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tv   Squawk Box Europe  CNBC  October 31, 2016 4:00am-5:01am EDT

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good morning. we are watching the european markets here. 38 straight weeks we have seen european equities but the report card has not been that strong. in terms of the numbers, you're expecting to see declines to the tune of 9.9%.
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so we are watching what is playing out across the european markets. that's impacting the broader stock market. the banks are showing the stoxx 60 down by 1.26. today is a day you buy because traditionally the market is high and then you sell out on the first of may. that's the halloween strategy, but some investors might be spooked by the corporate report across this earnings season. we'll drill down to see where the individual gainers and losers are on this market. top of the media stocks, oil and gas, fatigue is setting in around whether there will be implementation around the opec
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cut. telcos is also down. enough so that this is one of the weakest ones down 6. -- .57%. and industrials, down .40%. you're seeing a little pain this morning. food and drink, we are down 1.1%. some of the big luxury companies are moving higher. lbh is positive in the early part of the session. media stocks, wtp, 3.2% higher. it's the top performer in the stoxx this morning. let's take a look at how we are
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starting out this monday's session. we are down .38% on the ftse. the french markets today are down .41%. we are in retreat this morning for the october month, but it continues the dialogue of money leaving the european equities. let's move on to wpp, the stock is 3.6%. it has reported a slowdown brought on by brexit. however, the largest advertising group said that revenue group had 23% in the quarter. they told this program that uncertainty is weighing on his client's mind. >> the biggest issue is this low growth economy where clients are not willing to invest in brand. or more importantly, innovation
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which drives brand investment. and if you look at our release, we come out again with this simple fact that the strong brands in our annual surveys and other people's surveys are the ones that invest in innovation and brand. and unfortunately, jeff, there isn't enough investment in brand. there's not enough investment, capital investment, and really fundamental change. it tends to be a too incremental. >> we'll look at the numbers. as we said at the top of the last hour, the poison from morrissey are from his numbers in october that affected the wpp shares. you can see there on the right-hand side of it, you can see the big dip down. that was nothing to do with wpp. that was due to the move on the 20th of october when the shares fell 60% for the day because of
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horrific life figures. on a little more compare and contrast is wpp. our panel has one basic question, and that is about the evaluation discounts that you get or the evaluation premium you get from having a completely different set of numbers but in the same sector. for instance, privacy shares were on 23.4% for the quarter. but the question is wpp had a fantastic run where havas hasn't in terms of performance. is the premium big enough for wpp? and how these things work out in the sector? because they are a little cautious on wpp having start a
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long run to the upside. there are 12 holders, there are still quite a few buyers, but a lot of them are seeing their shares rally extraordinary, 148% over the last five years. in a world of very expensive stocks is a stock like wpp actually showing enough of a performance in the market given how well the numbers are in everything? >> we have edward sheen joining us now. what do you think? you have a stock here which has nail nailed the numbers time and time again. and it's down ticking the other week. are they premium? >> i think they are. there are several things here. first, the ceo is fantastic and will retire at some point.
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some people may believe he's going to his grave before leaving wpp. >> but that's the risk of it. >> that's one risk. another risk is the very obvious risk, which is the media advertising agency in the cyclical industry. they have tried to diverse the marketing services to make the business less cyclical. but it is still cyclical. and we're in a period of low growth. this is not typical of a cyclical company. when i look at all of that, it suggests that in order to maintain good growth and market share, which is a consolidated streak, which should become more difficult. they are probably not going to do that again in the near future. so the question is where is the market share going to come from with the overall market growth? >> you talk a lot of sense. but just on the other side, this kind of comes back a little bit. we see no reason why revenue
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cannot continue to grow over 3% in 2017. the same kind of growth they have had this year as well. despite all the fiscal events going on as well, i'll go back to the evaluation. again, i'm not a cheerleader for wpp, i want to say that. i'm looking at it in comparison with the other evaluations. >> let me push back, though. there's a difference between the reporting from the pound. you have seen this in terms of the numbers and it looked okay relatively speaking when you saw the pound weigh into the numbers. so i think the underline is very important for me because who knows what is going to happen with sterling that may eventually come off. it could have a big impact on the markets. >> it happens to be a good year for wpp. just set aside the hard work they have done and clearly that has shown up in the net new business for the first time.
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and that's the point, isn't it? you've had several major sporting events this year that inevitably you would expect wpp to do well around. the olympics, the euros, the golf, so on and so forth. so 2017 potentially could be a much tougher year without the opportunity to hang new business around that. >> what about asia? that's one we talk quite a lot about. china was a lot better this time around. great to china and india, et cetera. >> as we mentioned, the cyclicality of advertising, where is the word cyclical? in emerging markets. but in the development markets we are not probably that cyclical with growth. so on one hand, we're not just turn things off heading into recession, but we are in a world where costs are so revenue restrained and they focus on the cost. so the part of the debate is, do they treat advertising as some
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sort of earnings growth as they struggle to hit the earnings numbers. the difference is, in one sense, the markets are highly valued because of the bond prices. but for equities to be reasonably valued on that basis, it requires stability of earning. from at least that measure, wpp seems to be delivering. so as long as they can continue to deliver on that basis, then logically you would say there should be gradual reevaluation to save the bond yields as well. >> again, i would think about the digital side of things. i think the longer picture here is obviously as we go more digital, it's increasing for facebook and google. you wonder, wouldn't it be better to own facebook or google rather than wpp because they really hold the cards? >> great point. we'll leave it there. a very healthy debate. let's talk about the stock movements because wpp, this is a top performer on the market, but
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right at the top of the stoxx 600 is sika. they are preventing selling the stake in the company. the takeover of the bank started when saint-gobain was offering a price for controlling stake. they restricted the family's voting life essentially blocking the takeover. a swiss court on friday ruled in favor of the management. so you can see sika is up 12%. saint-gobain shares are drifting south. moodys warned buyers that they need to boost leverage in the near term. the rating agency says the complimentary nature of the two businesses should limit the potential for buyer disposal. and credit suisse is looking to cut costs. the share price performance is
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down .60%. the ceo told the financial times that cost saving projects with other lenders could mean a new level of savings. cost-cutting tie-ups have previously been resistant by banks. they say they are now in conversations about collaboration in the tech space and the banking sector. >> we were looking at the collaborations, weren't we? and one of our team members specifically mentioned that he was talking about hypothetically something to do with service as well, i.e. you could have tho those -- we were talking about the branches, we talk about this a lot in the u.k. when you go into a boutique. i find that by going into my
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bank. what about this? it's a little weird. we'll see how we go on that. now the shares over the last year are down 42%. they are looking for cost savings. but it is asia where he's hanging his hat and this is where he grew his representation. reputation. this is where some banks are pulling back just a little bit. goldman sachs is pulling back activities. and yet this is where the very large growth area is. that's one area to talk about. the other one is when you buy a bank and value a bank, what are you looking at in terms of evaluation? i just want to hear this argument as well.
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ubs is the challenge. trading around 16 times forward when they first came out. now they are trading at 12 times forward. on the pay ratio alone, it trades at four percentage points differential. ubs is trading in strong territory at .98%. credit suisse is trading at .65. so it's significantly lower. one of the big issues is the growth. and two, what valuation metrics should we value the country? >> you see all european banks around here -- i wonder whether it matters whether you invest in
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original names and there's so much risk. perhaps buying the broader index would be a better way to do the trade. >> excuse me -- what do you think? >> well, i like banks. >> individuals or the index? >> i start with the index. the european banks i like because with a steepening yield curve you get a benefit. i think secondly people forget about the cost savings that will be delivered to retail banks. because again, we see companies much more digital. companies that need fewer agencies, fewer branches and fewer employees in physical terms. so just as analysts take over in retail, banking is going electronic. that will deliver a cost savings in the medium term. >> i am just going back from the
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emerging market expertise, how much should we be concerned about a very aggressive growth wealth management strategy from credit suisse that has a lot of players spawning potential growth? on the back of the $1 billion companies plus are in asia or china. should we be worried or excited about china and asia? >> well, i would start off with the asset class. i wouldn't be so worried about someone growing in asset management because it's not that risky. it may not work out as they want but it's not that much risk. >> it is risky because the banks all want their business, surely. >> you're not putting your capital at risk in a big way. so from that perspective, if that's a core strength and they see the opportunity, they have a brand on that basis. save your strength. i don't know how that's going to work or not, but i can see how they are trying it. >> what is the catalyst?
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i think, you know, over a three-month story you have done phenomenally well because we have seen the index demonstrate clearly a reassessment evaluation of the banks. and it has doubled on a 52-week story from the low to the high. you can see that the banks index has done very well. the problem here is that the return on capital has been incredibly low compared to historic levels in just about all european banks regardless of whether they are investment or retail banks. so what is the catalyst for the major repricing next leg? is it discontinue edging up that we're seeing in bond yields, which indicate that we are going to ultimately see an improvement and that central banks are going to have to respond to inflation pressures and that would flatten the bank margin? what is it? because cost saving doesn't get you growth. >> i think that is right, jeff.
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i think what we're looking at here is we are looking at better margins, better return for next year. they will never go back to historic average levels. the pre-2000 levels you might as well forget. because the scenario today are very low growth, very heavy regulation of people fighting for a piece of a small pie in investment banking. that's the new reality. so that has changed. so we will not go back to pre-2007 for the sector, but they could still rise from the currently depressed levels. that's when you have to play. that will allow the tangible book values to rise a bit. and that has to provide the second leg. >> how much focus do you put on deutsche bank? it is one stock in the basket that seems to have enormous connotations on systemic risk in the banking sector. and this stock has rallied this month, which is contributing to some of the gains in october. >> i think, yes, you have to look at two factors. deutsche bank is one.
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the italian banking sector is the other. those clearly are two big sectors as a whole. i think there will be stories more to the positive side in the near term. it will take time and be choppy. but there are more upsides than downsides. >> you have dissed my view of looking at the individuals and now looking at deutsche as a stock we're looking at. i'm just trying to stir the pot a little bit, but i think that you trading equity derytives as your first entry point, there must be wonderful opportunities to trade the out liars as well. deutsche is what the main bowl is trading. we'll look at some of the brilliant opportunities. that one looks really good.
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>> there are very interesting opportunities on the banking level across the assets. if you look at the perpetual 2014 on, since february, the price is basically flat, okay? the price of 71.50 is now flat. the equity has done nothing but fall. if you look for a trade, you will say, in the bond world, the equity holds are very shy. >> i saw that. there is a potential downside like you mentioned, but for mainstream investors -- >> i think people are so desperate to yield that they actually -- >> buy a bond that is --
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>> equity exposure. >> to me it is phenomenal, the willingness for yield just because it is in the same currency. i go back to the point of why is it in local currency? what do you think? should people be piling into local currency when you get the definitive yield? you are taking currency risk. >> over the long term it makes sense. over the short-term i would be more cautious. i would buy the dollar in emerging markets because in terms of volatility there's a huge difference. because to say, you're already taking on a relatively risky yield. and we have issues with saudi arabia that concerns me a little bit. but it is yielding as of now. the problem is the volatility via the current volatility.
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in the long term, the yield differential is great. >> let's go back to karen here. >> actually, there are some terrific numbers. we are saying that was one off and now we'll go back to the misery story. >> let me show you what you are excited about, steve. this little curve as you saw a change in the direction for the month of october. the stock actually took off to reverse the sliding we have seen. and the stock price pretty much over the course of this year. the stock is down 20% year to date. so steven, referencing what a lot of investors were hoping is finally we had a change in the dialogue around this. but back to the same old story is the renewed strikes between the cabin crew unions that have
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broken down on sunday with no results. hundreds of german wings flights were kacanceled last week. you can see the caution back in the share price again today. and if you're talking about cancellations, it's always negative for revenue, for profit. so we must see better in the same old direction where the trade is again weak on this softer side, what was a stunning performance in the month of october. and let's push on to take on another stock. here's what we are seeing elsewhere on the board with vodafone. david einhorn's greenlight group has sold out according to investors. greenlight told investors they sold their stake in the german industry. that has pushed vodafone down
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1.16%. and many critics are quick to oppose the deal with the mega media giant set to perform this week. here's a look at the actual numbers. >> tv trends and m&a will be in focus as analysts and investors try to figure out where media is going from here. we'll hear from discovery, time warner, fox, cbs and charter and then giant disney next week. and on the heels of at&t buying time warner in the historic deal, everyone is trying to figure out what that means to the other media giant. whether at&t's integrated bohemuth will post tougher competition and consolidation between content creation and distribution. the only media giant to report so far is comcast, which got a boost from the election and the olympics. the question is how much other media giants will benefit from the political ad surge and how much comcast is causing viewing
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losses elsewhere. expect a lot of probing of what is underlying the nfl persistent ratings declines and whether it will turn around. it impacts fox, disney, cbs and cnbc. sports is in particular focus because of the expensive sports rights that are the blue holding the traditional tv bundle together. but with the nba season just getting started, we'll see if other sports follow in the nfl's decline. back over to you. thank you very much. we have the global head of equity deriverty strategy from paraba. where are we going to find the financials trade? >> if you like the financials trade, i would do the insurance sector right now. the european sector is very interesting because firstly we'll benefit from the imbalance. and the u.s. ten-yield will go close to 2%, at least. and i think the yield is very good.
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it's 6% dividend yield. that's a good place to be playing the yield term at that time. sweden makes a lot of sense to me. and the relative value trade, you are talking about the ftse 100 has had a fantastic run on the back of the pound. that would make sense why? because it's a sector that actually is a lot of growth that looks out for it. and in many ways, it contains very high quality companies but is also seen as the poor neighbor. >> the 64 million cac market. i hear you. but they are struggling to get the combined ratio below 100%. they in a cat fight pouring money into the sector. and it is a benign premium environment as well. i hear what you're saying about
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the yield argument. >> those are fair points. there's competition there, but they still make decent margins. but where the yield becomes important is in the life insurance market generating new business. if bond insurance policy levels are higher, they can make more attractive yields to the clients. up until now, with the bond yields falling, they are not offering anything attractive. so hopefully that's in the process of changing. >> just on the sweden story, you don't think that the omx currently reflects the value of those underlying strong businesses? >> well, to some degree yes, but i don't think fully. also the swedish currency is actually incredibly weak against most of the competitors in the euro and the dollar. and that gives us a big advantage. so we do talk about the competitive advantage that the u.k. companies have. but the swedish companies have a very good competitive advantage as well from the currency right now. and i don't think that is fully
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reflected. and if china holds up well, i think that's another strong point for a country like sweden with pretty big exposure. >> edmond, a pleasure. thank you for coming in. edmond sheen from paribas. on the spookiest day of the year, we'll blow away your monday cobwebs and take a look in the cauldron to see what trades have been giving investors nightmares this month. we'll be right back, everybody.
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we have the silver boot to get you through this halloween day. >> it is halloween and you are watching "squawk box." so european stocks saw a season in red as japanese and china underperform for the month. and a swiss court rules to stop
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the chemical's founding family from selling control in a long takeover battle. wpp has not hurt business after posting a 23% rise in surge for the revenue. but we are told there are many factors weighing on the business. >> it's difficult to concentrate on the top line and invest in innovation and brand when there's so much pressure and uncertainty around. and the fbi obtained a warrant for a fresh probe into hillary clinton's private e-mail server. polls tighten further as donald trump cheers the move while clinton calls the developments troubling.
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we'll try to look for potentially scary trades, trades scary already. karen has one for you. i have one that could be, but it is not scary. yes, the oil market has come up a little bit in the last week. it's the first negative week out of the last five or six weeks. but we are look at a down note falling back below $50 a barrel. that is posting the biggest one-day decline for brent since october. and opec cut production in algiers. but there's a lot of concern that i saw with the russian oil minister and others from opec that actually they are going to put the meat on the bones of a deal. so potentially that is the oil price story, which has been so brilliant for most of the last six months. again, it will just fall apart a little bit. and is that going to become a little more scary for the bull market traders. >> you have a witch behind you. let me give you a witch of a trade, though. this one has been sterling down
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over 6% as brexit fears have really circled around this stock, around this trade i should say. it's taking a pounding over the course on the back of the brexit vote. but there was release last week. 0.5% is the number. we are short-lived so the currency is going back in the opposite direction the media reports. mark carney could resign. the next catalyst is the inflation report later this week, but the central bank is seeing haunting rates at this particular meeting. no matter the side of trade you've been on, you have been caught off guard. a witch of a trade. >> it's not easy to make a whole lot of money in october, but then i guess take your blessings where you can. the reality is octobers have never particularly covered themselves in glory as full
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months. you've got through this one without any traumatic pull back. let's face it, there were plenty of more bearish analysts to suggest that we will see a 10% retrenchment in the equity markets before we rebuild again into the end of the year. so negative 2% for the s&p 500 at this point, okay, you didn't make money. but it's not a disaster. the french go to a little cash. see what comes post-u.s. election. because the market as we said at the top of the program, there's multiple urn certainty around the markets. markets don't like uncertainty. will we see a fed rate hike before the end of the year? which of the two candidates will be elected as u.s. president. one is slightly more favorable for markets. a lot of reasons to be cautious here. the negative 2% number as far as the s&p is concerned still
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indicates that people are finding a good reason to put money to work here. and inside a dealing or inside the legal side of it by knowledge individuals was down significantly in october month on month and year on year. which tells you that even those in the no are finding it hard to work out. >> only one has been a very scary part of the market. that was the post-june 27th market. >> that has been very violent. and there was another event that is lack of eventuality by foreign investors. remember what we said on air, we
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thought there was a lack of industry about it. and that is where the next scary problem is going to be. it could be oil, it could be the pound, it could be equities. but i genuinely think it could be a mixed problem. >> the reason is because all the traders that we know have been questioned and spooked by sterling. look how quickly it's dropped. what is typical about this is every safehaven is a question at the moment in this type of question. and the safehaven is that investors have blown the cobwebs off this one will the rest of the market gold. look at the march yields no longer a safehaven either. in some ways it's typical of the conversation we're having these days, but safehavens don't work at the moment. >> the ultimate safehaven is cash, which gives you auctionalty as they always say, i.e., if something bad happens. then you have the opportunity to at least pick up an asset at a lower price. and that's ultimately where a lot of people have been going. if you look at cash balances,
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they have only been rising since 2010. >> unless you've got so much cash you're not covered by government guarantee and then you have a problem because you are worried about the type of situation, having too much cash in a bank is quite terrifying. that may be scarier. >> it forces you to be tactful for long-term investment or trade. if you are a short-term investor, watch the scary trade in october. equities, currencies, fixed income or equalities, you can grow to twitter and tell us which october trade made you the most afraid. and thank you very much for coming. you have scary charts. have you got scary charts for us, anthony? >> everyone likes to get in the spirit this time of the year. the thing we do at m&g is to
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have a look around the global economy to see how to scare people, particularly -- >> do it. >> all right. the first shot that we have -- we have around $10 trillion of the u.s. dollars, well, the equivalent of u.s. dollars in terms of bond now with a negative yield. so obviously -- >> have they took my job? >> that's it. obviously. look at that mushrooming given the action of the central banks in terms of the quantitative easing and buying of their own government debt. so obviously to be in a world where we now pay for the honor of lending to government is quite scary when you think about, obviously, you're generating negative territory in terms of lending to the governments. and the governments what been opportunistic and have come to market to increase supplies.
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we had austria with a seven-year deal. australia with a seven-year deal. so they are making hay while the sun is shining and taking the capital from the markets. >> so why should i be scared about the $10 trillion in negati negative territory? we are on leverage here in europe, aren't we? >> what we are seeing now in markets is for bond investors in order to generate our performance you are increasingly taking the term that has collapsed and the negativity is on markets around the world. so risk-free assets, we are now taking more and more than we had before. so when you stop to see some sort of yielding is to watch investors sit on the central bank. >> and inflation shock, it is
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very weird how the curve is knocked upside down now. what is the potential shock to the market. >> the big recovery was in the february low. that has more than doubled since they are seeing rising fuel prices as well as consumption in the developed world. but not only that, we are seeing health care costs rising. the u.s. will have a big impact on the core pc inflator which the fed looks like in terms of -- they are very focused on hiking rates in december. and the inflation will start to come back to the citizens. >> let me then ask you about the resill yeience of the market ane
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willingness to own paper at these yields. there was a very good piece written relying on the kindness of strangers and need to look to our debt to look at what strangers -- you can apply the same thing to the u.k. but to what extent are we vulnerable in the u.k. in the moment right now from the foreign ship of uk debt? >> connie said the same thing. we are relying on the kindness of strangers to fund the current account. and the current account deficit is at a -- a lot of people have been expecting that with the further legs down over the course of the weeks. but that's very much the case in terms of bond market yields, in particular. investors have faced laws over the last three weeks.
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and now the big question is, how does the central bank react when they stop to break the record of 2% likely in the next 12 months. and within the sort of political pressure we have seen over the course of the weekend,. >> well, we have to move on. thank you for that. and nbc's tracie potts is with us now from washington. tracie, just update us then on the latest about this investigation taken on a new more dangerous twist than hillary clinton. >> reporter: well, it certainly is a political development that she did not want to see eight days before now, eight days before the election. the latest information is that the fbi now has a new warrant to
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take a look at this laptop that belonged to clinton's closest aide huma abedin and her husband, the former congressman who was under investigation for a sexting scandal. and that's where the e-mails came off. now the fbi will pull anything related to hillary clinton. what we don't know here is if this is a big bombshell? is it going to show classified information on the unauthorized laptop? or are they duplicates, just more of the same that the fbi already investigated and cleared hillary clinton of? and democrats are really pouncing here to say that it could be a violation of the hatch act because there is a violation of the law to throw something away at the last minute without details to gifz something to someone -- that
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could result in something illegal. she's already been cleared of an extensive fbi investigation. so there are a lot of unknowns and democrats are pressing for answers quickly. >> thank you so much for joining us, tracie potts, from washington. what will the post-election landscape of american politics look like under president trump or clinton? more and more comes up on that after the break. and head to our blog to vote in the online poll where we are asking if the fbi was right to announce a fresh probe into e-mails related to hillary clinton's private server? all that with world markets live on cnbc.com.
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the reopening of the fbi's investigation has boosted donald trump's support nationally, surging a nine-point lead to hillary clinton, which she held over her rival last week. real clear politics poll of polls now shows the gop nominee
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with the support of 43.3% of voters. clinton, meantime, holds a slight edge with 47.6% support of the electorate. we have newman morgan, professor of science at uc berkeley. what do you make of these numbers, xenia? >> i think it could ultimately save hillary clinton. the issue is that trump voters are very enthusiastic about trump and will come out to vote. the clinton voters are not quite as enthusiastic about her. people believe the polls are coming closer together as the level of complacency will be removed. many people will probably come
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out for clinton that we don't anticipate. we. >> i agree with you on complacency, but the question is whether clinton can win congress as well. because as you saw a greater move in the polls, the markets are nervous saying, wow, we may not have gridlock in washington for a change. we may have full control for the democrats. >> we aught to keep in mind that we are tightening in light of the recent allegations from the fbi. gary john was flipping 2 or 3 percentage points. i think the democrats have a chance in the senate, but the best they can hope for in the house is to reduce the large republican majority.
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>> well, we're not trying to understand what comey's real goal is in the latest announcement on the e-mails. but do you think -- he's a registered republican voter, if he's perceived as having done this to favor donald trump, will that backfire? >> well, i think comey's in trouble in way you look at it. if he hasn't revealed what was being looked at, then he would have gotten slammed by the republicans. he did reveal it, now he's getting slammed by the democrats. he was in a no-win situation. so it's not clear to me that his reputation is coming out in any way clean. he could not win. but as i say, this actually could turn out to help clinton rather than trump. it could backfire. >> you think it could bring democratic voters to the polls. >> yes. if you read the media, everyone is saying, this is not new. in the same way they said trump
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did that again? oh, this is not news. more e-mails, this is not changing our views. it's not changing the view of many people, but it may make people come out than otherwise wouldn't because it's a close race. >> what do you think that clinton will do in policy terms after the election, assuming that she wins? because of the close campaign that was run by bernie sanders? >> i think she's moved less economically. so a number of issues she's actually shifted. take into consideration, she needs the bernie sanders supporters, she needs the young voters. she has free university education. she said no to the tpp, the two trade deals, one with asia and one with europe in the short-term. it will be very hard to back away from nafta over the coming
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years, maybe in four years but not in the short-term. that's where the bernie sanders vote makes a difference. >> i agree with that. i think clinton has got to take note of the fact that a large majority of americans think the country is on track. the reason for that is, one of the key reasons for that is the growth in equality of wealth. so i would expect clinton to early on signal that she is going to follow an economic policy, which raided taxes on the rich, plans at the moment for tax increases that suggested that three quarters of the tax increase will be born by the wealthy. and i think we will see a stimulus package early on in the presidency, if it is a clinton presidency, to reduce spending. >> do you think it's possible this is a misread of the situation? moving to the left, okay, because bernie sanders pushed her there, but in the end she didn't have a mainstream competitor. they cleared the decks before
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the election so she was the heir apparent and bernie filled the vacuum of those not wanting coronation, to some extent. so would she need to move so far left? >> well, the point is there was a big run. and i think there is a feeling about the democrats didn't go far enough toward liberalism. and what is going to be a third obama term, they want real liberal policy out there on the economy, education, and the environment. >> going back to your original point, one of these things, how far it's gotten in one direction. mr. what is the chance to get this through the house?
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>> that was the perfect question. no, because we look at clinton's policy and trump's policy and say that is what is going to happen. we forget about the fact that whoever wins will have a divided congress. as we know in the american system, congress is actually an awful lot of power. so clinton, i agree with you, if clinton wins, the house will stay republican. so she's going to go through exactly the same partisan fights. if trump wins, the house will stay republicans but republicans don't necessarily like trump very much. so add into that is the fact that you have not just party fights but the intra-party fights. so you do have this inkrecredib
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pivot. >> we'll see more of the same up fighting on capitol hill regardless of the incumbent in the white house. >> highly unlikely clinton is not going to win 50% of the popular vote on current recording. that could make it unusual for clinton. they will never go up 50%-plus in any of his elections, but we tend to forget there -- >> it seems the top goes absolutely nowhere. strategically, what should happen? >> clinton doesn't have a good chance of working with the party across the aisle. president obama made it abundantly clear he was not
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interest interested. she worked with the aisle in new york. so there's sol reason to believe she would do a better job with it, but then counter that with the fact that there's a level here that we have not seen before. i think the real difference now is that whether we get payton or we get trump, the biggest talent they're going to face is huge. this will be the channel for the next administration. how to bring them back into a banking system. and i truly don't have the polici policies. >> just briefly, what does this
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mean for europe, any of this? >> well, that's a good question. if clinton becomes president, i think a significant strategic arrow would be focused early on two strong wheels important policy. a lot of people want the domestic situation to become right. what does that mean for europe in the long run? well, we can assume that we'll be toughening up to russia. i can't see much change as clinton is probably pro-ally. >> thank you so much for coming in. that is "squawk box."
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welcome back to "worldwide exchange." the cubs stay alive. chicago beats cleveland to force a world series game six. it's monday, october 31, 2016. happy halloween. "worldwide exchange" begins right now.

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