About CNBC Squawk Box (Asia)

---

CNBC Squawk Box. Anchored by veterans Martin Soong and Karen Tso, the new "Squawk Box" continues to be the jumpstart on the business day for the corporate and financial communities. CNBC's signature show is better than ever, providing viewers with the edge to stay ahead: breaking news, connecting with newsmakers and chasing the hottest stories, as well as the ones that aren't hot... yet.

---

Host 1: Martin Soong
Host 2: Sri Jegarajah

Host 1: Thursday morning, welcome back to Squawk Box Asia side, let’s get to Todd Everts, president and CEO at Wall Street Global, he joins us live from our studios up in Hong Kong. Todd, great to see you again. We were talking offline just a couple of minutes ago and you were saying the look of the last 6 weeks there’s been a lot of happening that’s given you reason for optimism, I mean we were talking about this earlier on this morning. Markets seems to be pricing and not just the US recovery but a global one as well but hey let’s not get ahead of ourselves there’s a lot to be cautious about still.

Todd G. Everts: I think there’s a lot of reasons to be cautious because there’s a lot of manufacturing data, there’s lot of earning reports from non-bank type of stocks that are going to be reported in the next few weeks in the US which are going to be disappointing. The Sea-change that I’ve seen in and amongst the circles that I am in, in Asia, the Middle East and Latin America are first of all as we approached the end of last year, there wasn’t any activity, whether as M&A (Merger and Acquisitions) or as private equity or it was allocations to hedge funds. As we approached the beginning of the new year we saw nothing that gave us hope, nothing that gave us confidence because in Asia, Chinese New Year and getting back to work. But what I’ve seen is a dramatic sea change in the last 6 weeks as it relates to M&A activity, allocations to hedge funds, allocations to funds of hedge funds, and venture capital. And that is extremely encouraging. All that with the fact that new money is coming in to the market without the use of leverage and so as we look at the markets, say, a year ago, the volatility we saw in the markets was escalated dramatically because the amount of capital was levered 7, 10, 15, 20 times depending on the investor. Today, because the banks haven’t re-entered they’re starting to re-enter which is encouraging. The amount of volatility in the market is slightly less but it’s new money coming in to the market. If we look at the consumer in the US which drives the US economy and we look at the consumer in the investment world which invest in the US for mutual fund, 401Ks and retirement plans if they’ve exited the market they’re already gone, so if they’re coming back in to the market this is an extremely positive sign.

Host 1: Is it there or it isn’t really big money. Is it institutional money is coming in?

Todd G. Everts: I think it’s institutional money but what’s encouraging is that institutional money is unlevered so when we see the market go up by half a percent, one percent or two percent it’s more of real money, it’s not money that is betting on an opportunity for the day or the week, it’s more on money that is going to stay in the market. That is encouraging. What’s discouraging is we’re going to get negative numbers from US manufacturing, we’re going to get negative numbers as relates to US financial bailout, we’re going to get negative on employment numbers and the market still seems to be resilient to this because it’s new money coming in to the market.

Host 1: We’ll talk about this new money by coming up more in just a bit Todd Everts CEO at Wall Street Global from our studios live up in Hong Kong.

(commercial break)

Host 1:You’re back with Squawk Box Asia Thursday morning we are back with Todd Everts CEO at Wall Street Global staying with us from our studios live up in Hong Kong. Todd, you left off here talking about optimistic because there is new fresh money coming in to markets whether it’s equities or private equity or VC (venture capital) and what’s good about this is, this is largely unlevered money yet you’re saying we can only look forward to more bearish data coming out in the near future. Why therefore is this money going back in?

Todd G. Everts: Well, this money doesn’t have an alternative. This money’s alternative is cash and this cash is set in the sidelines. When you talk about new money it’s money that’s in the market in the past, it’s money that was liquidated from the market at a previous point which is probably at a loss from the highs but is now re-entering the market because you can’t catch a falling knife, you cannot find the absolute low the person that can perfect.. that is probably Bernie Madoff and that just doesn’t occur so people are now seeing a resilience in the market, they’re coming back in to the market in slow steps but they’re coming in an unlevered fashion because the banks haven’t come back and provide little lines of credits that were there last September, last October definitely a year ago. So it’s encouraging to see that. At the same time the resilience is the fact that they already know and they can anticipate we’re going to have a negative earnings in the US, consumer spending is not going to be back where it was, we’re still going to continue to have a trade surplus and the future of the US dollar versus other currency is uncertain.

Host 2: Todd when you look at indicators that signal return to confidence how encouraging is it for you that we have seen quite a significant bounce back in the commodity markets granted they haven’t touched on the all time highs, revisited the high we saw last year, but how encouraging over all is it for you?

Todd G. Everts: I think it’s encouraging and when everyone talks about flight to quality they talk about going to the US dollar, they talk about going to gold…but I think that many investors have decided that commodities is a flight to quality and I think it’s a smart bet over the long term because people need to consume these commodities and the commodity providers will continue to provide that element and there’s an opportunity to make a profit and get an equity-like return over other types of instruments albeit equities or other asset classes so I’m encouraged by commodity prices improving because of the simple fact that people need to consume these commodities whether it’s specific to manufacturing that equates in to the US consumer or it’s actually something that’s consumed. Commodities is a flight to quality.

Host 1: Okay, great to talk to you sir. Thanks for the times. Todd Everts, CEO at Wall Street Global joining us live from our studios up in Hong Kong.