tv Street Signs CNBC September 6, 2016 4:00am-5:01am EDT
jump in preyear profits and calls recent sells very encouraging. >> i think we're going to see the housing market come back. the new homes market will carry on. certainly that's the anecdote evidence we're picking up in the marketplace. barack obama cancels a meeting with the president of the philippines after the leader threatens to swear at the u.s. president. good morning everyone. we have a jam packed show. i want to show you what's going on in the markets and actually over the last couple of minutes, we have turned a little bit lower. stock europe 600 down fractionally. down 0.1%. we did start the day on the front foot with modest gains for the european markets. remember we were at eight month highs, but then they faded into the session. this morning the xetra dax is
just close to the flat line. once again we'll felt to monsanto in a second. the ftse 100 a little bit of an under performer. even though some of the home builders are doing a little bit better. sector wise, here's the quick picture. basic resources continue to storm ahead. oil and gas also still benefitting from that continued really in oil prices after yesterday's deal between russia and saudi arabia. on the downside, travel, leisure, and technology. >> and as carolyn suggested, our top story. that brings the total value of the potential deal to over $65 billion. sit the second time buyer has
raised bid for monsanto starting at $122 a share back in may before offering $125 in july. for more analysis on the news, lepts bring in john, managing partner. will three time times be lucky? >> i think there's still more to go. the interesting part is the monotanto is saying it's got other suitors. evaluating other strategical alternatives. the ore deals are still uncertain with anti-trust and regulatory. this has some to go. yes, there are open books. semi open books. i think bayer will have to pay more. >> henderson came out very
strongly saying this could distract from the pharma side of bayer. >> bayer is traditionally had strength in pharmaceuticals. its roots are very strong and needs to continue to be strong. pharmaceuticals needs investment. it needs innovation. those are the things that require money and when they're deleveraging, that will be less on the agenda. i understand the investor's concern. >> i believe there are concerns and the two parties are trying to work through how they deal with concerns. we are talking about an interest that is consolidating. whenever you do that, you get concerns over anti-trust and concerns over regulation. i think we're going to see more of those.
still mileage to go here to try and finally close the deal here. >> as you pointed out, this sector is so incredibly busy with consolidation. do you think that we'll be seeing an industry that maybe is too big and too unwielding, not anymo nimble enough? >> bayers when they spun out, parliaments division was very nice. it's a comparable one. you create somebody focused, somebody nimble and somebody who can serve the feed of pharmas in the way. the one stop shop argument is less excelling. >> just finally, when you look at all the players looking at consolidation, raises the question of who else is there bidding after monsanto. we heard from monsanto saying we are looking at other offers. who do you think the biggest
contenders are. >> bsf is still there. i think there's really only all few small ones. the interesting thing is going to be strategical turn offs like spinouts and joint ventures. those may come out rather than pure nma. >> do you think bsf could come back with a better offer or is that dead in the water. >> we can never say never. >> thank you for that. managing partner at nova. let's bring you a check on oil prices. crude continues to trade higher. seeing brent pair back slightly. wti really pushing higher, 1.3%. bit of a divergence there. this comes after russia and saudi arabia pledged to cooperate in a bid to stabilize
oil markets yesterday. however prices did draw back from monday's high. skepticism as to whether or not the two oil joints will be able to reach an output deal. in the hours after the cooperation pact was announced, told domestic media a rebalancing of the oil market would benefit all participants. 50-$60 a barrel would be fair for consumer and producers. meantime, welcomed russia and saudi arabia pledge. he told media the oil markets are on the way to rebalancing, but incentives are needed to accelerate the process. let's get her on the topic with stephen, thank you so much for joining us. do you believe the minister who says we're on the way to rebalancing, we don't need the deal. >> good morning. i think we actually rebalanced.
i think if we look at global around the world, they are going down. so therefore the balancing is already taking place. therefore i think i'm not sure doing much to the picture. good from a sentiment perspective and perception. i don't think it goes much beyond that. >> if the market does believe the oil market is balanced right now because you say it is, but the market is not trading on that, do you think a signal would sustain bli push the price higher. >> yes. after that, as people look at the data it, they would be perhaps come back to their sense. the main issue is around the fact there are a lot of inventory and it takes time to eat through the inventory. >> looking at the deal, many were kick to cast doubt on what exact it would have.
yet the energy minister himself said it's about bringing others to table and encouraging others to participate. do you think it carries that much weight. >> i don't think so. historically we have seen how it has been difficult for opec members to respect any sort of quota. i think to be really material would be if nigeria and libya were to sign a deal whether they would except the level. they would never except to that because there is 1.5 million barrel shutting in those countries and i don't see them agree to basically prevent that amount to come back. >> on the iran issue was interesting. russia's minister repeated what vladimir putin said. when you think about that the and what that means in practice if they get a deal on freezing doesn't make much difference. >> my sentiment is the iran is part of -- there is a
misconception between oil being sold by iran. we don't have access to inventory. it's difficult to know. i personally strug toll believe iran was able to bring back 1 million barrel in such a short amount of time. what they are doing is the inventory. >> where are we heading on oil prices? getting closer to $60 a barrel again. >> i think there will be spikes. we believe we may see $10 by the end of the year. we see another $108 by the end of next year. we really believe things are coming back. >> how close are you watching the demand side of things. they're trying to offset the knee-jerk reaction. a lot of anti-free trade sentiment around the globe. does that have bad repercussions when we talk about global demand. >> at the beginning of the year,
the market did not expect such strong demands as we have seen. it has happened. gasoline has gone up a lot as you would expect because oil is cheap. we are seeing normal market mek nischelle take place. >> the winter last year was warm. unseasonally warm. if we get another relatively warm winter this year and europe and the northern hemisphere, do you think oil prices could stay relatively depressed. >> of course it would help. decline rates are fast. >> stephen, thank you so much for that. personally i'm hoping for a warm winter. >> everyone talks about a white christmas. >> we don't have skin in the game when it coming to oil. managing director at first energy capital. thank you so much. >> thank you. get no touch with us. let us know what you think about the direction of oil prices. do you want the white christmas.
betting on a warm winter here. get this touch. streens europe @cnbc dom. y -- "street sign . we're going go for a quick break. still coming up on the show, can the british housing market stage a comeback. coming up after the short break. crazy to open a hotel here. everyone said it's so hard to be a musician, but i can't imagine doing ything ee. now that the train makes it easier to get here, the neighborodagine is really changing. i'm always hopping on the train. trains with innotive siemens technology help kp cities moving, so neighborhoods and busisses canrosper. i can bookr 4 gigs on a good weend. i'm booked solid for weeks. it takes ingenuity to make it theig city.
of the aussie dollar could complicate the economic rebounce. rbi holding fire. wildly expected here. no surprises. governor glen stephens providing over final meeting. consistent with sustainable growth in the economy and achieving the central bank inflation target over time. we did see the aussie dollar come under pressure. see it gaining against the u.s. dollar there. up almost 1% there about.90%. this decision coming adds just one day before q2 gdp numbers are scheduled to be out to showing gdp grum about five to six%. which was slower than 1.1% growth we saw in the first quarter. the economy there still on track to post 25 years without a recession. looking elsewhere, here in asia, a mixed picture today. we're seeing the hang sang over in hong kong continues gains from yesterday up about .50%.
the nikkei extending their gains as well. remember yesterday they reached a three-month high. still closing today above that 17,000 mark. up about .20%. >> thanks. we just want to bring viewers an update about the story and bayer and monsanto. this comes to reuters, he is saying he opposes the revised terms of the monsanto takeover offer. interesting we told you earlier it was henderson back with the revised bid on 25th. they were not in favor of the revis revised bid. reflected a very high valuation and concerned it could strain the pharma side of the business as well. so carolyn, interesting to note even in the resized terms still saying they oppose. >> i looked out a note from
bernstein, not today, but from one of the recent offers and pointed out something interesting, chemical chien paid. we're still below that 17 multiple at this point. at this very price so we're going to have to go up to 135, $140 per share to reach that multiple. >> so far from a done deal here you might say. >> yes. >> we've also been watching shares of hanjin. shares are being buoyed and sold. the world's seventh bigger shipper has had 79 fleets seized around the world after filing for bankruptcy protection. the group which also controls korean airlines has attempted to unlock government support for the shipping unit by putting up
9 brett lawrie $9 billion of co >> the german health care firm owns largest private network. marks largest buyout on record and company expects the deal to close near the tend of the year. really leading the charge this german thgermany. erickson shares sunk to four-year low. signs deal with baseball focused channel mlb network for realtime spor sports graphic software. meanwhile, more japanese car makers are eyeing the market. expanding operations on the ground in hopes of super charging sales. >> reporter: hi, yes, toy owe toe motor will spend roughly 44 billion yen or over $400 million to enhance production lines.
the plant has been producing multipurpose vehicles targeting emerging markets, but will gradually be updated to manufacturer new versions of the vehicle for the first time in 11 years. output will be boosted 15 x 140,000 units a year. sold in south africa and other african-american countries as well as in europe. toyota is trying to produce more locally since the weakness is driving up import coast. nissan is stepping up sales inle africa. the company has some 90,000 dealerships in the country. tripled since 2014. by expanding presence, hopes to boost share in africa. japanese truck makers, mitsubishi are also eyeing the african market markets.
calling to industry data, some 1.5 million vehicles were sold in africa in 2015 which accounts for only 2% of the global market. still sales have groan nearly 40% over a decade and rising income levels are expected to lift sales even further. there are risks since few parts manufacturers have set up shop in the continent which means components have to be imported. commodity prices and frequent labor strikes are also some of the challenges firms will need to face. that's all from the nikkei, back to you. >> thank you for that update. air bus orders are taking off. 2 more planes valued at $2 billion while jet star is looking for ten new. shares higher 1.3%. meantime british air ways has been experiencing check in system issues results in delays at a number of airports across the world. in a statement the uk airline
said the it staff were working on a problem. travelers have taken to social media to complain about long waiting times. earlier this morning also protest at city airport. if you're flying ba today from city airport, not a great day. >> hard when you wake up and hear news like this. check nice and early and they're saying check in early. >> i always try to do that, sometimes my smartphone won't let me do it. recently i've been traveling with an infant. you can't check in online. you have to go o the counter. >> it's not easy. >> leave in plenty of time. meanwhile, global sales for leg go group. the toy maker continues to deal with supply challenge sgls that guarantee of supply is important to us particularly as we go into the critical holiday period in the back half of the calendar year. what we're doing is through our
supply chain model, what we look to do is have supply based in the regions that we're supplying. it's a key part of the way we approach things to be responsive and get new products into the hands of the consumer so each of our regions now has its own supply base that we're looking to ensure that we've got that responsiveness and avoid having long periods of time when we've got products in ships. berkeley group says housing market has stabilized. around 20% lower than a year ago due to market cons and fewer propertiy ies available. redrow increased 23%. telling cnbc he is predicting a comeback in the housing market after posting encouraging sales
figures. >> what happened is you've seen immediately following brexit, some markets other than housing were affected for a short period of time. i think we're going to see the housing market come back. not just the new homes market will carry on and i think we'll see the market improving. that's the sort of anecdote evidence we're picking up in the market. we need the secondhand market to move. a lot of customers are trading up. >> let's talk more about home builders and all things equities. libra investment services. how do you feel about home builders? the economic picture seems to be picking up quite nicely. maybe the boe got it wrong and home builders are okay. >> i think people have been worrying about home builders for some time now. more than a year. they haven't really reflected. show an element of uncertainty and risk. then you had a huge disconnect.
a huge amount of risk being priced in. people trying to work out what to do since then. numbers that have been coming through. numbers from redrow today. expect numbers will suggest they need to have another look. >> the market has been rallying. yesterday we hit eight-month highs for the european market. today close to four-month highs. does it tell you it's time to take profit. do you want to build on risk in your portfolio. what do you want to do? we've been building on risk. value trends, the growth, one year growth in value and two to three year growth in value as those have started to improve, we've cena as being sustainable. we want to buy stocks that are likely to benefit from that with those characteristics. >> we've been buying growth stocks. sort of disconnect where people moved to banks and insurance stocks lately.
some of those dollar stocks rallied strongly on june 238 got left behind now so we look to buy some of those. bat we were looking at the other day as well. recommended buying more of those sorts of stocks. health care sector for sentiment reasons, but, again, took a big deep and look and see the value trends and try to buy back into those. those are the growth trends. and things like dominos pizza to go to the other stream. >> i notice you like some of the minors we'll. we are looking at outperformers. specifically you like randgold. >> there's minors and randgold. we hate to like minors. it's a terrifying ride. as we see at the moment, until we saw that stock recently, mining is the mining sector was
starting to show growth in value trends. they were become accident growth in their outlook. now what's happening again is share prices have consolidated. come to rising trends. say we're not overpaying for this growth any longer. >> when we get closer to fed rate hike, possibly even two this year, you're not worried about the price of gold prices. >> it's very difficult to have a view on the gold price or a view on the dollar at the moment. we try to have a view on value. there are one or two stocks out there at the moment. randgold being one of them. certainly a massive rally again on the brexit. that sort of hedge. we've seen the share price come all the way back. a long way back. we think there's a lot of value. almost irrespective of the gold price unless it tanks. irrespective of that, we think we are recommending clients at the right level. >> let's stay with the fed and next rate hike for a moment.
the very clear play is to buy financials and sell utilities. does that apply to the eu at all. >> sadly it does in terms of sentiment because people have again witnessed the last three weeks, if you've not been involved in financials, banks and insurances, which up until this point have terrible sort of value and consistently have terrible value trends. the problem is periodically you get incredible moves in those sectors based on what's happening in the u.s. primarily and if you're not in them it's very painful. so we took the view we could do bank of ireland. some exposure is a good idea here. what can we justify buying. that was the only one we could find. >> that was the only one you could find. >> everything else is looking expensive at this point. unless you see a complete change in trend and growth coming in. >> rob, we're going to have to leave it here. thank you so much r. founding partner at libra
good morning and welcome pa back to "street signs." the cold reaction. bayer's shares dip as it sweetens offer for monsanto. putting $65 million on the table. in a bid to buy the company. a healthy deal, topping the stock 600 as it expands hospital portfolio. 6 billion takeover. uk house builders see green.
r redrow posts a jump in profit. >> i think we're going to see the housing market come back. not just the new homes market will carry on and see the market grooufing. that's the sort of anecdote evidence we're picking up in the marketplace. barack obama cancels a meeting with the president of the fell mephilippines after thr threatens to swear at the u.s. president. good morning and welcome back to "street signs." with labor day over, i suppose summer is finally over, carolyn. >> i'm still wearing white though. didn't get the memo. >> wait until winter. there's a thing at winter white. >> with the u.s. closed long holiday. give you a check of where they are set to open. went away on friday. however some says we could get a
rate hike in september. a lot of g20 action to respond to over the week as well. this is the view for u.s. markets set to open today. s&p called higher .70%. douj higher 18 points and the nasdaq higher 1.11 there. modest gains called for u.s. markets today. lest bring you up to speed with the european equities now. 90 minutes into the session. bit of a mixed picture. similar to what we saw in the session yesterday. we did see european equities touch near eight month highs. paired back to just modest gains by the close. taking direction from the volatility we saw in oil prices as well. the xetra dax higher .20%. the french cac higher.15%. >> the g 20 leade20 leaders hav released after the close of the
summit, leaders warned of downside risk to the global economic outlook acknowledging monetary policy alone could not create balanced growth. cracks are appearing in the framewo framework. the bank highlights policy uncertainty as the most significant risk toll its outlook. let's talk more about this with chief european economist. monetary policy in europe has lost effectiveness. can fiscal policy close the gap. >> not yet. in theory, yes, but as you mentioned the parties that we are facing a lot of policy uncertainty with political gridlock in spain and italy, we have a upcoming elections in france and germany and not -- the next two years would see more fiscal easing when there's
fiscal room, but the priority would be to do some reform. we don't see the willingness to implement this these reforms. >> it's interesting in your report. you also point out maybe too much fis dal easing is not great. it might also lead to fiscal instability. how so. >> again, there are some countries where there is fiscal rules. below 80% of gdp. of course. they can increase the fiscal deficit. it's not the case for other countries like portugal or it long isla italy where the debt ratio is closer to 30% of gdp. all in all we believe the euro for a whole has some fiscal room, but in some countries it could weaken the stability and in return also weaken the banking sector in those countries. >> going back to the many political risks you've outlined
there as we get closer to elections in europe and the referendum in italy, surely mario draghi is taking note of that. in the meeting we're expecting the next meeting here, do you think we'll see an extension of qe and will it be enough to make a difference. >> i think that's what the market expects. we have some forward guidance. today the qe is set to expire in march 2017. we expect as usual the six month deadline turned qe program and we believe until september 27 and will it be enough? not enough to boost growth and reduce policy uncertainty. and you mentioned mayor draghi was insisting on using fiscal policy.
when he talks about government, he talks about both sides, fiscal policy and structural reforms. >> and absolutely he's looking at that when they scratch their heads and try to figure out why inflation hasn't picked up to their target. what else can they do to really jump start inflation. >> not much unfortunately. inflation will pick up. has started to pick up. will it pick up close to the inflation target 2%? we don't believe it at all. the main reason is that co-inflation is very sluggish. close to 1%. we know that there are plenty of flags, years before any growth, gdp growth takes to higher inflation. that's why we believe co-inflation will never exceed 1.5% for the next five years so that means that monetary policy in europe will have to be very,
very -- >> with no inflat big missing l the global economy, where are we in the cycle. we're seeing a lot of activity happening. a lot of debt taking on. where are we? are we that late in the cycle? >> no, i don't think so. there are is steam in the business sector. starting with the u.s., the fed chair is insisting the business never by thems. we need some triggers, but if you look at where we are, plenty of room before the end of the business sector. look for the profit margins in europe. now we are to highest profit margin for the past two decades. we've never seen that in europe.
if you look at the theory, normally we have tlplenty of ti nor the business sector in europe. >> i'm going to have to leave it here. i have interesting comments coming through for the german finance minister. says the high liquidity is very worrying. saying interest rates are too low. will only get out of the low interest rate phase with higher stainable gdp growth. this is what leaders have been saying all along. more on the domestic side. he's presenting the budget before parliament today. he sees 15 billion euro leeway to cut income taxes after 2017. >> all right. let's get back to the g20 summit. on the sidelines of that meeting in china, president obama held what would be his last ever meeting with his russian counter part, vladimir putin. during a face to face meeting,
discussed the issues of syria and cyber security. nbc ron has the full story. >> reporter: for 90 of the most intense minutes two of the world's most powerful men face to face for the last time. president obama and vladimir putin. >> typically the tone of our meetings are candid, blunt, business like. and this one was no different. >> over the years, the two unable to hide contempt. russia backs syrian regime. >> given the gaps of trust that exist, that's a tough negotiation. >> reporter: bull putin eemerged predicting a deal the fighting could come in the next few days. not a date set for talks to continue. president obama confronted putin about cyber hacking websites and called for a clear rule. >> what we cannot do is have a situation in which this becomes
the wild wild west. >> mr. putin left for moscow. mr. obama moved on to last stop in asia. here he becomes the first u.s. president to visit this nation america bombed so heavily during the vietnam war. >> confronting a difficult chapter of america's past. whether he'll ever meet one of his touchest adversaries again. >> barack obama has cancelled his first meeting with philippines president who has described the u.s. president as a, quote, son of a prostitute. was going to challenge him on thousands of killings on the war on drugs. filipino leader said he would not discuss american issues. he's not puppet.
>> i am a president of of a sovereign state. and we have long since to be equality. i don't have any -- nobody, but nobody. >> however, the filipino president now says he regrets that his comments caused controversy and his bilateral meeting was cancelled. >> let's get out to nbc tracie potts who joins us from washington. any indication of the white house response on this one? >> reporter: well, the white house initially said they cancelled the meeting. it was interesting. he said it was mutual they cancelled the meeting it wouldn't be appropriate after this comments that were actually made before he got to louse. the filipino president not one known to hold his tongue. he's used profanity before. even taken on the pope in his comments. afterwards in a statement by a spokesman, he said that it was not personal after he had made
comments like i will swear at you at this meeting, which tended to cause the white house to pull back. not really wanting to put the president in a situation like that very publicly with the filipino president. also may have had some regrets because u.s. is a huge trading partner with the philippines. they've got serious business to discuss in terms of security, the u.s. has been an ally. especially when it comes to the situation in the south china sea. there are reasons why he doesn't necessarily want to put off the united states, but in terms of this meeting and the proximity of his comments and the visit n in. >> he's now been criticizing the fed, huh? >> trump says the fed in terms of raising rates, you know, obviously the economy is huge here. he criticized the fed in terms
of what thauf done and not done. in terms of raising rates. possibly could come up when he visits virginia and north carolina today. his focus now is these battle grounds states and trying to get the word out and still on defense when it comes to describing immigration policy. >> speaking of battleground states. both candidates appearing in ohio. what do polls suggest who is in favor at the moment. >> the major polls we're seeing hillary clinton has an edge. ohio is going to be key. no one has ever won the presidency without winning ohio. that's why we're seeing them concentrate. you were probably pretty close to one of the candidates. they saturate thad state. >> all right. it's only going get more exciting. just two months to go. thank you for joining us. tracie potts, nbc news. still to come, driving people out of a job. stay tuned so find out about the
impact of self driving vehicles on jobs. the launch window. weave to bve p. ife're noteady whethe anetare perfectly aligned, at's it ifewe need really tight anetatemperature corols.d, enneg,erynic a split second too long could mean scrapping it enneall and starting over. propulsion, structural analysis- ple bourbon caral. that's what wre working right now. om design through pruction, siemens technology helps manufaurs meetital dd. i think is'll be our biggest flavor yet. y only have one shot, you need a whole lot oingenuity.
and it starts with foster farms simply raised chicken. california grown with no antibiotics ever. let's get comfortable with our food again. laos. good morning and welcome back to "street signs." we want to bring you an update on weather. before we do that, let's bring you a flash from oil minister now. backs any measure aimed at stabilizing global market. this is a significant of course because yesterday when we had the news of saudi arabia and russia coming to an agreement to monitor oil markets to achieve any steps necessary to stabilize that market, a lot of people were quick to raise the red flag over iran noting that iran is keen to get back to presanction levels and pump production. the fact oil men center saying
backs any measure aimed at stabilizing global market should be taken note of. brent crude off just .90%. wti has been pushing higher: higher by more than 1%. meanwhile, the united states celebrated labor day yesterday. many east coast residents had holiday plans disrupted by tropt cal psych lo cyclone hermine. >> this boat was washed ashore by the storm swells. beaches in several states were closed for labor day, keeping tourists away. >> we don't put money over any life. >> reporter: fears of waves and rip currents kept people out of the water. >> i don't plan on going past my knees. >> reporter: a tropical storm warning in is effect for parts of massachusetts. we don't have a cutoff point
necessarily. once it starts reaching into the 40 knot area, that's when we cancel. >> the storm may have ruined holidays plans, residents in the northeast are happy it stayed offshore. >> i felt relief early this morning. we missed it. thank god. >> reporter: hermine is kmpted to weaken. meanwhile, air bus orders have been taking off with two airlines checking in for new aircraft. via jet has ordered 20 more planes valued over $2 billion while jet star is looking if 10 new a 350s. >> meantime, british air ways has been experiencing check in issues resulting in delays across the world: in a statement uk said it staffer were working on the problem. travelers have taken to social media to complain about long waiting times.
>> not a great day to be a flyer if you're coming from london. operations at london city airport have been suspended after nine protesters locked themselves on the run way. black lives matter were blind the protest. officers at the scene are currently negotiating. general motors has reached an agreement to settle cases. the lawyer for the plaintiff says gm is interested in resolving the situation. the fault which cause braking and stalling issues linked to deaths. the auto maker has footed the bill related to the switch of around $2 billion so far. and volkswagen trump discrimination will announce a partnership as soon as today. it's expected to acquire a near 20% stake in the gps satellite company for $16 a share.
the stake holding is expected to create new product developments synergies. v wrrks is down 25% since the emission scandal. you can see the stock getting a nice bump. higher .70%. leading car makers and tech giants are steering ahead with the research for the autonomous vehicle. some have questioned whether this could drive millions out of work. eric has the report. >> reporter: silicon vail gets its way, it won't be long before every car and truck in america is driverless. it will be great for reducing the cost of labor and fuel and cutting down on accidents, but for nearly 4.5 million americans who work as truck drivers, bus driving, taxi drivers. it could mean economic disaster. truck driving alone is the most common job in the majority of 350 states. all of them could be unemployed in years. nearly 3% of every american is a
professional driver of some sort. these aren't evenly distributed across the country. some places are going to get hit more than others. thinks of new york city and los angel angeles. highest percentage of workers. southern texas right along the mexican border is the next most susceptible place. car shares service uber said prices to use the service will go down when they don't have to pay for the driver in the car. uber bought a company involved in self driving trucks. the good news for drivers is they still have time on their side. much like planes, regulators expect humans will still be required to sit behind the wheel even if cars and trucks can drive themselves, back to you. the uk is entering exit negotiations from a position of strength.
the uk brexit secretary pointed to healthy indications of pmi and confidence data released in recent days to claim the economy is robust. speaking in parliament, reiterated the government's commitment to delivers brexit. >> there will be no attempt to stay in the eu by the back door. no attempt to delay, frus strait the will of the british people. no attempt to engineer a second referendum. because some people didn't like the first answer. >> meanwhile, uk retail sales fell by 0.9% in august. according to a survey. the data contrast with the recorded 1.1 growth rate in july which had enterprise to the upside. the retail said the data was the weakest since 2014, excluding seasonal distortions. join us now for the reaction. bring in dealer at investment tech. good morning. thank you for joining us. maybe the retail wasn't as bragt
as the previous month. put that aside for a minute. the pmi data. the services pmi that drove sterling to the seven-week high yesterday. what are you thoughts? >> i think it's very interesting brui because you see the bad data come out and it's blamed on brexit. and the good data come out and it's as well as it should be. short-term, there's reason to be bullish on sterling. long-term, the more fundamental issues the concern about what is going to happen and also the trade balance obviously will kind of counter thaw. >> david davis gave us early clues as to what happen. this will question of single market access, will that be what puts pressure on sterling if we get to that point. >> i think it will. the city focuses on the city. it's a jmajor part of the uk
economy from the lawyers who back it up. if those people feel forced to have headquarters outside of the uk, then that's going to have a de detra meant impact. >> others say it's losing effectiveness. is the euro still sensitive to what mario draghi says or more sensitive to what u.s. rates are doing. >> i think it's always going to be sensitive to what draghi says, but far more sensitive in the u.s. rates. if we there has been some talk about september coming into play with rate raise. irrespective december is very much in play. i think anything that we see u.s. rates start to rise further than we expect with the u.s. economy doing much better. kind of a much bigger impact on euro rates than what draghi says. >> so currently where do you see
it headed by year end. >> we're going back o to the dark days of 105. i think once the fed gets their election out of the way and they start to see the that's not going to have a massive effect on u.s. economy. it's only really the capex and energy that's had a down play. we see the rates going higher@st it's going to take us down to 1.05. >> how do you view the risks of the euro has relate to the election. if that does not go in prime minster favor, do we see downside. >> absolutely. if you loif you just look at th fundamental way the locals in those markets view the european market at the moment it's very bad. the chance at the moment for any of those to have the elections that could some way put in a pro
anti-european party would have a massive effect on the confidence. >> and traders are looking out for the next boj meeting this months. others saying looking at this currency level, it may have to change a bit before we see action. what is your call. is there a magic number. >> no, i don't think there is a magic number. with all of that, they just have to keep going. it gets to a point with draghi, the more he says without doing anything is going to become difficult to influence the market. >> before we let you go, the big number out of the states today is the services number. what are you expecting? 55. >> i think so. i think we've seen other than unemployment number for august, we always see large redactions in september. that will be stronbe strong.
>> thank you for that. before we go, quick peek at u.s. futures. back in line after long labor day holiday. let's see how they're fairing. that was the close on friday. s&p and dow jones up. i don't know if we can show you futures. that would be fantastic. >> last check looking at modest increases. we'll have to wait. >> here they are. slightly higher for all three embassies. that's it for today's show. see you tomorrow. >> have a good one.
september is traditionally the worst month, but one week in, things looking up. tuesday takeover, bayers sweetening offer for monsanto in a $65 million deal. would be the biggest acquisition ever. your money, your vote. presidential hopeful donald trump weighs in on interest rates as the fed debates next hike. it's tuesday, september 6, 2016 and "world wide exchange" begins right now.