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MARCO WERMAN: I'm Marco Werman. This is The World. The bad economic news keeps piling up. Today we hear that unemployment jumped to 7.6 percent during January – that's because nearly 600,000 Americans were laid off last month. The new figures rippled through Washington, where President Obama urged Congress to hurry up and approve a stimulus package. The news also quickly rippled through world markets. In London, The World's Laura Lynch went to the Canary Wharf Financial District to check out reaction there.

LAURA LYNCH: I'm with Howard Wheeldon, who is a senior strategist at BGC Partners. You've seen the new jobless numbers out of the United States. What do you think?

HOWARD WHEELDON: What we've got is the worst set of figures, essentially monthly figures, since 1974. It shows and it highlights the extent and the depth of the US employment situation. Jobs are being lost by the hundreds of thousands, so a very serious situation.

LYNCH: Let's just step back a little bit on this. As the numbers came out, what did you see the markets doing right away around the world?

WHEELDON: The US futures – because these figures came out before the US market actually opened – the US futures immediately went up, because alas the figures were slightly higher than the consensus forecast. The market immediately took the view that the plans that will be put forward by Timothy Geithner next week, from the US Treasury, and the Obama plan which is currently going through the Senate, would give them impetus. And in fact, the view essentially is that the Obama plan will now go through the Senate, hopefully tonight.

LYNCH: Do you really think that that's the way the markets view this? That bad news in the US is actually an impetus to better things around the rest of the world?

WHEELDON: I think it is, interestingly. We, you know, wherever we are in Europe, tend to follow the US. If the US futures suddenly change, my goodness – European markets suddenly go in the same direction, and it happens in the space of minutes. So we're very much looking to the US for a lead here.

LYNCH: There are clauses in the legislation so far, in the stimulus package, that are still – they're talking about reworking them or perhaps withdrawing the “Buy America.” I'm wondering what reaction the markets had to that idea?

WHEELDON: The markets obviously dislike any form of protectionism. But I think in this case, although it's clearly being watered down as it's going through the Senate -- they've taken the view that a degree of protectionism is necessary, and it is quite reasonable that if the US, or any other government, is pouring money into one part of its industry, then it does have a right to give that industry a little bit of protection or time to get its house in order. And I think that's what we're seeing here. The steel industry has had its problems before, and it will have them again. It does need time. The US government is trying to create a path where spending will be the way out. So we've got two things here. We're trying to improve liquidity. We're trying to improve spending. We're going to do that through infrastructure spending, and the US government will pour a lot of money into that. Overall, the hope is that it will create jobs, it will turn confidence, but it is going to be a very, very long process.

LYNCH: Are the markets going to be that patient?

WHEELDON: I don't think the markets have any choice. Of course, we're looking at the US today. We've got to look over here in Europe. Europe will lag the US, and that's one big problem. And Europe is also restricted by having a currency, one currency spread over a large number of countries. It only takes one of those countries to actually go seriously wrong, and the Euro itself could be in trouble. That could put the European recovery back a long way. The other factor is the amount of national debt that the US and indeed the various countries in Europe – Japan, and other countries – are actually taking on. This at some point has to be paid back. Will that mean higher taxes for everybody? Will that slow down the rate of recovery progress?

LYNCH: Howard Wheeldon, thank you very much.

WHEELDON: Pleasure.

WERMAN: The World's Laura Lynch in London, speaking with Howard Wheeldon, a senior strategist with BGC Partners there.

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