years or so. I just read how plit the creditors are with each other and actually an unnamed government source from one of the euro zone creditors apparently blaming the commission now for muddying the waters. I have been speaking to the commission today and this unnamed source was accusing him from the commission and pierre from muddying the waters by offering olive branches to the greeks without getting firm reforms from the greeks in return as well. The commission have gone back to their detractors who are unnamed and said if we werent bridging the gap between the creditors and the greeks between the greeks and the imf and greeks and ecb no one would and the possibly could be greater. You have a situation where theyre fighting among themselves and then you have the imf who is saying oh theres a possibility, isnt it that greece could go out of this. Of course its a possibility. Its a possibility that anything can happen. Even you winning that lottery and not giving me any money. I would quite possibly say this is definitely the worst set of negotiations yet. A lot of talk but no progress. Steve, thank you so much. Lets get you a run down of what to watch this trading day. Second reading on First Quarter<\/a> gdp is out at 8 30 a. M. Eastern. Forecasts calling for a contraction of 1 versus the previous estimate of 0. 1 growth. At 10 00 a. M. The final report on macon assumer sentiment and chicago pmi. Lets discuss more with elan. Good morning to you. The headlines have been a little dramatic. U. S. Recession is on its way. Recession fears ahead of gdp print but lets be fair here economists generally define a recession as two straight quarters of contracting gdp, thats right. Yeah thats exactly right. I mean everyone agrees that the First Quarter<\/a> the economy hit a pothole. The big question is are we actually driving into a ditch or can we recover from this . The disturbing thing is that the Second Quarter<\/a> gdp is not looking that great. Atlanta fed gdp tracker showing a. 8 growth rate for the Second Quarter<\/a>. What we have seen in previous quarters in the recovery is a one quarter contraction is that the Second Quarter<\/a> provided a really big snap back so it was clear that things were getting better. You look at the last time this happened last year. Third quarter gdp was 5 so it was clear that the u. S. Recovery was back on track. This time were not seeing that. That makes folks so worried. The pace of job gains have weakened. A lack of wage growth. Are economists overly confident that this rebound is going to come this summer . Theyre not actually. I mean thats the problem with the Second Quarter<\/a> is that it is looking so sluggish and the fed is still pretty confident that the second half of the year will be a little bit better. Janet yellen expects the rates to be able to raise rates later on this year. But one thing the fed forecasts is theyre often long wrong. So they believe the fed is going to ploouf at a lorer pace than its anticipating. The futures and where the Feds Fund Rate<\/a> will be is lower than the feds own estimate so folks are betting that the fed will move later than it wants to and more slowly than it wants to. Will this summer play a Critical Role<\/a> in deciding whether to raise rates in december or even september . The june meeting will be an interesting one. We heard from richmond fed president one of the biggest hawks on the committee right now. He said that he is not sure whether it would be the move. He is calling for the earlier rate increase. So the fact that he is questioning the june time line or date for any rate increase shows you how much the committee is rethinking the trajectory of the economy. Lastly how much do you think the stronger dollar will be referenced in todays gdp report . The gains have moderated now. That seems to be something that the fed has written off as sort of the noise factors in q1 and not something that will be as much at play going forward. Well leave it there. Lets see what happens. Pleasure having you on. Financial reporter at the washington post. And as we end the show lets take a look at european markets. We are firmly in the red. Xetra dax down 1. 3 . Hopeful come menls fromments with athens. Theres not much progress when it comes to the greek debt talks. We should point out Consumer Confidence<\/a> came in much lower than expected. So negative trade here in europe. U. S. Futures also pointing to a lower open. The last trading day of the month. That does it for us here on the show. Thank you for joining us here on Worldwide Exchange<\/a>. Next up is squawk box. Have a great day. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. 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