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tv   Street Signs  CNBC  May 25, 2016 4:00am-5:01am EDT

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ready to negotiate an they reject the $62 billion make over tooff. hi, everybody, good morning. welcome to the show. >> good morning. we've got some data hitting the wire. we're looking at business morale for germany advising for the month of may. that's the headline coming through here. we're looking at current
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conditions index 1.142 coming through may. it's slightly higher than what the consensus was. coming in better than anticipated on the current conditions when looking at the business climate itself. 107.7 in may. that was also better than anticipated, 106.8 is what we were looking for. so that's coming in quite nicely. >> this, morning, coming the same week after the pmi disappointing for some countries in europe. strong in germany. reflecting data as of late. we're looking at the euro dollar. having been under a little bit of pressure heading up to the date due to the overall fed story. >> the u.s. fed was the story pushing that dollar higher. new home sales since 2008. anyway, let's check in on the european markets this morning. we're trading slightly higher as
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nancy was just saying we have a strong finish in the states yesterday. the dow and s&p both higher by 1.5%. nasdaq jumping 2% yesterday. nice gains in asia as well. high of just shy of a percentage point at the moment. as the main european forces you can see yourself. shy of 1%, though. all of europe, though, is in green at the moment. investors also welcoming good news relating to greece. policymakers are hailing a great deal in brussels this after marathon talks resulted in good deals for greece. they asked them to back down and participate in a rescue plan that would release another 10.3 billion euros for athens.
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dijsselbloem. >> so i think the ministers have stretched their political capital to put this on the table. >> but european chief of the imf paul thompson said that the decision to compromise on debt relief was a tough one. >> let me stress one point here where i think we, on the part of the imf, has made a major concession. and i might as well be you know, open about that. we have argued that these measures should be approved up front. and we have agreed that they will be approved at the end of the program period based on a
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revised dsa at that time. again, at that time, i think we all showed flexibility. >> well, louisa, i think the message was that a great deal of capital was used to come and get this compr compromise. there's no secret that the imf wanted debt relief. they say a lost has to do with german elections and they don't want that to interfere with any decisions about greece. so, yes, this is different given that the debt relief is in there but it has been kicked down the road in 2017. it might be smart by the imf the long-term plan for greece is going to be difficult. they have to be sure that relief is felt that aid is gimp to greece along the way otherwise it's not going to make any difference. 321 billion debt outcome. and that's the outlook today.
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so much hinges on what greece's growth outlook looks like until we get into 2018. and some stresses on the summer is and migrant community as well. for now they're hailing it as a great thing. >> what's interesting almost no reaction in the euro dollar at this late stage. there was a time not long ago when something happened in greece -- >> yeah, as you mentioned the fed still the key issue there. for once, good news is good news when we look at equities. we'll look at that in a bit more detail. but here in europe on the equities front a big change plunging at the bottom of the stoxx 600. this after announcing its clothing and home division are unsatisfactory. this as the company reported a 18.5% drop in full-year tax profits. joining us now for more analysis
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on this one to our guest in just a minute. but first, we have to look back at the comments that we did get from the cfo, helen weir, she actually spoke to "squawk box" a bit earlier on the specifics. >> margins have been expanded but that's because we're working really hard on our sourcing operations. we're now sourcing directly from suppliers directly through manufacturers, rather than going through a middle man, which means a change for a wider range of countries around the world to get a better price. so now we're saying we're going to be passing some of that benefit on to our customers going forward. we still expect to see a margin improvement but not like we've seen in years. >> talk about us about store front, as you see more and more shift online, what does that mean for the footprint across the uk. i know you've been doing a little work internally?
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>> i think you make an interesting point anding that every retailer is looking at now which is the mix of stores and online. what we know from our customers stores still play an important part in shirr shopping decisions. a lot of our customers will shop both online and in stores. actually on any particular purchase, they might use both, the stores and online. what we do want to make sure that we're in the right locations. so we're moving from some places from retail parks and things like that. about assix months ago, we announced that we're upgrading our space. in some cases that means we'll move from larger stores to smaller stores. the one thing i will say, though, all of our stores are currently profitable. it's not a case of having a long term of let's making stores. >> let's bring in outside
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perspective here, joining us on the phone is tony shiret over at titan securities. when you look at the stock reaction here corresponding to the full results here are investors right to be losing patience especially when it comes to retail side of things? >> yeah, i think what you find is that numbers adjust in a material way in the forecast for march 17th has come down from probably over 10% today on the new guidance. and people make the same sort of judgments but they value against the profit base that they see in front of them. so, actually, you could argue that 8% down plus downgrade of numbers is actually pretty acceptable. but that said, you know, i think the market say bit surprised at
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the extent of the numbers downgrade. and also the partial nature of the strategic update. where some questions are addressed and some have been left in obeyence. so, you know, there is still a degree of uncertainty. and i think the markets probably feel that companies should have sort of alerted them to the sort of extent to the likely downgrade in numbers seen now. >> do you think the market perhaps, though, is too heavily discounting the fact that there's a new ceo in charge and we do need to give time for the works here because it's only a few months on the job? >> yeah, i think you're exactly right. you know, the market sometimes has unrealistic expectation. and companies take very long time to turn around so what you have is a constant process of
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reappraisal as it hits you. so, like i said, you know, if they were being totally long term, invfestors have marked it down. >> tony, hi. it's louisa. i know they have opened 175 simply outfits in tellers of food. food is profits. how is food performing? >> food is over half of the sales. they don't disclose the profitability of the food. and the rest of the business but food will be lower. than the rest of the business. because of the margin structures in the food industry. they have been outperforming the food industry more widely for quite a long time now. and the strange thing about marks and spencer is that the food has been outperforming the food industry just as long as
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the clothing business has been underperforming it which sort of highlights the issues because food is a very strongly positioned business. whereas, the clothing business in particular, has lost its way and doesn't really have strong positioning. and that's what rowe is trying to achieve during the meetings which we'll discuss later. >> looking at the competition group there's a lot of competition in the likes zaro and h & m. how do you rate them in terms of their peers? >> marks and spencer suffered in the fact that it was the number one business about 50 years ago. and it's what you might call a legacy business so it's having to reinvent itself constantly to take account of businesses like
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zaro and the growth is online. and one of the characteristics of retailers is that it's more difficult to get out of stores than it it to soap them. basically, we're in a readjustment phase, quite a bit of retailers in the uk have suffered and will continue to suffer. so rating marks & spencer say different types of markets, really. and marks & spencer's needs to position itself. you know what you're getting when you go into zaro. >> tony, just before we go here, what is your rating and price tag on m & s? >> i'm going to have to redo my numbers for what's happened today i prefer not to say at the moment. >> we'll give you a chance to do that.
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tony shirret, analyst at haitong. monsanto has rejected a bid. bayer welcomed constructive discussions they also reiterated their $122 per share. the company said it is comfortable that it could overcome any voters. >> and we've seen pressure on bayer shares. it's looking with a little bit of a bounce this morning. eu has given the green light to the $108 billion merger between ab indev and about sabmiller. unicredit ceo is stepping down after losing support to the falling share pricing and poor profits. he's ready to stay until the
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board finds a replacement. potential candidates including ub boss, and aitaly's head marco morelli. joining us to talk about this is a senior analyst. good morning, welcome back. >> good morning. >> why have things taken this thing for the worse with unicredit? that's the way it feels it's been a long way coming. >> yes, indeed, it seems that investors have lost patience in the way that the previous management was actually dealing with a number of challenges. >> and now we hear there are possibly three people who could be in for the top job. what's going make the decision for them? is it going to be based on nationality? is it going to be based on potential m & a activity, in which case the ubs executive
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might be the one? >> it's difficult to speculate. a discussion process has started. and we'll know by the 9th of june, we'll be taking over. it comes down to this strategic plan that unicredit will put in place after that. typically, investors are looking at the amount of potential issues. 5 to 9, 5 to 10 is the rough record of the new money that could come into the company. so there's a number of disposals. the bank in poland a mistake in the turkish operations, and also they could. >> and we know some disposal is in place there, which raises the
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issue are they going to be internationally as well. it's kind of a victim of its own successes in that area? >> exactly. exactly. if you look at the stream of operations, the german investment banking operations, so they are operating as for years. and at the moment, they're actually a good team of the new regulation to test an additional 1% extra layer of capital because they are the only italian systemic financial institution. >> and when we talk about unicredit to its peers here, of course other banks in the italian sector have seen a dip in their shares. when you look at a bank like
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intesa sam paolo. and unicredit are actually concentrating about two-thirds of sector. >> do you think it's a given that we have to see this millionty-billion euro increase? >> yes, the question is for open using it with the npo start it's about 25% of the balance sheet. and it's the oldest institution in the world. and a number of crisis over the years, back in 1694, they faced the present crisis. at the time, the duke actually
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guaranteed. >> 1624? >> 1624. >> wow. thank you very much. really interesting. investments. novo nor disk shares are up. trials have shown that the struggle helps control patients' blood sugar levels with injections. and languishing near the bottom of the stoxx 600. the head of the division told reuters that the sales group could achieve sales is of 1 billion in several years. >> the french government is considering selling part of all of its 14% stake in europe's second largest carmaker that is
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psa citron. this comes as the report says the government could use the sale for cash injections for other state-backed firms. it has risen over 50% over the last two years. as usual, get in touch, it's wonderful hearing from you you can e-mail the show streetsignseurope. >> i'm @nancy cnbc. and you? >> i'm louisa bojesen. get them in. otherwise there's a backlog. still to come here on "street s"sign- stocks something to sink their teeth into. our stock crew will be giving us a few tips on which stocks he favors at the moment. more on that after this break.
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hi, everybody. welcome back. you're still watching "street signs" here on cnbc. fun, food and hygiene, not just some of the ingredients of a happy life, especially if you put them together. but for my next guest, though, they provide the backdrop for his top stock picks for the month. alex sconce is with us from
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hectogon. >> how is the stock business. >> activision is a wonderful company, since we've been investing in since february of this year. the most amazing thing about activisio activision, they have over 400,000 monthly users. if you compare that to the number from twitter and netflix. >> that's a sustainable growth trend? those users are going to come back, we'll see more of this? >> absolutely. this is regular monthly use. the great thing about what activision is doing, number one, they have a great line of games. they launched their first new game in ten years.
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10 million people signed up for the trial of it. >> in 17 years? >> yes. and they've been doing well with existing games. the game makers are actually putting in lots of new features. you subscribe digitally rather than having to buy a new game and that nets for new margins for the manufacturers. >> it's difficult for manufacturers like this once they have a top spot it's about maintaining that top spot because there's so much competition and the landscape changes every day? >> absolutely. it's all about content being king. if you look at call of duty, that's the number one gaming franchise globally, that is activision. last year, they bought king digital. king is better known for candy crush. that's the number one game mobilewise. >> help that gon has invested in activision and you like the
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stock. booker group. >> yeah, a longstanding favorite of ours we've been investing in this business since 2012. i was lucky enough to visit one of our locations tuesday last week. they call it it focus, drive and broaden. it's all about cutting costs, improving customer service and generating organic revenue. they're in huge production at the moment. they're shifting away from areas where there is prying pressure and commodities. from alcohol and moving much more towards fresh fruit and vegetables. and pushing customers up the chains. >> who do they supply? >> the biggest supply are hotels, restaurants and patron company it's in uk. >> sca, i want to get on to this i remember covering it. it's interesting because they're
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about assets and also hygenic products? >> yeah, this is really the big change that's kurd with regard to sca in the last few years. people have historically seen them as the forestry business. and now shifting to a consumer hygiene business. the story is two years ago, less than two years ago, they had a new finance director and new chief executive join. for the first time in four year, the capital markets where there's a really good time for the company to talk all about product innovation. it's very simple, if you think about what happens as countries industrialize and changing demographics, there's a huge demand for hygiene products. maybe the number one leader in incontinence products. they talked about it globally and that in my mind to a allow
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them to do top grease in both pricing and volume. the fine bit of the story, the icing on the cake, amazing bit of trivia, the forestry in sweden, 2.3 the size of the country of belgium. it's about 50% of their revenues. one of the longer term ways we think this company could potentially crystallize value is making that better. >> they're keeping cash, acquisition how is that put to use? >> they're doing very well in acquisition. they're gained control in china and china is going to be one of their largest markets going forward. they're growing organically in countries like brazil and canada. >> you're right about the dem graphics.
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they also concentrate on products for women as well. women being 50% of the population. do the math and development and stuff like that. alex, thank you very much. very interesting, for good measure, you also hold heptagon holds those groups as well. >> that's right. let's give you a check on the broader european markets here. nearly 90 minutes of trade and the green arrows are holding across the board. the banking sector was up 3.5% yesterday. this also following strong gains on wall street as investors keep an eye on oil price here. oil still high for brent and wti. wti and brent trading just so close. and there was surprise on u.s.
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stocks with support for oil. strong data particularly on the housing front. for once, good news on the data was good news on equities as well. let's see how the factors are playing out on the asian markets. sri jegarajah joins us in singapore. >> good morning. in the asian markets, it's down to the firmer lead on wall street overnight. the markets like the data. and the markets like the fact that oil prices are seven-week highs and we saw that move extend into asian trading as well. energy and mining space were big leaders sectorwise. the market seems to be doing a pretty amicable job. the higher dollar involvement that weighs concerns on appreciation appreciate on the currency, on the chinese yuyuan. and the markets not liking that
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particular potential threat and potential development. china is going to remain in folk use in the markets near term. back to you now, ladies. >> sri, thank you very much. sri jegarajah live from singapore. we need to take a quick break. while we're breaking why not go online and check out our world markets live. the blogger trading throughout the day. the blog team going away actively throughout the entire day. we'll be back after the break with more.
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good morning, and welcome back to "street signs." i'm nancy hulgrave. >> hi, everybody, i'm louisa bojesen. and your headlines today, ifo data surprising. the german bank hoists a lift to the forecast with fears over brexit. greece gets enough cash to get it through summer. the imf proposal has kicked in. marks & spencer's seeing profits getting worse before getting better. the british retailer says it will squeeze margins after full-year clothing sales miss the mark. and ready to negotiate. bayer hoping for constructive discussions with monsanto after
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the u.s. seeds giants rejects the $62 billion takeover offer. good morning, and welcome back to "street signs." well, some good news for equity investors here in europe this morning. strong gains holding after the rally we saw overnight on wall street as well. if you take a look at one by one here. ftse higher by 0.6%. and the dax and cac performing higher. and remains looking at brent and wti this morning. this a big player in yesterday's session as well as strong housing data. and another in the green with the dow jones going higher by 74 points. s&p 500 by 10 points and nasdaq higher by 26 points. well, this, of course,
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continuing to watch what's. happening over at the fed. day by day, we try to figure out what is going on inside the crystal ball. speaking earlier to cnbc, james bullard said there's no reason to rejudge a june rate decision. >> i don't think there's any reason to prejudge a june rate decision. i think on the issue of press conferences we have made many moves over the years without press conferences, so, i think you could make a move without a press conference. i think for that first move, you know, the one we did in december, there, you probably wants to have a press conference because that was our first move. whether you have to do that for every single move i think is questionable. >> you've been quoted in just the last couple of days
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including on our outlet on cnbc saying the thing to watch is inflation and labor market and wage pressures. do you agree that we are full employment in the u.s.? >> i think we're at or beyond full employment in the u.s. on the labor market side that's probably the strongest argument for going ahead and making a move. it's other factors that might be causing some hesitancy about this. but if you just look at the labor market. if you took all of your signal from the label market, it's quite strong. even with a little weaker jobs report the last time. basically, unemployment, more or less right at full employment, unemployed persons per job opening lower than it was at the last expansion. unemployment insurance claims per person in a labor force at a 50-year low. these are the kind of numbers you see when the business cycle
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is very strong. >> that's the good part. thus is basically the bulk of the economy, we've had three straight quarters of consume spending. what is going on? >> if you just took your signal from that, we'd definitely move, i think. but if you look at the growth data it doesn't look as good. there's a rule of thumb within the fed if the labor market data and the growth rate don't line up, you go with the labor market data because it's more timely and more measured. good-f you look at gdp in the u.s., if you take tracking estimates for this quarter and look at the past four quarter including this quarter it's only 1.6% which is below a 2% trend. kind of a abelow trend growth over the last year. even if there's some rebound here in the second quarter. so i think the market -- that's a point in favor of the market's view that we're going to go
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slower. >> weighing factors what is going to happen next month in the uk. how important is that going to be when the fed sits and decides? >> i may be an outliar on this, but i don't think the fed will be a big factor. this san important decision for the uk and also important for the continent. the truth is this is a great agreement, this is a growth situation. they would open up negotiations, and the negotiations would probably drag on even longer than that. this would be a very are slow kind of change over many years if they decided to leave. so i don't see it as quite the global financial market event that some are saying. >> so it's not going to stop the fed from hiking in june if it decides to do that? >> i don't think so. my reading with what's going on in the uk, the remain camp is going to win. >> well, brexit may not be a big
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deal for bullard. but our very own geoff cutmore is standing by in madrid. >> i'm very pleased to have with me ed bowles, the former shadow chancellor in the uk and now a senior fellow at harvard university. thank you for stopping by mere. most recently, i think we saw you stand side by side with vince cable and george osborne making the brexit case. >> yes. >> there must have been a little part of your red socialist heart that died that day having to stand new york stock exchange mr. osborne and stand on a similar political platform? >> i think so. it was quite a surprise for all of to us find ourselves standing there. it's not what we imagined in the last five or six years to be on the opposite side. argument. there are some things bigger
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than politics to making decisions which will shape britain's future for coming decades. george osborne is a conservative and on labor. on this one, we're both on the same side. i think on the economy, we're winning the argument. >> it must be very uncomfortable standing there knowing this was your political opponent. knowing that over the years you've traded some pretty bad comments. how didou feel personally? how did you reconcile or overcome perhaps that animosity to get to that common message? >> well, it was a year ago that we.general election an i lost my seat. in some ways the strangest thing after 12 months of not doing any of that to be back on the podium. it was quite a trip down memory lane for me. i guess on europe, george osborne and i totally agree with the single currency would be bad for britain. on the eu, we both believe we
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should stay and fight on that, we agree. the people even have quite bitter disputes and deep differences about values or policies, whether that's about tax credits or the pace of reduction. but it comes to this big question of europe, we can agree. and the single outlet, if you're undecided whether you're blue or red, if you care about the future of the country you should vote in. >> i watched it, and you seem to be glaring at him for most of the first part of the presentation? >> i think, though, it's a serious subject. you don't stand there and asmile. and, you know, i was listening to the chancellor and he was setting out his position. i was listening. if what was a glare, it wasn't intended. it was more for respect for studious concentration. >> the latest news we've had on the uk is that he's missing his deficit targets including there
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are consequences for the uk as a result of that? >> well, there are, the chancellor doing the first speech of the press conference and asking my shadow george as born to come and support the issue of the year. that's politics. the electorate makes the decisions and they decided a year ago they would stick with the conservatives and not have a labor government. and that was the result. now, i spent the whole of previous parliament saying to george osborne that his plans wouldn't work. that he would end up choking after recovery. the deficit wouldn't come down in the way he predicted and that's turned out to be correct. george osborne's plans are much smaller because he's had a tougher time in growth. >> if his plan for the economy isn't working, how do we know his plan for the brexit vote is the right one in this case? >> box i think in this case, we've seen not only treasury analysis, short-term and
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long-terms. setting out the big impact on living standards and trades and britain leaving the single market. but also from the bank of england from the nationinternat monetary fund. the vast majority have been coming out and speaking out about this. there are people in the economy saying i don't care about brexit. britain controlling our destiny on our own is more important. i understand that and personally we have more control over destiny on climate change and security and trade than we would have on countries standing alone. i think the not really being disputed. on the central question would britain be better off or worse off short or long term. i think that is why the remaining vote is strengthening with impulse. >> you and i are old enough to
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remember when the labor party ripped itself asunder and ran through decades of political crisis. we're back there now, aren't we? i saw again, the opposition w.h.i.p. saying the party has now lost touch with the working man? >> yeah, i thought the question you're about to ask me is are we right back there again with the conservative party. after you think after 1975, labor divided literally. we ended up in an anti-position for years. the risk for security with a conservative government is the divide. it almost looks like they're the guys with the biggest problem at the moment. but of course there's been a big change in the labor party. it wasn't one i expected. it wasn't one i supported. i think the reality on this europe issue, though, is labor which is the united party with the conservatives. >> look, you've clearly lost
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none of your political skills and that was a nice swerve. >> you're right. >> let's come back to it. what were 53 got here, we've got the shadow w.h.i.p. saying you've lost touch with the people. you've got an anti-semitism remove taking place because of inappropriate comments made by a member of the party. it feels like there isn't a nuclear policy that people can buy into. there are all sorts of concerns that, yes, the torrids may not be hitting their budgets but where's the opposition? >> look, the anti-semitism is disgracial and the leadership i hope is impracticaling down on that. more widely, a big experiment happened. we saw him and todd watson the deputy leader saying after the elections this isn't good enough yet and we'll be judged on our results. i think what people are going to
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do for now is stand back and say, let's see what the public reaction is going to be on the issues. clearly issues out for security, also aspiration. also the security of our nation, those are big questions and the labor party is going to debate those things. and some of them are still quite disputed. what i'm not going to do is project at this stage. he's the leader, got elected. and the truth of the pudding will be in the eating. >> is new labor dead or is it just waiting at this point for opportunity to arise once again? >> there's different eras in politics. often they'll have a new label attached to them. the new label is about the 1990s and 2000. clearly, we've moved on to that. the fundamentals in my view, you have to be credible and in order at the same time to show you can
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change your economy and your side, making it stronger and fairer. and that you can work with the market economy. i think those are fundamental insights which are as relevant now as they were 20, 30 years ago. it's a different time. and populations are angry when they look at what's happened around companies not paying their tax. that's something that we have to rise to and respond to which is different from 10, 15 years ago. but that fundamental insight, to be radical, you got to be credible, that's not changed. >> real pleasure catching up with you. thanks for coming to speak with us here. we're about the same age, actually, i never thought i'd see a former shadow chancellor standing on the same platform as a tori chancellor but brexit has brought together particularly different bedfellows in the uk. >> thanks for that, geoff. >> what's the date today?
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less than a month now. >> june 23rd. meanwhile, still to come on "street signs," police in new mexico clashed with protesters outside of a donald trump rally. coming up we'll tell bhaut executive chairman of alphabet has to say about the two least popular candidates in u.s. history.
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hi, everybody. welcome back. you're still watching "street signs." this is nancy. i'm louisa. breaking up is apparently not all that hard to do after all. with another split now happening in the hewlett-packard company
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for hp, wilfred frost has the details. some people think it's a long time coming, wilfred? >> absolute right, louisa. hp announcing plans to spin off most of its business operations merging with an $8.5 billion deal. shares of both companies up sharply on the news as you can see. the transaction comes less than a year after the breakup of hewlett-packard. hewlett-packard enterprise shareholders will own shares of both hpe and the combined company. meg whitman last night. >> on the enterprise, this transaction contains a significant value by unlocking a faster margin, stronger growing business. hpe will have animal revenue and focus on software generation that leverages a world class
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portfolio of storage, networking converged infrastructure southwest the helium platform and software assets. >> and meg whitman will be on "squawk on the street." and down 63 points in the free market. louisa. >> wilfred, thank you very much. thank you. we were listening. we just had a few ins and outs here in the studio. wilfred, thank you very much. let's move on, on a presidential race, headlines by the two least popular candidates in history. the alphabet executive chairman eric schmidt is no different. julia joins on the set she spoke to schmidt in amsterdam. >> we know he's back in the start of this looking at analytics of hillary clinton.
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when you hear his views on donald trump what i thought was quite interesting were the comments that donald trump saying that say that data is overrated. i said, what do you think? >> let us start listening to donald trump, his candidacy has largely been fueled by twitter, last time i checked was a tech company that used a lot of data. >> what kind of president do you think he'll be? >> are you asking me if he's going to be president? >> no i'm asking you what kind of a president he will make? >> as a general rule, presidents have a lot of constraints on them. [ laughter ] that's a good thing. >> do you think he'll be president? >> polling to whatever -- well, there's a problem in america, and perhaps here in europe, that the polling is based on home phones and it's difficult to poll against mobile phones. and everybody i know uses a mobile phone so there's some evidence that the polling is
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systematically inaccurate. but i think it's too soon to tell. mr. trump is busy unifying the republican party after his bruising battle with them. and i think it's too soon to tell -- too early to tell. we'll know in the fall. >> you back a startup that's looking at data analytics to help. do you think actually data can trump trump? >> i'm not going to make any predictions. what i will tell you about politics, again each country in europe is different with it. but in america, it's possible to use data analytics to understand voter preferences and to encourage them to get more educated about both the threat of the other guy and the benefits of the current female candidate. >> well, let's bring in another voice on this, neal campling joins us, ahead of north trust
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securities. neal, so much to discuss there. >> we needed four hours. >> neal from your perspective, one of the things you've been looking at from google and all the competitors. who is winning this one? >> i think what's interesting alphabet is now known as powering three other companies in this war in many ways for them themselves, they suffer from two issues which i think were partly addressed in the interview yesterday in fact. which is basically they have issues in china and social. where they are succeeding are in things like the ending bond which provided a massive infrastructure for basically what's now become 2.5 billion people playing video game as. just 250 million a few years ago. the vehicles are misunderstood in terms of technology, in terms
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of we're just now starting in policy change. technology is ready. consumers are ready. >> what do you mean they failed in social already? >> well, i think you have three companies globally that have scale. scale is everything. one is ten cent in china, one is facebook in the rest of the western world. so we think that trice scale has already been won. >> now, they've got four different teches. i say where is your concerted effort to tackle facebook head on. his first reaction was hey, we lost the race in social because we're doing other things. he said, look, give us a chance to get it out there. it was an interesting exercise. i asked everybody who used things like whatsapp, chats, most everybody did. if anybody comes out with something else that's a superior
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product, would you change? there's this belief it's very sticky. 70% of those people put their hands down that they were willing to change. >> i think the reason for change is quite simple. it's a return on time. we think we got so much media twist. we've got so many different types of consumption, but for the end user it is about what the most efficient use of my time. that's why facebook has evolved so well because it's not purely just facebook now. whatsapp, for example, owni ini messenger. there's nor messages on facebook than any messenger in the world. >> guys, we've got to goes. thank you, julia, thank you. neill, thank you to you as well. and that's it for the show. i'm louisa bojesen. >> and i'm nancy hulgrave. "worldwide exchange" is up next. thanks for watching. bye.
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good morning. global market alerts. stocks rallying around the world right now. we'll talk about the catalysts right ahead. new this morning -- a breakthrough debt deal for greece. details on another late round of talks in brussels coming up. and a developing story. paypal peter thiel is finance hulk hogan's lawsuit. it's wednesday, may 25th, 2016, "worldwide exchange" begins right now. ♪ ♪ i can't feel my face when i'm with you ♪ ♪ good morning and welcome to "worldwide exchange" on cnbc. i'm


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