tv Street Signs CNBC March 28, 2017 4:00am-5:01am EDT
good morning. we're happy that you're with us. we look christmassy today. >> we are. even though it's the end of march. 14 speeches by the fed, that's a lot. >> the tefrptatiinterpretations over the place. would argue trump, any infrastructure plan or tax plan is still more important for the dollar. >> definitely. at this stage i would totally agree. european equity markets hanging on to some slight bit of green out there. higher by less than a half percent for most of the european
markets. xetra dax bucking the trend to the upside. 1263 out of germany. seeing meager games across the board elsewhere. trump's setback on the healthcare reform leading to nervousness in yesterday's session, by in large seeing a bit of buying back into where we saw some selling yesterday. that goes for the sectors as well with most sectors out there in positive territory. media, basic resources and autos among the main gainers. >> let's get caught up on some corporate stories, starting off with builder supplier wolseley shooting to the top of the stoxx 600 after being largely by growth in the united states which made you the for toughing trading conditions in the uk and nordic countries. the company announced a 10% increase in its dividend to 36.6
cents per share. and there will be a ceo succession at the u.s. subsidiary with kevin murphy succeeding french roach. the u.s. operation will be known as ferguson. the company will continue to use the wolseley name in the uk and canada. shares in ericsson have fallen to the bottom of the stoxx 600 after the company updated the market on its restructuring process saying the costs related to the plan will be double the original forecast. the swedish group which issued a profit warning just six months ago, has unveiled a new organizational structure to implement the turnaround plan. ericsson has been hurt by increased competition and a lack of demand for wireless products in the shift to 5 g. >> two of tesco's share holds have gone public in opposition to the booker deal. schroders management and artisan say they believe 3.7 billion pounds is too expensive and
badly timed. they urged the ceo to aban don't tie up. this morning he said he is pleased with the overall response from investors. and british house builder redrow says it will not sweeten its offer for bovis homes. bovis homes has been the subject of takeover speculation since the co quit earlier this year in the wake of another profit warning. shares in dufrey are trading higher after the chinese conglomerate hna group are seeking to buy a stake in the retailer. hna already approached some dufry shareholders. the company is valued at 7$7.6 billion. michael pearson, former ceo of valeant pharmaceuticals is suing the drugmaker over unpaid stock rewards. he says he is owed $33 million.
valeant stock price fell to a seven-year low earlier this month after bill ackman sold the last of his stake in the struggling company. bill gross who was fired from pimco four decades after he found the investment firm settled his lawsuit with the company. pimco agreed to pay over $80 million to the legendary investor who pledged to give the money to charity. gross launched hits case in 2015 on the grounds that his dismissal constituted a breach of contract. $80 million s that enough? is that warranted? i know that all goes to charity, but it's a big chunk of money. >> it is. i'm thinking about everyone who has been writing in over the course of the past week with regards to market direction. we have a lot coming up on the show. we have a strategist coming up to talk about the ramifications of the deal not being pushed through in the states. get involved. get involved. we would love to hear from you. if you write longer, like some of us,
brokes coral. european equity markets are pulling lower as well or had been earlier. that was yesterday. >> that was yesterday. they are higher this morning. >> so the underperformance, why do you think that is? >> i can only deliver underlying growth. successful merger and cost synergies which probably stole my thunder, but we have been operating at a share price 4% above market the last few days. so i think we should be encouraged by the results that are out. >> the one-off loss is pretty large, the pre-tax loss, 204.3 million due to the one-off costs with this tie up. how would you describe the phasing of the tie-up? >> it's just a housekeeping of the merger. two platforms going into one. we are -- that's why we're delivering the increased synergy
view. that was to be expected. most analysts and shareholders are seeing that. a key thing is underlying growth rates which are incredibly strong as well last year for underlying trading. >> some petting compa betting c had a tough december because football and horse racing outcomes. has the start of the year been more company friendly? you have been exposed to cheltenham, is that better for you? >> yeah, we've had peaks and troughs with football results. that's our business. you look at the normalized margin over the year, we should be delivering that. the key thing is the underlying metrics, the net revenue, stakes across all of the group are up year on year, and are trading strong. >> there's a big change in your business model away from the shops, brick-and-mortar to online gaming and multi channnn sign up. talk to me about revenues and
multi channel approach. how is that? >> ladbrokes coral has over 40% of the uk, and retail provides a significant distribution network for multi channel. i would go as far as saying with regard to multi channel we are the most innovative. that means close to 1 million sign-ups for the digital business. so that our significant benefits of having an estate of that size. >> how is that translating through into revenues at your european retail business, how do you foresee the international business expansion? >> international is roughly 16% of the group, and in italy we have a multi channel model as well. we are seeing stakes up in italy for the first 12 weeks by 20%. and stakes up to close to 60%. that growth momentum is continuing. we are delighted by the international business
performance, and retail business in belgium is again growing above the market year on year. >> there are some who say that gambling can be too addictive for some people. and you have the government review looking at the fixed odds betting terminals as well if that comes back and is more negative than anticipated. how much of a hit would you take? >> i can't comment on speculation. there is six weeks until we hear. three things i want to say, the government called for evidence, if it's based on evidence it will demonstrate states do not encourage problem behavior. i can give you the numbers that justify that position. if we are talking about problem gambling in the uk, we should be looking at responsible behaviors. what ladbrokes coral has with 19,000 people screening callers we are very much focused on the real issue, responsible gambling. >> what kind of stake limit would you be comfortable with?
>> there's no evidence to state the stakes are going to change. if there is sincerely a call for evidence, there is no evidence to suggest a stake cut will solve problem gambling. >> before we let you go, what is the bigger risk to your business, brexit or regulation? >> it's regulation. i've been on record saying give our sector clear air so we can plan, budget and grow our businesses. that's still the case. if we can get clear air, that's what we'd like to see. >> jim, thank you very much for your time. jim mullen, ceo of ladbrokes coral. we need to check in on markets out of asia. pauline joins us with that. good morning. >> good morning to you. asian markets seeing to shrug off that anxiety overnight from wall street it was more risk on today. look at the nikkei 225 which
ended up more than 1%. a slightly weaker yen helped japanese exporters today. it's also ex-dividend day as we are closing in on the end of the financial year in japan which is march 31st. a lot of investors were snapping up shares of companies which wentdividend. also the kospi up 0.3%. boosted by q4 growth numbers. they were revised upwards, thanks to construction spending. samsung did very well today, up almost 0.7%. it had a surprise announcement where samsung said that it was planning to refurbish and resell 2.5 million of those note 7 tablets that was the center of the scandal at the end of last year. that announcement seems to overshadow the big unveiling for tomorrow of their galaxy s8 smartphone. but still samsung didn't miss a
beat ending up 0.7%. the shanghai composite ended down 0.4%. it struggled as liquidity concerns continued to come to the forefront. the pboc today did not inject short-term funding liquidity into the markets for the third session in a row. again, that plays into beijing's efforts to tighten monetary policy. increased worries among investors about liquidity there. the hang seng up 0.6%. and the asx 200 ended up 1.3%, a rise in oil prices during the asia session helped the resource sector there. louisa and caroline? >> there are no less than 14 speeches from members of the central reserve this week. so the nar sierative is coming k and fast. dallas president robert kaplan
s said he will support rate hikes but that increases should be gradual. and charles evans sees as many as four rate hikes in 2017 if inflation picks up, he said three increases was the most plausible. steve liesman will talk to federal reserve vice chairman in an exclusive interview at 7:30 p.m. cet. let's see how hawkish he will be. we should be prepared to move, that is the view of two german board members of the ecb who say the central bank needs to start planning an end to easing. they both said that a less expensive stance should be taken as soon as the data is stable. they said a sustained pickup in inflation is needed before a change in ecb policy. >> right now it is still premature because only to have an outlyer and then a temporary one and going back, for example, in the inflation ratio would be not a good idea then to move.
we should prepare for a change in the policy, and as soon as the data is stable and we have a sustainable path towards our objective of price stability, then we are well prepared to do. we are joined by steve maclow smith. let's linger on the ecb for a moment. comments from the ecb's chief economist saying it's way too early to talk about tightening and there seems to be a lot of hawkishness coming from the germans, which should be no surprise. do you think increasingly the language coming from the ecb is more muddled? >> yes. i think it's more nuanced. if we think about the last five years, it's been necessary to put in place extraordinary monetary policy in order to slow down. at the same time what the ecb has been trying to do is making sure the banking system is
adequately capitalized. that's now in place. but if we look at headline growth rates, still they're pedestrian. unemployment has come down, but it's nowhere near getting close to full employment. the point for central banks is they don't want to do anything that will jeopardize the continued european recovery. >> i guess they also don't want to do anything that would push the euro even higher as it is now. now we've seen it back above the 109 level. that is certainly bad for european exports. also from your point of view, for european equities. how bad is the strength in the euro for the picture that we're seeing in europe? >> stepping back one pace, the level of euro is not directly part of european central bank's manda mandate. they have a narrow focus on inflation. now on financial integrity as well given they're the top regulator in the banking system. i think they would think about the euro from the point of view that that has on overall inflation. at the moment tailwinds for inflation because of the pick up
in commodity prices. core prices have not moved, 0.9% for the eurozone. therefore you can infer from that that the recovery is not yet so embedded that it can accelerate from here. that's what the ecb are heading for. that's why they'll be precautionary in their approach. >> we not only have a ga zilen fed spe gazillion fed speakers, but theresa may triggering article 50. >> if we think about the uk and the european union, it's fair to say the uk has been a fairly reluctant member of the european union. particularly the uk stood against further european integration. i think that if you say now about the uk being outside those councils of state, it is possible that the move towards further integration would not be blocked by the uk. paradoxically at the same time,
a move towards integration looks like it has stalled because of a rise in populist votes in places like france, the netherlands and italy. but in the medium term further european integration is more possible. the uk has been a large recipient of european investment because it has a much less regulated environment for companies doing business than some european counterparts. the danger is if the uk loses access to the europe and single market, some of that foreign direct investment would get diverted into mainland europe. >> so far the real reaction is in the pound. that's the majority of the reaction. >> that's the pressure valve. >> precisely. >> do you think we'll see a scenario where we see a division between investing in the uk and investing in europe in terms of equity markets? >> depends on outcomes of any kind of trade negotiations that take place. we need to see the shape of the
trade agreement that the uk will be striking with the rest of the european union before we can make predictions about what foreign direct investment will do. from the point of view of sterling, we were look last year at the 10, 15-year outlook for markets and currencies. at the moment, sterling looks very oversold. at the moment, despite a negative scenario for negotiations, i think you'll see a lot of currency volatility which other financial markets, particularly equity markets will need to take in stride. the risk is if you get a more positive approach when negotiations start, sterling rallies from here. what about the other source of political risk in the form of german elections down the track this year. everyone is pretty positive about european equities now. you are -- looking at comments from morgan stanley yesterday, they're upping the earnings forecast for european equities, seeing the ftse 100 at 7,000 by
the end of the year. could the political risk throw us into turmoil this year? >> people are focused on political risk. if you look at the flows into european equity funds, what you're seeing at the moment is pmi well above 50 signaling prolonged expansion. yet flows into equities have failed to match the pmis, and the obvious catalyst is people are concerned about the elections taking place, which they find difficult to call. we take some comfort, i think, from the fact that opinion polls last year which people felt were wrong, are more right than they were given credit for. in the case of the uk referendum, the final polls before the referendum were for a narrow lead win, that's what we got. in the u.s. election, the final polls were for trump to lose the popular vote narrowly. that's what happened. if we roll that forward and look
at the dutch election, people were afraid there would be a hidden constituency, that didn't materialize. now we have the french election. people are afraid of hidden national front voters who come to the forein t in the second r, opinion polls don't suggest that at the moment. what is the playbook? do you stay with cyclicaling? cyclicals? >> there's every vine that inflation is just starting to broaden out. once we see core inflation starting to move, that would reinforce our sense that the european recovery has hit, and we should be more exposed to cyclical earnings. >> steven, thank you very much for that. the dow extended its losing streak to eight sessions, the longest for the index since
2011. market optimists are hoping strong first quarter earnings could send stocks trending in the other direction. >> reporter: the end of the first quarter is just around the corner. as washington moves on from healthcare to tax reform, the bulls are hoping a strong earnings season may provide a market stabilizer for what is likely to be a rocky debate over tax reform and infrastructure spending. first quarter earnings are expected to rise more than 10% from the same period last year. that's a lot. it's the best quarter i will showing in nearly six years, if we can pull it off. early signs indicate the earnings numbers may be better than expected. we had a few companies, 12, that have reported so far. they've reported average earnings gains of 12%. so what's the key to these rising numbers? first, the two biggest sectors in the s&p are technology and financials. they are both set to deliver earnings gains of 15% a piece. that's big numbers.
second is energy earnings. energy earnings have been declining for two years, they're now turning positive. what's the risk? it's still energy. big oil's ability to pull off big gains in 2017 it seems problematic with oil in the mid 40s since many earnings estimates for oil companies were developed with oil closer to $60 a barrel. but the average price for oil this quarter is $52. that may be enough to pull off expectations for at least this quarter. the bottom line, with an ugly fight over obamacare likely over for the moment, and the markets about to enter a seasonably weak couple of weeks prior to the april 18th tax deadlines, any good news on earnings will be welcomed by traders. i'm bob pisani, cnbc business news, new york. we need to take a short break. check out world markets live, our blog. you can find us on twitter, @carolincnbc or @louisabojesen.
ericsson shares sink after they say restructuring charges will be twice the original forecast. two of tesco's top shareholders urge the british supermarket to drop its booker deal, saying the 3.7 billion pound acquisition is too expensive and badly timed. shares in wolseley hit the top of the stoxx 600 after the building supplier reports a 25% rise in first half profit. with 14 speeches expected this week from members of the federal reserve, investors will be all ears when chair janet yellen takes the stage later today. cnbc has an exclusive interview with the federal reserve vice chairman stanley fischer at 7:30 p.m. cet. good morning. if you're just waking up in the u.s., quick look at u.s. futures. yesterday we saw indices down off the session lows. at some point the dow was off by 200 points, but managed to trim losses substantially. the dow jones seen up this
morning by 21 points. the s&p 500 up by 3, and the nasdaq up by 13. the dow is on an eight day slide after investors are jittery about the healthcare reforms and the tax policies from the trump administration. let's look at europe. a bit of a rebound when it comes to risk appetite. yesterday we saw a lot of weakness in basic resources. that has been reversed today. that's propping up the ftse 100, though only marginally higher to 14 points. we're seeing some very slight weakness in france to the tune of 2.5 points. in the fx markets, it is still all about dollar weakness in the aftermath of the collapse of the healthcare bill on capitol hill. what we're seeing is the dollar just slightly moving off the 4 4 1/2 month lows. that helped the euro go higher, which was about the 1.09 handle
yesterday. this morning off by 0.2%. cable ahead of the triggering of article 50 is changing hands at 1.2585. >> just looking at some of those levels that you were pointing out, the director of gtfx bank of america merrill merrilynch ih us this morning. is the dollar from the trump trade all gone? >> we had two thing going on. the recalibration of the fed expectation, the second part appears more challenging. the heart of the trump trade was the idea that the republican dominated house and senate could get along with the executive and pass policy smoothly. this is the first hurdle and one thing that united trump and the republican party and unfortunately at the moment there seems to be uncertainty as to the next iteration, the next
phase of this particular trade. >> i can't believe i'm saying this already, but the republicans face the midterm elections in november. surely they can't go to the midterm elections without having pushed through any type of measures at all. >> no, indeed. the market is squarely focused on the prospects for announcements on tax cuts, infrastructure build, we're expecting some kind of announcement for the summer recess. but the markets are in wait mode. and positioning is the game in town at moment. we've seen that by a squeeze in the yen, the euro and sterling as well. >> i mean, a lot of people say the reflation trade, where we've seen some jitters, shakiness over the last couple of days in the aftermath of the healthcare bill collapse was in place long before trump took power, trump tower, that was obvious. they say it's been in place since july or august. in that vein it should continue regardless of trump's policy. do you agree or disagree?
>> the growth back dropfavorabl. the fed is in a goldilocks scenario, not too tight, not too loose, but just right. we ultimately will see a fiscal stimulus package that may boost u.s. earnings and economic growth and the bottom line for the consumer. >> we said it numerous times during the show today. we have 14 speeches from the fed this week. do you even care about what fed speakers are saying or not saying? >> i think we should. given the history just before the march meeting where both williams and dudley in one day moved the market from a 30% expectation for march rate hike to near 80%, 90% expectation. there is the risk that the fed will want to give a signal. at the moment, the lack of clarity over fiscal policy is the key message from them. >> would that also mean the fed
will hold off on maybe hiking four times this year, three times as they signaled? >> that's the view from our u.s. economists. we're expecting two more rate hikes to make it three this year. three into 2018, with the potential of another rate hike pencilled in. lack of clarity on fiscal policy will be the key restrainer for the fed. >> what is your dream position at the moment? >> i would like to be short sterling. i think the narrative here that article 50 removes the uncertainty once it is triggered is a false one. ultimately we're waiting for the response from the eu. and as soon as article 50 is triggered, the clock stops trigging. that can't be good for the currency with a current account deficit. we're waiting for the financing of that. ultimately the divisions between the eu and uk are apparent and will come into starker focus the next couple of days or so. >> your predictions for levels are?
i've seen under 120 in cable. >> we have a forecast of 115 for cable in the first half. >> does that mean once theresa may triggers article 350, that' not priced into the market? >> what is interesting will be the response from dan naonald t and the eu. the size of the divorce bill and the fact on whether the uk responds amicably or not. >> thank you for that. donald trump's son-in-law, jared kushner agreed to testify before a u.s. senate committee investigating suspected russian interference in the election. kushner, a senior adviser to the president, met with russia's u.s. ambassador back in december, while executives of russian state development bank veb said yesterday that it held talks with kushner during a bank
road show last year. veb was placed on the u.s. sanctions list following the annexization of crimea. questions surfaced about the source of the intelligence trump seized on last week as vindication of his wiretap claims. hallie jackson has more in this report. >> reporter: tonight, a new plot twist in the surveillance saga consuming congress and the white house. >> if this was a movie, you would turn it off because you wouldn't believe it's believable. >> reporter: the latest bombshell coming from devin nunes, the republican head of the house intelligence committee who first revealed that u.s. spies may have swept up communications involving the trump transition team. it's called incidental collection, and while nunes said there is no evidence to back the president's claim trump tower was wiretapped by president obama, president trump said he felt vindicated anyway. >> i somewhat do, i must tell you i somewhat do. i very much appreciated the fact that they found what they found. >> reporter: turns out, one day
before he briefed the president, nunes was on white house grounds reviewing the secret information from the secret source. >> the congress has not been given this information, these documents. there is no way for the folks that i have been working with to actually to bring this forward to light. there was no way i could view that because they couldn't get it to the house intelligence committee. >> reporter: nunes looked at those reports not in the west wing but in a building in a secure room a few hundred feet away. >> you can't walk on the white house grounds, under the cover of darkness, go into a secret room and log on to a computer, unless somebody on the white house staff allows you to do that. >> reporter: nunes says his source is not a wlous stahite h staffer but a member of the intelligence community. the administration season the worried about any inappropriate leak, despite for weeks railing about other leaks.
why is this leak okay but others are not? >> i think there is a difference between a leak and someone pursuing a review of a situation, someone who is clear to share classified information with somebody else cleared is not a leak. >> reporter: but democrats are concerned about the coincidental timing with more questions on whether nunes can really be impartial, as he leads one of the congressional investigations into russia's interference with the election. >> chairman nunes is falling down on the job, and seems to be more interested in protecting the president than seeking the truth. representative adam schiff, the top democrat on the house intelligence committee called on devin nunes to pull back from further development in the russian investigation. he said there is no legitimate justification for nunes bringing the investigation to the white house instead of the committee. trump's so-called energy independence order will review the clean power plan which
sought to reduce carbon emissions. the white house says the order will create jobs and boost domestic energy production. now, tesla and spacex founder elon musk is launching a new company called neuralink, which will specialize to electrodes connected to the brain which may lead to the uploading and downloading of thoughts this is quite eerie, actually. the story was reported by the "wall street journal" and musk tweeted he will release details next week. tech and the trump administration are at odds on a number of issues from trade to immigration, but there's another hot button issue dividing the two sides, the impact of artificial intelligence on the labor market. >> reporter: steve mnuchin was asked about the effect that ai and automation will have on the u.s. labor force and his answer surprised a lot of people.
>> technology has made the american worker more productive. as far as technology taking over jobs, that's not on my radar screen. >> reporter: many were shocked by the treasury secretary's response. billionaire entrepreneur mark cuban was uncharacteristically speechless, saying simply "wow." and the former u.s. chief data scientist, dj patil said we need to get ready now for the impact of ai and automation. they say mnuchin is wrong and that the labor market is feeling the impact of these technologies, a trend he says will only accelerate. >> we will see an incredible acceleration of data being used through everything we do in society.
whether that's healthcare and you may have a traditional x-ray done, you may have a radiologist that looks at it, but the heavy lifting before, where they're studying it, will be highlighted for interesting developments or something seen on the film will be done by a computer. it will aid the person. >> reporter: nearly 40% of jobs in the u.s. are at high risk of automation over the next 15 years, according to a new report by pwc, that's more than germany, the uk or japan. john hawksworth, pwc's chief economist tells cnbc that's because the u.s. is dominated by services jobs, many of which could be automatible. in financial services, he says many bank jobs that tellers do could be moved online. pwc also notes that new technologies like ai and robotics will create new jobs in
the digital economy. there's one group of people betting that mnuchin is wrong in his forecast. venture capitalists. peter abare of lux capital said his firm donated $125 million over the last four years to start-ups targeting robotics and autonomous systems. abare is putting money to work because he says this will be one of the most significant transformative trends for the modern american labor force. josh lipton, cnbc business news, san francisco. arjen joins us in the studios to talk about tech. there are two stories here. one is the job losses because of ai and the other is neuralink. in terms of the job losses to ai, according to ba research, only 13% of manufacturing losses are due to trade.
mnuchin's comments are shocking. >> absolutely. they are at odds with the tech industry who warn this is a big deal this will impact onjjobs. and musk and this neuralink story are saying the only way people can survive is if people merge with machines, that's what neuralink is about. >> mnuchin said we are 50 to 100 years away. feels like we're one, two, maybe a decade away. he seems completely off. >> it's happening now. this is the point. if you look at the development of driverless cars, jeff weiner of linkedin, his tweet showing amazon drone deliveries, this is all automation, not sci-fi. this is happening now. this is the point, there's a lot of business leaders, a lot of politics who have not quite come to terms with how far the development is happening. in davos i heard someone from
google speaking about how surprised he was, a google founder talking about how surprised he was at the development of ai. it's come at such a pace it has even shocked people in the industry. >> let's explain what neuralink is it's a brain computer interface they're looking at doing. we already do it. we think it's far out that our brain is manipulated by electrodes or something technological, but we do it for everything from obesity to parkinson's, epilepsy. the list goes on. >> that's the medical application what about downloading thoughts? manipulating thoughts? that's something i'm worried about. >> or having your body work with technology. >> if you look at what musk's reasoning has been over the past few months, he says humans can only process a couple megabytes of information. with a computer, it's trillions and trillions of megabytes.
this is the point, we can't compete with machines when it comes to processing data, and so much relies on the processing of data, we can't compete. that's where humans become irrelevant. this is musk's thinking behind this. he said he will announce more plans next week. that's precisely the kind of reasoning he will give behind neuralink and this business. >> it's fascinating to think how things could develop, in 50 years, it could be a different world. i'm fascinated by it. also according to this research, the number one types of jobs that are heart ard to replace b artificial intelligence are the creative ones, more movement ones, it's harder to mirror lifting a plate and wiping under the plate, than it is coming up with hugely complex algorithms on how to win in chess.
>> that's why we see a lot of jobs going are in those data processing roles. perhaps in law firms where people are inputting things around cases. any of those jobs where it does not require a lot of movement but data processing, that's where the initial wave of ai will come in and sweep. >> come on, we're never going to be replaced by robots, right? >> we're fine. >> unless they take over. >> i don't know. >> we have to be on our toes. >> the conversation continues. cnbc will bring you an interview with twitter ceo jack dorsey at 12:00 cet. toshiba is expected to move forward with the plan to have westinghouse electric to file for chapter 11 as early as tuesday. >> westinghouse has accumulated massive losses due to delays in two nuclear power plants in the
u.s. plunging toshiba into financial crisis. by having westinghouse file for bankruptcy protection, toshiba can move westinghouse off its books and improve its own situation. if the decision is reached at the next board meeting, the bankruptcy filing could come as early as tuesday in the u.s., but it will come at a hefty price for toshiba which will have to guarantee westinghouse's debt which amounts to more than $7 billion. talks are ongoing with the nuclear plants to have construction continue while the unit is under bankruptcy protection but it will likely be delayed and may force toshiba to have breach of contract penalties and future losses which could drive the amount up to more than $9 billion. westinghouse needs help for its overhaul and has asked korea
electric power group, a major player in south korea to sponsor the recovery. but specifics are yet to be discussed and other sponsors may come forward this bankruptcy filing will be a first step towards toshiba's recovery but it's far from being out of the woods. toshiba finished half a percentage point lower today. that's all from the nikkei. back to you. still coming up on "street signs," it's the final countdown with the triggering of article 50 a day away. we'll look ahead to the biggest challenges. stick around.
sturgeon expressed the point that their voices are not being heard in parliament. i can't decide which of the negotiations or discussions will be more difficult for theresa may, those with scotland or the eu what do you think? >> i'm sure nicola sturnlggeon l be a tough negotiating partner. the problem is time. article 50 was an afterthought of the lisbon treaty. it was designed to nobody would ever trigger it. two years, which is the time frame set out under article 50 is not enough time for the uk to renegotiate a comprehensive new relationship with the european union which is what the government's strategy is. >> what time frame do you think is more realistic?
five years? four? >> the key to brexit is a transitional deal. a period that extends the time you have to conduct negotiations. it took greenland, a small country neither arctic circle, three years to renegotiate its exit from the european community in the 1970s. most of those talks were on fishi fishing. there is no chance the uk will get a new free trade deal by the end of the article 50 so it needs to extend the time period. the problem is the politics of getting a chance single deal will be very, very tricky. under a transitional deal, the uk's relationship with the eu will be similar to what it is today. politically you mentioned the politics, you mentioned sturgeon, but theresa may's main problem are the mps in her own party that want a clean break from the eu, don't want a lengthy transitional period. she will have to get them on board in order to get that
transitional period. >> how long did you say it took greenland? >> about three years. >> it took switzerland nine years. >> the average time to negotiate a free trade deal globally is 28 months. the real negotiations may not get started until after the german election, and the new german government is in place which is towards the end of the year. this is a very, very short time period. that's why we're concerned, the main risk really is the uk runs out of time. if it drops out of the eu, in march of 2019 without a transitional deal, this will be very damaging. >> oliver, interesting report. speaking of out of time, that's what we are. thank you very much, oliver harvey from deutsche bank. good-bye from me. >> i'm carolin roth. "worldwide exchange" is up next. your numbers go up, despite your best efforts. but what if you could turn things around? what if you could love your numbers? discover once-daily invokana®. it's the #1 prescribed
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