tv Street Signs CNBC November 7, 2016 4:00am-5:01am EST
good morning, everybody. welcome to "street signs." i'm louisa bojesen. >> and i'm caroline roth. >> the call-clear for hillary clinton delivers a big boost to equity markets. stocks in europe and u.s. futures trade sharply higher after the fbi says it will not prosecute the presidential candidate less than 24 hours before the polls open. banking stocks lead the way helping investors shrug off an 86% drop in profits from hsbc. mpbts shar shares in ryanair are flying high. but they do warn that a win from
donald trump could wreak havoc. >> i just want it to be over. just like brexit, give us the results in two days' time. i don't think it will make that much difference, unless trump upsets the polls. then chaos could ensue, but it could be entertaining for months. shares are also delivering big gains in postni. they raise the price to a five-year high. i think a lot of people are feeling what michael o'leary is feeling, huh? >> can't wait for it to be open. it's like a soap oprah. now the latest turn with the fbi clearing clinton. >> the last poll gave, what, a four-point lead to clinton? that's nothing. >> there was another one which was narrower than that, 1.6% for her. it could go both ways.
we know from brexit that we can't trust the polls. it could go either way. >> there are so many factors to be throwing up here during the actual voting hours. the european equity market is opening in positive territory and seeing quite a bit of green on the screens out there. we are looking at the stock share of 600 higher than a quarter percent as seen right here. so it's climbing steadily higher this morning. and that picture there is also seen in our european forces, the main european equity markets. there you have them up by 1.5%. that are outperforming better than some of the others. the buying sectors, banks, basic resources higher by more than 2% construction material right up there as well. and to our top stories, dow futures rising over 200 points on the news the fbi has completed its review of the newly-discovered e-mails from hillary clinton's server and has
not changed its initial conclusion. writing to capitol hill lawmakers, fbi director james comey said there is nothing new to go after hillary clinton. following sunday's announcement, the republican camp is not happy. jennifer johnson -- >> did you see a movie about jennifer lawrence? >> no. >> it seemed like a freudian slip. >> no. it just slipped. >> right now she's being protected by a rigged system. you can't review 650,000 new e-mails in eight days. you can't do it, folks. >> reporter: but this afternoon the fbi director james comey wrote to congress saying, we have not changed our conclusion that is we expressed in july.
when the fbi decided not to criminally charge clinton for using a private e-mail server while secoretary of state. most of the e-mails were duplicates already seen. >> we're glad this matter is resolved. >> reporter: in new hampshire tonight with kazih kahn, clinton made no mention of the fbi investigation. sticking instead to a script of unifying the country after this nasty presidential race. >> we have to begin listening to one other and respecting one another. >> reporter: with the finish line in site, the race is close. the latest nbc news/wall street journal poll shows clinton ahead 44% to 40%. both candidates are criss-crossing the country hitting up key states like pennsylvania, michigan and florida that could tip the election one way or the other. in the final day of this campaign, trump will visit five battleground states. clinton will go to three to try to win over undecided voters.
jennifer johnson, nbc news, washington. we are now joined by nick nelson, head of european strategy at ubs. nick, you're about to talk about the earnings, but we can't ignore the u.s. elections. how are your clients feeling about this? because there are so many twists and turns, are you telling them to steer clear of the risky assets because you don't know what is around the corner? or are you telling them to take on any positions? >> look, the difficulty is, once we get past this risk event, which is a large one, then we have three or four more between now and the end of the year. once we navigate the u.s. election, we have on december 4th here in europe the italian referendum important for italy and ren zee. we have december 8th, the ecb meeting to talk about extending qe or tight anything. and we have the expected federate hike. even once we are past the election, in a way, yes, on the actual day maybe investors don't want to have a large risk
position going into it. but you have to invest over a one-year or 18-month view. and people have to have a position of sorts. >> a lot of investors are more cautious about their holdings. what we saw last week given the tightening polls between clinton and trump, we saw a dash for cash. money market funds are a proxy for cash. we saw inflows of more than $36 billion. what are you telling those investors who really don't have any appetite for -- that makes your job as a european equity analyst so much harder, doesn't it? >> it does. you see a reflection on the european equities in the asset class. if you look at the etf flows from u.s. investors, you see nine or ten months of outflows and selling. so actually people have been sitting on the side. low cash yields are nothing and some places are a negative return. and government bonds are very low yields, corporate bonds not much more. and people have been in a risk-off mode. and i would argue, look, you've
got a dividend yield over 3.5%. that will be paid amidst the high risk sectors, but that will be paid, we think. and that is pretty high pickup compared to yields as well. >> we had a guest on last week who was arguing the case that the short-term positioning up to the election, which tends to be more technical, and that switches into a much longer-term investment scenario. what do you think the longer term investment scenarios could look like in europe for independents? >> well, look. i think in reality, yes, on a day you want to get a big move, it will be if there was a trump victory over where the expectations over. but overall, it won't change the rates environment or the effects environment dramatically. and therefore in europe, we don't think there's a huge difference. of course, there will be some sectors, be it health care or be
it defense, which may have different exposures on the candidate's policies. but we think the exit market is much more important to what happens in earnings. >> if it were a trump win, and if we were to see trade become a bit more difficult. he's indicated so far we'll see a pull-back in some of the trade relations. do you think that would hit europe substantially? do you think people would position for that? or would it be kind of a, let's see what type of deals could come eventually down the line? >> i think it will happen gradually. and we should put it in the context -- there's been a lot of work on the asset team on ibs on this. that the trade was relative to global growth. we're slowing. so i think there's a phenomenon in the background, which is, of course, not great for markets over the median term. but here we're talking multiyears or ten years rather than the next 12 months.
but yes, i think if you were to see more protectionism in the u.s. and maybe in the u.k., maybe in europe, that could be negative for global growth. >> okay. nick, you're staying with us. by all means, get involved and get your e-mails through for nick nelson so we can use them. the e-mail firstname.lastname@example.org. we are also live on twitter, @streetsignscnbc. or you can tweet us as well. coming up, the bw chairman is the latest high-profile name faced by german prosecutors over market manipulation. we'll have the full story right after this. don't go away.
we'll talk earnings, plenty of them this morning. run ryanair posted a $550 million share buy-back. however, europe's largest carrier by passengers continues to warn about the risks of brexit and a weaker sterling. michael o'leary told cnbc about the headwinds and tailwinds likely to impact the airline sector in the upcoming months. >> the environment is good and since we have low oil, we have had low oil for the last 18 months, the low factors are rising. but we have headwinds of brexit, which is an uncertainty for the next two years. and it will dampen the sterling, dampen the growth. good for the model of those who trend to the low airfare carrier. >> well, hsbc shares are striking the high notes after the bank reported a sharp rise in its core capital ratio to 13.9% during the third quarter
boosting the outlook for the near term dividend payments. this despite posting an 86% fall in pre-tax profits as it suffers a $1.7 billion loss on the sale of the brazilian unit. shares are trading higher for the dutch rival. the company is offering $2.5 billion euros and voted to take on the pension liabilities as part of the deal. and in retail, shares in tesco are trading lower as 20,000 customers had money removed from their account by fraud st fraudsters. the ceo says the loss will be bore by the bank and not customers. you've been looking very closely
at this, what do you think of the european earnings? >> we have halfway through. it's been reasonable, there's been earning levels at 25%. but what is more interesting is the top line have the best net beats for five quarters. and this is critical, because we have had no earnings in europe for six years. and in the last year and a half, we'll had no top-line growth. so it is hard for companies to generate ubs growth. so we are seeing that starting to improve, that's just a glimmer, but it could be an inflection point there. >> and then we look to 2017 and you say the consensus estimates look too high. that it should be closer to 8%. why? >> well, look, let's put this into context. the consensus numbers have been 8% to 15% every year. for the last six we have had zero. so the market is conspicuous
already. you have a little bit of leverage. you have the base effects from oil and it will be up dramatically. maybe the banks as well. and both of those will get you to 8, but some will be in the teens. we think that is too high. we think the market will chair the 8% growth. that will be enough. >> nick, whenever you talk about beats, the top line or the bottom line, you have to be skeptical. because leading after earnings season, you see so many downgrades. is that the same thing this quarter or not? >> well, look, if you look at the last six years, that's been the case. but not this quarter. so in september and october, we were basically flat. so you can say that these beats are maybe more credible than the usual beats because you haven't had this loft of downgrades in the three months immediately before. so i think that is actually another positive sign when we look at the data. >> okay. we'll see where the quality or
credible beats are actually sustainable. nick nelson, head of european equity strategy at ubs. the u.k. prime minister teresa may says the government has a, quote, strong case for overturning the high court ruling which says parliament must vote on triggering article 50. she made the statement after arriving in india on a three-day trade visit. davis will lay out his response to the high-court ruling today. the investment manager who brought the brexit case before the high court and entering the u.k. leader nigel feraj clashed over the vote. >> i just want to ask her, what part of the word relieved don't you understand? >> in this case, have you read the case? >> yes, and you're arguing that parliament should have a say. but do you want us ultimately, okay, you accept we're leading the european union, do you want us to be a part of the single
market? >> i'm not the politician here. i'm the person who saw the elephant in the room, which was there was no legal certainty. you should be my biggest fan because i just created a legal certainty so that teresa may can now rather than appealing have a debate and leave. not interrupt her timetable. so it actually is legal certainty. >> what you have done is given those in parliament, you argue that the referendum does not mean we should leave the single majority, you have given them a chance effectively to overturn the prime minister's wish and to man data. if that happens, you will have stirred up the political upset we have ever seen. >> so shall we suck the bmps and go home? we have a representative democracy at the moment, which means they have to go in there and debate. that's what you argued for the whole way through. which is parliamentary sovereignty. >> this is not whether the british people are sovereign, that's the real argument. >> jeremy corbyn says his party
won't block article 50 from being triggered. however, labour is pushing for brexit negotiations. the labour leader also welcomed the fresh election telling the newspaper that his party was ready for challenge. and speaking to cnbc, mayor kahn gave his thoughts on the brexit ruling. >> the key thing for the government to show that they have a plan, they need a plan before -- they have to have a plan to make sure when we negotiate with the eu, the deal we get is good for london, it's good for our country, good for the eu, good for businesses. it's really important. >> reporter: are you hopeful it could be more of a soft brexit? i know you were worried about a hard brexit? >> the problem with a hard brexit is there aren't any winners. a hard brexit is no good for london and the u.k. it's no good for the eu. what is really important is access to a single market.
what is really important is the ability to -- what is really important is the relationship to financial jobs with possible financial services. i've always said london needs a ceo around the table when it comes to the government to being prepared for the deal with the eu. that's my hope. i hope the government listens. the british public voted to leave the eu, to leave the structures and to leave the legal institutions. what we didn't vote to do was to have fewer jobs, less prosperity, less growth. >> reporter: and do you think if the decision doesn't go growth, do you think parliament should push to actually have transparency of those negotiations? >> well, what is important is the government has a proper game plan. what our objective is, of course, we can't telegraph the means by which we get the objective, but the british public voted to leave the eu, but it's important when the government has to deal with the eu, they don't sacrifice job growth and prosperity. the jobs aren't going to frankfurt, they are going to new
york, singapore or hong kong. and i sfeek americans and canadians and indians and japanese and chinese men and women, entrepreneurs and investors, they love london. they love the u.k. and want to carry on doing business with us. and the government's job is to make sure they get a good deal with the eu. >> reporter: what about foreign investor, major? could they be put off with the volatility around the brexit within the u.k.? >> at the moment they are not. they have heard the message from me and others. london is open total ent, open to people, open to ideas, like we have been for more than a thousand years. we have to provide reassurance. once we have the e-negotiations completed, we'll have certainty. in the meantime, my message to investors and america and canada and elsewhere is london has the best people in the world. we have some of the most talented youngsters in the world. we have innovation. we want to do business with you. that's not going to change. we'll, nick nelson is still with us from ubs.
which could possibly be more important for european equities the next year, say, brexit or the u.s. election? >> it depends if the u.s. election goes to the polls as they say, i suspect that is more of a relative status quo. i think the brexit negotiations are something new and clearly their impacts are from the u.k. but also for the eu as well. so i would have thought that might be a higher impact than what we would say is so far the ftse has been relatively good performer, partly just because of the koucurrency effects. so you have 5% of your effects from overseas due to boosted earnings. but the u.k. looks more expensive than other european markets now. and we think the growth we have had so far post the vote will probably slow next year. as the consumer is hit with the higher costs coming along the chain. so we have a preference over europe over the u.k. in that
environment in 2017. >> is it too early to take profits on the run that the ftse has had? >> i think that we're starting to get to a situation where sterling, because of the speed in the falling sterling, is slightly problematic as a whole. so i would argue, actually, if you want to rotate, i'll be rotating now into europe and the u.k. >> what if we see the high-court ruling being confirmed by the supreme court and actually the parliament does get to vote. and by the end of the road we'll see a softer brexit, not a hard brexit. maybe we'll see a sterling around 130 or so. that level would be good for equity markets and not too bad for inflation. wouldn't that be a sweet spot for investors? >> maybe. but our view is that we still go ahead where we'll see basically sterling likely to weaken, partly because of the macro effects. we have the large account surplus and a pretty big budget deficit as well. so we are depending upon the external flows. so we argue that it continues to weaken a little bit from here. >> nick, i want to thank you for
that. nick nelson, head of european equity strategist at ubs talking all things about you can elections, brexit and european earnings. back to european corporates. the german prosecutors probe into the market manipulation now expands to include the chairman of the supervisory board who was cfo when the diesel emission scandal broke in september 2015. nancy joins us now. two things. we have the invest into potsch but also cheating when it comes to audi cars. are either impacting the market today? >> the investors did start the session a bit in the red, but the key is we'll start with the investigation reaching the chairman. because a lot of investors and analysts i've been speaking to say it's not a huge surprise given and he was cfo at the time. when you look at the nature of the investigation, it's looking into whether or not the company was too slow in notifying investors. that, in fact, they were having the discussions with the epa,
with carbon and in the u.s. because they admitted to u.s. officials around september 3rd they, in fact, knew about this device and didn't come out until september 18th. that was the epa who reeled the information. so a lot of people said, wait a minute, why were you so slow? volkswagen has always maintained they were still in talks and thought it was too early to release this information. and also they thought based on past experiences, we are talking about an impact fine around double digits to throw triple-digit millions. nothing in the neighborhood we're talking about today. so they simply didn't think it was immaterial. yes, whether or not it's a surprise you can put to the side. everyone is standing by him. the companies are saying let's let the investigation take course but nothing to worry about. now when you talk about the audi situation, this is very different. we are talking about the report that volkswagen confirmed and told me earlier no comment on this one. what they are discussing when you look at the specific support originating in build is potentially co2 emissions.
that, in fact, there was a device, something put on the car to allow audi vehicles to avert the regulations in the real lab environment. in other words, the co2 emissions read differently in the lab verse the real road. so similar to what we're talking about with the defeat device, but here talking about co2 emissions versus the knox emissions what european regulators look at. >> 18.2 billion or something for the scandal. and the u.s. court gave a final approval of $15 billion for a settlement involving half-million two-liter cars, but they still need to look at bigger cars. could the numbers be higher? >> volkswagen says this is what they think is substantial for the moment. but yes, a lot of this rests on the uncertainty of the litigation question. of course, the doj settlement, which is the big question mark hanging over the company. volkswagen's ceo says he wants to reach that by year end. so investors are waiting for that resolution, but interesting you point out the uncertainty
still with the 3.0-leader engines because that involves audi models as well. so some investors are saying, we already knew audi vehicles were involved with knox and the co2. but some are not as concerned as they might otherwise be. >> we know class-action lawsuits are a thing that the u.s. investors like to focus on, not necessarily in europe. do you think it's a distinct possibility that something like this of this scale could happen in europe? >> in terms of the class-action lawsuit? we have seen the shareholder lawsuits broaden, we were talking to the guest a while ago representing elliott management saying they are bringing the suit, but the burden of proof is very different than what the timing should be. this is a difficult hurdle to show if board of management was negligent. then we have the statement of them saying they did follow the market capital rules in germany. we have to wait nor the outcome
of the investigation. >> nancy, really appreciate it. we want to bring you breaking news. janet reno, the first woman to serve as the u.s. attorney general, has died. that's according to abc news. so once again, janet reno, who wa the first woman to serve as the u.s. attorney general and the epicenter of several split cam call storms during the clinton administration, has passed away. we need to take a quick break. we'll head to world markets live. it's our blog that runs throughout the entire european trading day. you'll find lots of information and updates on there. we'll see you back after the break.
signs." i'm caroline roth. >> and i'm louisa bojesen. >> u.s. futures trade sharply higher after the fbi says it will not prosecute the presidential candidate with just one day to go before the polls open. and banking stocks leading the way, helping investors to shrug off an 86% drop in pre-tax profits from hsbc. and shares in ryanair flying high after the airline boosted its growth forecast, but the ceo michael o'leary warns a win for donald trump could cause havoc. >> i just want it to be over. just like brexit, i wish it was just over. give us the results in two days' time, i don't think it will make that much difference. unless, of course, trump upseptembers the polls. in which case, chaos could ensue but it could be entertaining for months. and postnl is being sent to a
five-year high. and we are just one day away. i mean, this seems like the longest campaign ever, dunts oe it? and i think it was the costliest of all times. >> really? >> it seems like the costliest and seems like the longest. >> there's been so much stuff, so much noise. there's been so much noise for so many different arenas. we have covered everything from -- the whole gamete of people out there. >> a very ugly campaign. but hey, tomorrow, american people will go to the polls. and hillary clinton got the boost yesterday with the fbi director james comey saying they will not prosecute clinton criminally because they didn't find wrongdoing in the e-mails, confirming what they found in july. the s&p 500 futures surged on the back of this up 31 points. the dow jones is up to the tune of 260 points. and the nasdaq set to add 83
points. this is after we saw a fairly miserable week for wall street last week. the s&p fell for the ninth straight session. we saw a four-month low down 2% because of the tightening polls between clinton and trump. here's what is going on for the european front. the cac 40 is up 2%. the xetra dax is adding 1.9%. and the ftse 100 showing considerable gains of 1.6%. we also have plenty of earnings to push us up like hsbc and ryanair, banks stocks and basic resources leading the way this morning. we also saw macro economic data not supportive, but no one cared about that. i want to show you germany factor orders unexpectedly dropped last month. and the currency markets, we're also seeing the clinton fbi story unfold because we're seeing a surge in the mexican peso, which really is seen as a proxy for the presidential campaign. because donald trump's policies
are seen so negative for the mexican economy and emerging markets in general. so we're seeing that at 18.61. and the dollar is also surging against the japanese yen, against some of the safe havens which have seen inflows last week, 1.5% to the upside. and euro/dollar at 1.1050. and caroline, we're just getting some news through on mercedes via a press release. mercedes-benz is announcing a very successful october because of strong unit sales seen in china. they have increased the unit sales by double-digit growth in october delivering a new high of plus 11.5%. in europe and asia pacific, they said they achieved the highest month sales ever. and in china, which is the best single market, they have already gone past the unit sales of the full year of 2015 for the month of october as well. so they have done very, very
well. very strong numbers coming through here. they are also saying at the milestone of 5 million mercedes-benz compact cars sold since their launch that was passed. unit sales by region and market in europe, we're looking at the increase of 9.6% in terms of sales there. and the highest number ever sold in an october full stop. in germany, which is their domestic market, they're looking at something like 24,000 vehicles that have been delivered to customers. so very strong sales figures from mercedes at this stage. we'll talk to john bilton, global head of multiasset strategy from jpmorgan strategy. good morning, john. >> good morning. >> we've got a day to go. and we'll know whether or not we're looking at a very different world or a slightly different world. what are we supposed to be thinking at this stage? and what do you think is going to happen with regards to either candidate winning? >> well, i think the market will breathe a sigh of relief once
this uncertainty is over. that we can be fairly sure. i think if we see clinton taking the white house, that's a bit of a continuation of what we've got. stocks sold off last week as we know. they're relatively poised. we are seeing a bit of a bounce today following the fbi stories over the weekend. and, of course, i think technically the s&p is naturally looking quite oversold right now. so this certainly could be a nice relief rally once the uncertainty is behind us. of course, if we would see donald trump take the white house, then i think markets will have the uncertainty continue because, of course, he's an unknown candidate. unknown quantity. the one thing i would come back to in that event is although he brings a lot of theater with him, the u.s. constitution is set up quite robustly. and i think that if we were to see any sell-off, then the checks and balances would come under scrutiny in the political arena. and number two, the underlying strength of the u.s. economy, which is posting some decent data beats over the past six to
eight weeks would come through again. so even in the event that we were to take a step into the unknown with donald trump, we would actually put our faith back in the u.s. economy and look to buy on any signs of weakness. but broadly speaking, i think the markets just want this behind them. they have to focus back on economics and fundamentals. >> republicans have controlled the house and senate for six years and it's best next to impossible to get anything done given the democratic presidency. could we see a similar issue with regards to trade especially if we see the republicans run off with one or both of these institutions now? >> well, yes and no. >> sorry, and if it's a clinton win. >> if it's a clinton win, yeah, historically markets seem to like those kind of stalemate situations. and the reason being very simply, only the really important stuff gets done. so the thing about the u.s. is that there's a lot of technocracy behind the scenes. ultimately, if you have a
reasonable team, both a republican congress and a democratic president, then ultimately i think that there is a collective will to want to move things forward. i think this is why the markets are responding better to hillary clinton than perhaps to donald trump. because she is a seasoned politician. of course, trump is unknown quantity. and i think the markets are just focusing on the ability of perhaps a divided executive in congress, being able to get the most important stuff done. so i don't necessarily think it's a major impediment. ultimately what it will mean is that we just continue to see quite aed lo of rhetoric rather like what we have seen under the obama administration. and back to fundamentals and economi economics, which they rightly should be doing. >> we'll fast forward two days. based on the polls, we'll say hillary clinton will take the white house narrowly with a win. what are the declines going to do?
why and what else should they i do? >> you raise an important part. once the politics are aside, we need to go back to long-term fundamental investors. that's how you accrue wealth in the long run. we wrote a paper, "long term capital markets" that looks at returns for simple balance portfolio moves over time. and the future is not bright, quite frankly, for a static 60/40 allocation. it needs to be more inventive. look at the longer term fundamentals in the economy. we do see lackluster performers around the globe. this will be part of a balance portfolio, like credit, for instance. we always urge investors to go back to look through the short-term noise and make decisions based on the long-term fundamentals, but use these opportunities to enter the markets. >> what i find interesting is
you make a case for active investing versus passive investing. but we know active investing has returned the same sort of potential for investors as is passive investing. why do you think that will change? >> well, if you look at the situation over the past five or six years, we have seen an unprecedented flood of capital into markets. one thing i would argue is that liquidity is the alpha. if you have an awful lot of money chasing opportunities, there's no bargaining for the capital. everything gets invested and evaluations tend to move as one. as we gradually see the central banks normalize, and the feds are the first off the mark in doing this, it will be steady and gradual. but as we see capital less available, then there will be more opportunity to differentiate when investment venues and also with returns, potentially low growth, you will have to work harder to find the opportunities. so there active investing should come into its own. >> a lot of fund managers watching this morning are very relieved to hear all that
because the industry has been beaten down quite a bit. thank you so much. really appreciate it, john bilton, global head of market strategy at jpmorgan. and the markets have not changed much on the result of the fbi's conclusion. james comey said there's no new grounds for prosecution on hillary clinton. this moves two weeks after going public with the new examination into the case, but following sunday's announcement, the republican camp is not happy. >> a final poll from nbc and "the wall street journal" shows clinton holding a four-point lead over trump. in a four-way race, she holds 44% of likely voters. the republican rival is at 40%. let's go out to tracie potts joining us from washington. either you can't wait for this election to finally happen, has the clinton campaign actually
reacted to the fbi news? >> reporter: so it's interesting, we did hear sort of a light, i told you so from her campaign spokesperson, but clinton didn't talk about it in her last appearance last night. what she is talking about is what happens on the 9th of november, the day after this election. she's now talking about reconciliation between people who have been on very opposite sides of this campaign. as for donald trump, not accepting the result, he is talking about it, saying the fbi is covering up for hillary clinton. that she's guilty and that voters need to deliver justice when they head to the polls tomorrow morning. it's going to be a really busy day. top candidates are running out, their running mates, we'll see al gore and sarah palin. the battleground states are going to see a lot of the candidates over the next 24 hours. they will both be in pennsylvania and michigan. that's a blue state hillary clinton is really trying to hold on to. donald trump trying to make end
roads there. in north carolina, which really could be pivotal for this election. then he's also going to visit new hampshire and starting out in florida today, he's got five states on his agenda today. >> wow. tracey, i was interest in the comments made by mr. pence yesterday who said that, of course, the campaign would accept any results if it is clear. what do you make of that? >> reporter: well, it was the cleanup job from when donald trump said in the debate that he would not accept the results if he thought they were unfair. and then we've heard him and his surrogates and pence since then saying, if the results are clear, if the results are clean, really sort of leaving the door open for a challenge, depending on what happens. you know, there are several states like florida where things are extremely close. like pennsylvania where they have these voting machines that do not have paper backups. so if there are questions about that, there's nothing to go back to. certainly some areas where we could possibly see a challenge
if it's a close race. >> all right, tracie, thank you some. we do hope you will get some sleep over the next 48 hours. tracie potts from nbc news. just want to mention to you some flashes just coming through from moodys, talking about spain. they are saying the new minority government is struggling to implement reforms and that it will be negative for credits. moodys saying they have little confidence spain will meet the european commission's fiscal targets. and the possibility of another round of early elections in spain remain. so they are talking about possible early elections in spain. >> again? >> yeah. >> i don't think i can deal with another round of general elections in spain. >> on top of the other elections we're looking at, right? italian referendum on december 4th as well, right? so hundreds of protestors clashing with police in florence while demonstrating against the italian prime minister ren zee's
constitutional reforms. the violent scuffles started when demonstrators tried to reach the venue where renzi's democratic party was holding the annual conference. angela merkel's open door refugee policy has caused a rift between the chancellor and her coalition partner. the leader of the csu has admitted he was wrong to publicly criticize merkel. but speaking at his party's annual convention, he said there should be a cap on the number of people allowed in the country. merkel refused to take part in tenth because of the disagreement. the greek prime minister has reshuffled his cabinet in a speed-up to bailout reforms. he replaced the more flexibility democrats to work on the bills imposed by the creditors. among the high-profile changes, the economist dmitry
papadimitriou was appoint ed economy minister. panos skourletis moved from energy to interior ministry. thodoris dritsas dropped from shipping ministry. the greek prime minister said the debt-burdened country was near the end of a long period of very difficult decisions. let's switch over to oil, algerian energy minister said the deal with algiers has not been called into question after failing to reach an agreement on the e the tails of the plan last month in vienna. they will meet ahead of the opec meeting on november 30th. brent crude recovered lost ground after a week of sharp declines. brent crude is up 1.1% at 46.13.
wti crude is up 1.6%. we saw both contracts down roughly 9% respectively last week. hadley gamble is with us. you have been speaking to a number of top oil producer last week. are they still hopeful? >> it sounds that way. i mean, basically what we're speaking about at this oil and gas conference on friday was about climate change and the big question is if you're putting a billion dollars into climate change when you're a multibillion, multinational oil company. it's not that much. what are you looking to do? it was interesting because i did get the chance to speak exclusively with the ceo of saudi ramco, they said this is things we have not done before. and this is more of an economic boon for us rather than a drop in the pan. so i asked him about that and if we can expect oil prices to go up in 2017. he basically said this a few days earlier. take a listen. >> almost a couple days back, i
think it will up gradually start going up in the first half of 2017. we see the gap between demand and supply closing. it will be closing by the first half of 2017. the inventing levels start to go down, and we expect more going forward. the issue that we are seeing even though there is additional supply, there is also a demand going into 2016. we anticipate almost the same in 2017. there is an additional demand. there is more reduction coming from countries, no doubt, but at the same time the supply/demand balance is getting closer together. and hopefully we'll see prices going up. >> he is quite positive. but you have to remember for saudi arabia, this is a
sensitive time between $79 and $80 is their breaking price. so this would be very good news for them. all eyes will be on this november meeting. the producers and what is going to happen with that. and if they're going to continue with what we heard out of algeria. i think that's the hope everyone is really expressing as we spoke to a couple other ceos as well. that was the train they were trying to get on board. but i think in terms of what's happening in saudi arabia as well, you have to remember they are working diligently to diversify their economy away. and, you know, something like six major organizations advising them on how to do that and every ministry has an advisor. so a lot of information flying around in saudi arabia today. >> but it also seems like the message more so out of saudi is that there is more of a balance between supply and demand? >> that seems to be the case. and i think we'll ask about the ipo, they basically didn't make news there. we are working toward that and still working at 2018 as the date. so, you know, in terms of the interview itself, it was a good
couple of minutes with the ceo of saudi aramco. we were hoping for more but you don't always get what you want. >> next time. >> yes, indeed. >> thank you very much, hadley gamble, joining us there with the latest from this event. coming up on "street signs," it's the final countdown to one of the most bitterly fought and controversial elections in u.s. history. with the fbi clearing her name ahead of voting day, does hillary clinton now have a clear path to the white house? more after this.
matter more than ever. and that she would like to see them as a permanent member of the u.n. security council. this just off the back of the meetings taking place in new delhi. she's just talking about how more than a billion pounds of deals are to be signed during the india trip. she says that they will be considering improvements to the visa regime if they can step up returns of those who have overstayed. and teresa may also saying that they will start structured talks at an official level for deeper trade and investment between the u.k. and india. >> no surprise that she's smoozing the indians because she wants to show the world, hey, even with brexit, we can build very strong trade ties with fast-growing markets. and at some point in the near future, india is going to outgrow india and the population growth is going to be faster, too. so she wants to be well-positioned here. the only caveat here is that she might have to concede when it comes to visas, issuing visas, that's something that the modi
government has wanted. but she wants to limit immigration. so i don't know how she's going to walk that tight rope. >> a lot of people are saying nobody is going to be lining up to do trade deals because we haven't had the triggering in article 50. and we don't know how an exit is going to look and what the implications will be down the line, for example. but for sure we're going to see a lot more of this over the next two years while they go through all the motions. we'll go back to the u.s. elections. less than 24 hours to go until the poll stations open stateside. the final nbc news/wall street journal poll gives hillary clinton a four-point lead over donald trump. the survey came right before the fbi cleared her in its latest probe saying it is sticking with the recommendation from july not to prosecute the presidential candidate over the e-mails on her private server. let's get out to hessa naji active in the real estate business, commercial real estate, joining us from los angeles. thank you for getting up early or staying up late for us. which candidate is better for
your business? >> good morning. it's a pleasure to be on the program with you. that has not really been clear based on the economic plans that both sides have shared, which have been very limited. there's really not a clear choice that you can translate into direct effect on the economy, direct effect on the real estate business. what's important that we're hearing from our clients, all types of clients, whether they are private individual investor, large institutional investors, is whether the economic expansion can keep going. we're in our seventh year now and most recoveries in the u.s. have lasted on average about five years. the fundamentals certainly point to a continuation of job growth, whichever administration is really -- whichever side is chosen as the next administration. but the question is, to what degree will the economy continue to create jobs? and to what degree will we see the kinds of favorable
fundamentals on the real estate side. the commercial real estate has really stood out globally as a safehaven because of the yields and the 5% to 7% range at a time when this late in an expansion we would be seeing a lot of cranes and a lot of overbuilding. we're not seeing that. and therefor there's still a lot of capital attracted to commercial real estate. there's some uncertainty regarding the momentum of the economy. and i think whoever wins the election will begin to see some clarity. and that should begin to paint a better more clearer picture of where the economy is headed. therefor where real estate is headed. >> what about the fed, though, in the case of a clinton win. market participants expect to see a 25-basis points in december by the fed. would that derail some of the momentum that you have seen in the markets? >> we don't expect it to because it's already been baked into expectations is that the fed will start to raise rates because it is happening for the right reasons.
we're beginning to see some inflation build up. we have seen such consistent job growth here in the u.s. without overheating and without really building up too much pressure on inflation, therefor the market expects a measured pace of interest rate increases that coincide with continued job growth. therefor continued improvement of occupancies and rents. the most important thing that we have seen in the last five years has been the tremendous recovery in occupancy levels and demand for various types of real estate. and most people think about commercial real estate in the u.s. as office buildings and shopping centers and apartment buildings. but there's a wide range of investment choice, whether it is self-storage properties or medical office properties or small restaurants, single-tenant restaurants showing phenomenal yields. so there is a wide range of investment choice that's really benefited from this expansion as well as the lack of overbuilding. >> sure. hassam, last we spoke a couple months ago you were talking about the difference between
growth on the coastlines of th u.s. and internal growth as well. are you still seeing a difference in demand? >> we are. and what's really interesting about the latest stages of this expansion is the broadening of it. you're right, the coastal markets have really kept a faster pace of job creation. they are the favored markets by institutional capital. so more capital tends to flow into those markets. but of late we have seen places like nashville, minneapolis, portland, oregon, that have posted a strong job number. >> we've got to go, hassam. that's it for today. we'll be back tomorrow. i'm lousea bojesen.
good morning. the fbi says newly discoffered e-mails doesn't change their probe into hillary clinton. and the dollar is rallying on the news from the fbi. and opec says its committed to cutting output. it's monday, november 7, 2016. and "worldwide exchange" begins right now. good morning. welcome to "worldwide exchange" on cnbc, on monday of election week. i'