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tv   Street Signs  CNBC  June 12, 2017 4:00am-5:01am EDT

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welcome to "street signs." i'm carolin roth. these are your headlines. the f.a.n.g.s lose their bite. the stateside tech selloff hurts stocks in europe with the continents largest chipmakers seeing red at the open after goldman sachs turned cautious on the sector. the finance minister of qatar tells cnbc in an exclusive interview his country will not be the sole loser in the rift with other arab powers, as he assures the economy will survive the gulf rift. >> qatar is a very strong economy and a big economy. i think if we're going to lose a
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dollar, they'll lose a dollar. the uk prime minister scrambles to reunite the conservatives after the election shock. the ftse opens in the red. but one of britain's biggest privatite equity names says it could be a buying opportunity. >> hold back a little bit, but at some point step up and buy. emanuel macron looks to win a majority sending the bond to a seven-month low. what a weekend that was. theresa may said the government is focussed on delivering a successful brexit as she resufallresufal reshuffled her cabinet. michael gove returned to the bench as environmental secretary, and there are mixed signals on whether she will
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adopt a softer stance on brexit. this as discussions continue with the dup over a deal to support her minority government. steve, talk to us about some of the biggest stuff happening over the weekend. where does theresa may stand now? >> i think theresa may clearly is a weakened prime minister. the most insulting thing you can say in many ways is she's a caretaker prime minister now. i've seen that term bandied around. the last thing the conservatives need at a moment, given the fact they're reeling from having underperformed, the last thing they need is either, a, another general election or another leadership challenge. that's why you have the likes of boris johnson who has been talked about as a potential new leader of the conservative party, he being a brexiteer
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initially, saying that's the last thing you need at the moment. you have gove going into the meeting, after having stabbed boris johnson in the back and ending his hopes for prime minister. you have promotion for littington, promotion for green who are both remainders and key allies of theresa may. i think she's rounding the wagons, keeping as many people close to her, both enemies and allies. she does not have the smorgasbord of choice she hoped she would have had. in terms of all the tories, they're not all backing here. there's a chap involved in the evening newspaper, that being the former chancellor, charles osbourne. he sthinks mrs. may is in a
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terrible position. >> she's dead woman walking. >> what's your guess? >> i think we'll know shortly. >> that went down with the tories with the daily telegraph showing up on jeremy corbyn's doorstep. some are annoyed with the fact that mrs. may was strong and stable and transparent in the election campaign, unlike mr. corbin wkoescorbyn who had a ved campaign. the tories are still short of a majority. and they are rooting around looking for something. there was confusion over the weekend on whether they actually had a deal in place with the dup, the hard-lined unionists.
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b the defense secretary, again, rallying around, just explaining what kind of relationship the tories are looking for with the dup. let's listen in. >> not in government with the dup, we're not in coalition with the dup. they will support us, as i said, on the crucial economic and security issues that face this country. we do not agree and we do not have to agree with any of their views on these social issues. and i certainly don't. >> what next? it is a frenetic week. the next week is very important for the government and for the conservatives. it's a week where mr. corbyn and his allies will be trying to pounce and find weaknesses. over the next 24 hours, the prime minister will have to face first cabinet today and tomorrow. she'll have to face a 1922 committee later on, the back bench tory mps and try to reassure them, despite some of the key allies lost their seats in kensington and eastborn, that
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she is the right woman to take them forward. later in the week, we hear the mansion house speeches of mr. hammond, who thought he would lose it if may got an overwhelming mandate, he will make his speech and mr. carney as well, important in the brexit vote last year. then you have monday. monday the 19th. absolutely massive day. i will tell you why. one, you have the queen's speech. the queen's speech? who listens to that. listen to it. you want to see how much of the may/tory manifesto has been shredded and has even made it to the government plan for parliament and you have the small matter of the brexit negotiations starting. if you're confused on this side of the channel, can you imagine how they feel about it in brussels? i feel so sorry for some because
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they have no idea where the brits are coming from. >> steve, thank you very much for that. joining us is lord francis mode, steve raced a lot of interesting points. mr. osborne said theresa may is a dead woman walking. can she survive this week politically? >> she can survive the week and some months, but i don't think a single person believes s s that will lead the conservatives into the next election. at some stage she will resign and be replaced. >> is she a queen of denial? why do you think she's holding on to this illusion of the tories being a great party? her personality showing leadership? >> look at the result. we did get a very big share of the vote. the biggest share any party has
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had of the vote certainly a bigger share of the vote than tony blair ever had. it is simply that jeremy corbyn did enormously better than anyone had expected. and the -- our campaign alienated many of our own voters. it was not a good campaign. no one believes that. the manifesto was not well thought through. and made life very difficult for our candidates on the ground. and because the polls were consistently suggesting that we would get a big majority. people felt secure for voting for jeremy corbyn who seemed much more reassuring that's his background and views would suggest. the result is the conservatives under theresa may got a good vote and a good number of seats, but not enough and nowhere near what was expected. given this was an election she didn't have to have and ended up with us in worse position than
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when we started that means her position as leader can't be secured. >> is the reason why she's still prime minister today the reason why she didn't step down on friday morning, is it because there's simply no alternative in the tory party? is it because amber rudd is not quite ready yet to become prime minister? >> numerous people would be capable of being leader and prime minister. that's not the point. the point is that the requirements of the country require that there are some things, as your correspondent was saying that have to be done and done quickly. the queen's speech needs to be done. there needs to be a basis of operating with dup support. that's not that necessarily that hard to do. but it has to be done. the brexit negotiations have to start. for those who say, well, of course no one knows what the plan is for brexit, no one has known at all what the outcome will be. and these phrases, hard brexit, soft brexit are unhelpful
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because they mrasinask a lot of nuance and uncertainty. no one says we want there to be no connection with the european union at all. everyone wants us to maximize the engagement with the single market so that we have as open and complete a trading relationship what this does for sure is add uncertainty into it, which means businesses who need to get stuck into this need good advice, they need to have the -- to get as close as possible to what is going on and be able to influence both the british government here and the european union institutions, but also the major member state governments, because it's in the interest of business to have as open a trading relationship as we can. this is much easier to do than it would be with the canadian free trade agreement. but of course that started with nothing. we start our relationship with the european union with a
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completely open trading relationship because we are in the single market. so the changes would have to involve erecting barriers that don't currently exist rather than negotiating away barriers that have been there for a long time. >> i know you don't like the term soft and hard brexit, i have to come back to it for lack of a better term. damian green is the second most important person in uk politics after theresa may. he's very much pro european. does that tell us that brexit will be somewhat softer? >> i think there are a lot of options here. britain has quite a dgood hand o play in this. we do have assets in terms of security and intelligence that are valuable to our partners in europe. and where maximum collaboration is in everybody's interest. there are all the discussions to take place about financial contributions to the european
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union. and no one has ever said that there can be no contributions. yes, there has to be control over immigration as a result of this. there has to be a change to the commitment of the free movement of people. does that have to be absolute? no, i don't think it does. you could have an arrangement with preferential terms for eu citizens. so there's a lot of scope for doing things. of course the arrangements with the support of the dup means that an absolute for most of us which would have been an essential element is that there can be no hard border between northern ireland and the republic of ireland. there's got to be pragmatic relationships and arrangements about how customs work and how trade works so that we don't actually build into the trading arrangement the kind of friction which the single market, which i was involved in negotiating 30 years ago, what we've painfully
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negotiated away doesn't get put back into place. >> if uk voters were to go to the pools now, jeremy corbyn would be elected prime minister. do you think there's a possibility of election happening and mr. corbyn taking the premiere? >> that's what one poll over the weekend said. one thing we should take away from this. don't believe what you see in the polls. because while there's absolutely the case that there were a couple of pollsters which ended up being correct, many more were not. and, you know, it's like a stopped clock. it's bound to be right twice a day but you don't know when. >> lord francis maude, thank you very much for your time. former shadow chancellor. just want to bring you the latest comments coming from the rating agency moody's when it comes to the uk election. the inconclusive uk election
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outcome will complicate and probably delay brexit negotiations. it says it expects fiscal risk to increase because budget consolidation will have a lower priority. this is credit negative and says the uk election outcome means the government may now consider softer brexit options which could be credit positive. a mixed view from moody's. overall still plenty of uncertainty when it comes to what this means for brexit and for the credit rating. we're going to go for a quick break. sh, sessions on th stand. jeff sessions gets set to testify in front of the senate intelligence committee. we bring you the details after this short break.
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the stoxx 600 is off by 0.6%. and we are even seeing that the ftse 100 is down despite the fact that we saw such a big slide in the pound sterling especially on friday and holding steady today. want to show you what's happening when it comes to the european tech stocks. we are seeing downward pressure there. dialog semiconductor off b by 3.9%. and austria microsystems off by 7.6% as samsung, taiwan semiconductor and sharp suffered losses. why is this happening? because of that big decline in tech stocks and some big f.a.n.g. stocks in wall street on friday. we saw the worst drop in apple shares in 14 months. plenty of profit taking after we saw that spectacular run to the upside. this is also because a number of
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large investment banks turned negative on tech. goldman sachs said it is cautious on some big tech names. ubs expects short-term headwinds for the shares given the haven't outperformance and mizumo said any good news is already priced in. jeff sessions is scheduled to become the highest ranking government official to testify in the senate intelligence xhet i committee's investigation into trump's campaign and russia. jennifer johnson has more from washington. >> reporter: president trump again attacking his former fbi director, tweeting i believe the james comey leaks will be more prevalent than anyone thought possible. totally illegal and very cowardly.
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>> the former fbi director was the source of a leak. >> reporter: republicans say they are growing weary of this he said he said spat. >> you may be the first president in history to go down because you can't stop inappropriately talking about an investigation that if you just were quiet would clear you. >> reporter: the russia election investigation is back in the spotlight tuesday as attorney general jeff sessions testifies before the senate intelligence committee. sessions recused himself from the probe in march after it was revealed he had two meetings with the russian ambassador during the 2016 campaign, something he earlier denied. >> >> there are some questions about sessions that have to be asked. first, did he interfere with the russia investigation before he recused himself. >> reporter: sessions was supposed to testify before the house and appropriations subcommittees this week but wanted to go before the
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intelligence committee to respond to comey's testimony. democrats wanted sessions to testify under oath and it's not known if that hearing will be public or behind closed doors. french president emanuel macron's party is set to win a sweeping majority in the country's parliament after the first round of elections over the weekend. his awlilliance could take up te quarters of the house after the second round of voting next weekend. there was record low voter turnout, but the prime minister hailed the result on french tv saying "france is back." candidates for the five-star movement in italy are likely to fail to make the final round of mayoral elections in most major cities. exit polls from local votes suggest the party may not perform as well as hoped in national election qus which wou
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have to be held before may of 2018. all right. let's get back to our uk election coverage. this time talking about how this impacts different asset classes. the pound sterling, still under a bit of pressure today. cable at 1.27. i don't know if we can get the rest of the print there. off by 0.7%. 1.2728 is the exact print. we did see it drop to lows of 1 t 1.2632. jeffrey yu from ubs wealth management just joined me around the desk. always good to talk to you. let's go back to your old stomping grounds, fx. how much lower can cable fall? >> it depends on what
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materializes over the next few days. if the current government becomes clear they can't command con if confidence there could be pressure on sterling further, but i think we should look to the move towards 1.30, 1.35, 1.36 if we get to low levels, the valuation argument, it's cheap. >> so you're not selling on rallies, you're buying on dips? >> i would look at asymmetry and buy on dips. >> you're not the only one more positive on pound sterling at this point. some people say that the probability of softer brexit, that has just unfolded itself, revealed itself through the negotiations potentially. that could be a cushion for the currency. is that your main reason? >> i won't dispute that. at the same time i think it's a dangerous route to go down the soft brexit hard brexit "50
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shades of grey" angle. i'll go back to two arguments. once we get back to below 1.25, the valuation argument comes through. sterling is cheap outright, and it's a good level to buy. at the same time are we really that changed in terms of scenarios? no. i don't want to say too much risk premium needs to be priced in. let's see where the fed comes through. >> usually we have got this very reliable inverse relationship between the weaker currency and the stronger equity markets. that's not holding today. it did hold thursday and friday. do you think that relationship can break because there's so much uncertainty around the state of the uk economy? >> i think that is a risk. the breaking element, we're looking more at a nontory government over the medium to longer term if there are concerns over corporate taxation coming in and it becomes a
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divestment story, people pulling money out of the uk. that's where the relationship will break down. but we're frar thar from that y. manifestoes with both parties n unable to command massive majorities. >> the ftse 250, that saw big falls on friday. the ftse 100 up by roughly 1% precisely because of the 75% of the ftse being dollar earners, the ftse 250 just a better reelection of the domestic economy. so you want go with the ftse 100 if you were to invest in equity markets? >> that's where you want to get your bang for the buck to the earnings translation. on the 250 side, it's just high too domestic sentiment. the uk economy has been softening for a while. household sentiment, business sentiment are crucial. if businesses believe in a soft
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brexit, let's see. >> talking about the bond markets. gilts, will they be a safe haven? or do people stop buying paper? >> banks will be looking to hit the buy button now. >> jeffrey yu, thank you very much. we will go for a quick break. check out world markets live, our blog which runs throughout the european trading day. we'll be back in two.
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hello. welcome back to "street signs." i'm carolin roth. these are your headlines. the f.a.n.g.s lose their bite. the state side selloff hurt stocks in europe with the continent's largest chipmaker seeing red at the open after goldman sachs turned cautious on the session. the finance minister of qatar tell s cnbc that his country wil not be the sole loser with the rift with powers as he says his economy will survive the gulf rift. >> qatar is a strong economy and it's a big economy. i think if we lose a dollar, they will lose a dollar. >> the uk prime minister scrambled to reunite the conservatives after the election shock. the ftse opens in the red, but one of britain's biggest
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privatiprivate i equity names says it could be a buying opportunity. >> from an investment opportunity, hold back a little bit but at some point step in and buy. french president emanuel macron looks set to win a significant parliamentary majority sending the yield to a seven month low. all right. good morning. if you're just tuning in let's show you what european markets are up to this monday morning. slightly on the back foot. the ftse 100 is down by a third of a percent. 7,500 points at this point. the dax is off by a half of a percent. cac 40 in paris off by 0.32% despite a successful first round of parliamentary elections for emanuel macron. pound sterling under pressure when it comes to the u.s.
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dollar. 1.2728. that follows the 1.7% drop on friday on the back of the news that we got a hung parliament, that was the biggest intraday drop in eight months. euro dl/dollar at 1.1218. the finance minister of qatar told cnbc his country will not be the only loser in the fight with the arab powers that blockaded its economy. three of qatar's neighbors, saudi arabia, the uae and bahrain said they would open hotlines for qataris who have been cut off from relatives. hadley joins us from doha. this rift has been going on for a number of days now. there's no signs of it ending. >> absolutely right. what we've seen in the last week is a downgrade by s&p and pressure on the currency, over 1 $1 billion wiped off the stock market as well. we have also seen 59 individuals and organizations laned as
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terrorists. the criminalizing of signs of sympathy to qatar by the uae in particular. so a lot of questions about what will happen next. this does have economic implications. i caught up with qatar's finance minister in an exclusive interview. let's listen in. >> for us, this is a big economy. we are very much well diversified economy. we are our -- if you look at our energy sector and where we stand on this, that also has been -- things are business as usual, so it's moving very well. if you look at where we stand in securities and with things happening inside the country, i think you're now in doha, you have been here a few days, you told me that you will spend another three, four days here, i'm more than happy to take another interview after two,
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three days, whilst you see the ste, lo city, go to the banks, grocery stores, malls, we are business as usual and open for business. we might have one or two challenges, but this country is very resilient. we have the assets and the security that we need. our foreign assets and foreign investment is more than 250% of our gdp. we are very much comfortable. we know we can defend the currency or the economy. i don't think there's anything that we need to worry about in the local economy. >> so no chance of a selldown in assets like barclays or vws? >> i think we're extremely comfortable with our positions, investment and lick kquidity in systems. >> so in worries about the reserves and how quickly those may be drained? >> if you look at the last week, there was some reaction in the
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market which is understandable. if you take any action or any magnitude like this in any of the countries, that's normal. we've seen good rebounds coming back. other issues, especially the foods or the banking systems or doing business here, things are becoming up to very much normal activities. let's talk bonds. we've seen bond yields jumping sharply. in plan to step into the market there and buy bonds? >> i don't think we need to do anything like this. this is a lot to do with some nervousness in markets to what's happening in the region. i think if we look at where we stand on the rating agencies, we are still double aa countries and one of the top 20 or 25 globally in ratings. i think we are very much better than a lot of people around us. >> i want to add that it's difficult to assess at this
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point how much of an impact this will have on the private sector and private sector sentiment going forward. when i asked the question of the finance minister he said when we lose a dollar, everybody loses a dollar. so this does have implications but no worries yet in terms of the economic growth as a whole or what's happening in the economy now. he said there are no food shortages and it's business as usual. >> can i bring in the u.s. angle here? we heard from rex tillerson, he's urging for calm in this conflict. at some point he wanted to mediate between the different gkc countg gcc countries, and then donald trump accused the qataris of promoting terrorism. how much of a wrist arift are wg between the number one in the u.s. and his secretary of state? >> it's almost a mirror image of what we saw over the last eight years with president obama and secretary of state or then
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secretary of state john kerry. at the end of the day, what you have are mixed messages coming from the white house with regards to policy in the gulf arab states. the question going forward is how damaging this will be. we saw eight years under president obama this was a problem for the gulf arab states, they didn't know where the u.s. stood. now they seem to know more about where the u.s. stands, it seems to be emboldening some gulf arab countries in terms of taking on iran. so it is a question of whether or not the united states will become much more of a force for policy in this region and whether this opens the door to other players including russia. >> hadley, thank you very much for that. let's stay in the region. let's look at oil prices. they're some what higher. that's benefiting the energy sector across europe. brent crude at 48.45. wti crude up to 46.05. this is as we're seeing a large build up in long positions in oil. the physical oil markets still
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remain bloated. we saw the baker hughes numbers that showed new drilling occurred for a record 21 weeks. the saudi energy minister has weighed in on the dispute in qatar as well. he told cnbc over the weekend it's up to the qatari government to find a solution. he also addressed last month's deal between opec and non-opec producers to cut oil production. we asked if he thinks the deal needs to be reviewed. >> it's too soon. when we made that decision to extend, it wasn't arbitrary. it was based on information on supply, demand,en in of that ns changed. weekly data goes up and down. sentiments in the financial market swing like a pendulum. but that doesn't change the fundamentals. what we can influence as oil producers is the fundamentals.
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the level of supply, which would result in drawing down inventories. once inventories draw down, as they have been by the way over the last few months, the sentimental issues that fluctuate from week to week will be overwhelmed by those fundamentals. i'm confident that the strategy is working. we've seen oecd inventories draw down by 80 million barrels a day. we've seen floating storage, like a cloud over the industry, you know, over 50% of that has already been liquidated into the global markets. we're seeing high refinery utilization rates very high utilization rates in the u.s. that is going to pull oil down. we've seen the u.s. market pull oil from around the world which resulted last week in higher
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inventory but also created shortages elsewhere. i think we have to give it time. having said everything i said, that doesn't take away from the flexibility that we've indicated we will have. we have to give it time. in a few months time, in the fourth quarter, we will look at things. we have a meeting late november for opec and then a meeting with our participating nonoil producers. if we find for any reason that we need to adjust the strategy that we set in place, we will be willing to do that. >> there's a number of influences on the oil price, one of them at the moment is what's happening with qatar, the dispute with qatar. how quickly do you think you will be able to resolve that situation? >> we hope we can resolve it quickly. it's not in our hands. it's within the control of the qatari governments. i think neighbor's of qatar, not
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only in the gcc but elsewhere in the arab world and elsewhere in the global community made it clear what those conditions are. they're not in my area of focus as an energy minister. we hope that qatar will accept those conditions and will join its brotherly neighbors within the gcc and arab community. in the meantime, within the energy markets, there is no change. qatar is a member of the opec organization and is a signatory to the 24-country agreement that has just been extended. we trust they will abide, but the overall contribution in terms of cuts is rather insignificant in terms of the scheme of things. i don't see that as an issue. >> coming up, getting on with
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running the country said brexit minister david davis. we talk moves in the brexit negotiations live in brussels after the short break. icrophone) listen up, heart disease. you too, unnecessary er visits. and hey, unmanaged depression, don't get too comfortable. we're talking to you, cost inefficiencies and data without insights. and fragmented care- stop getting in the way of patient recovery and pay attention. every single one of you is on our list. for those who won't rest until the world is healthier, neither will we. optum. how well gets done.
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britain's brexit minister david davis is hitting back at conservative critics of prime minister theresa may he says former chancellor george osborne was wrong to call may a dead woman walking he says their job is to get on with the running of the country. let's get out to willem from brussels first order of business, strike that deal with the dup >> that is right david davis in his brexit department back in london will be focusing on negotiations that start here in a week his counterparts have been formally notified that those negotiations will begin as expected next monday
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he's said that because the eu continues to insist that control of immigration is not compatible with single market market shshi uk will no longer remain part of the single market, however som michael fallon said he down played the fact that the result could impact that too much but it impacts the single market so watch this space whether there is a softening of brexit the commissioner for economic and financial affairs in brussels said we should not confuse the results with a new brexit referendum. that's already done. he did say it changes the force of the negotiations to be sure the push for a hard brexit is weakened but all is less clear. jean-claude juncker, the head of the european commissioner says
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he wants to get on with negotiations full stop let's see what he said over the weekend. >> all the elections are important. not only in so-called big member states, but the one yesterday was of a particular importance i do strongly hope britain will stay ready to open negotiations. as far as the commission is concerned, we can open negotiations tomorrow morning at 9:30 so we are waiting for visitor s coming from london i hope we will not experience further delay in the conclusion of these negotiations. first we have to agree on the divorce and commit modalities and then envision the architecture of the relations. i hope the result of the elections will have no major impact on the negotiations we are desperately waiting for
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them >> jean-claude juncker says it is wait and see for the next week when the negotiations start. essentially it's business as usual in brussels. he and donald tusk and the eu head of foreign affairs meeting with the prime minister of macedonia, another troubled region of the european continent. it's the balkans, not just the irish border we have to worry about. >> how does the dup coming in with ten mps complicate the brexit talks they want that open border between northern ireland and the republic of ireland. >> it puts a bit of a spin in the works. it takes that option of negotiations off the table for theresa may's conservatives. the dup have been in favor of brexit, but they're much more worried about staying part of the customs union for trade and also to avoid the hardening of that border. very, very difficult for theresa may to navigate through the
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shifting concerns on both sides. that's something she will have to try to do starting next monday >> willem, the clock is ticking. thank you very much for that earlier steve sedgwick asked an influential investor if he was changing his strategy given the election result. >> uk generally will become very cheap. from an investment point of view, hold back a bit, but at some point step in and buy >> you're talking about britain in the '70s, all the instability there. bins not being collected raging pacts, that's comparison to the '70s >> there are a lot of similarities in '74, you had a coalition government that didn't last long, you had a second election which labour won he got that message of hope
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across as opposed to may who focused on detail and knit picking. the public rejected that unfortunately she may well ribet right about the money tree you look at macron in france socialist country with a very, very right-wing agenda firing 120,000 civil servants 60 billion of cuts yet he's had a landslide victory. it shows what people want is something to believe in. >> do you think we are going to get cohesive government in the united kingdom given the fact that no one party will be able to really get a big majority even if we had another election? will we stumble on does that mean brexit negotiations in your view could be quite painful for the financial community? >> i think the italians summed it up by saying they think britain has become ungovernorible i they we are in a situation
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where the divide between right and left, between young and old, between in europe or out of europe is incredibly strong. passionately felt by people. at the moment this government, i don't think, will be in position to bring the country together. i don't think corbin is in position to bring the country together you're right we will stumble along and the europeans have all the hands with the negotiations. >> you have large exposure across the united king dom, care f for the elderly, lack of garden centers, in terms of the opportunity for you now, are you concerned about what happens with social care and the elderly and the cost to the elderly or how you negotiate this or not? >> i'm very concerned. there's a need for the political parties to -- for a period of time i think the election will punish them if they don't to put the differences aside and actually
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work out how do we get through the next p 3 to 4 years if we don't. if politicians continue to focus on their own desire to have power and keep power, the country will go for a very, very bad time indeed. >> international funds failed to translate record growth and assets under management entire profits with global profits falling nearly 3% despite assets under management rising by 3%. this according to research from mckenzie the report warns the rise of low cost passive funds could threaten the industry across europe and asia. gemma is in berlin i would argue it already threatened it big time >> yes we're looking at the fund more broadly, looking at the theme of digital digital digital. it's all over the agenda, the and the use of digital to attack the big threats. we are looking at artificial intelligence as a theme that's popular. when we break down artificial
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intelligence and how it can alter the fund management industry going forward it was explained like this started with assisted artificial intelligence, where artificial adds a little bit to process, making the job easier for fund manag managers then augmented, where artificial intelligence plays a bigger role in process and decisions then the final decision would be potentially autonomous artificial intelligence where ai systems are capable of running entire invest prompt social securities themselves. nobody here is talking about that obviously because everyone would be out of a job what we are seeing people talk more and more about is whether ai is moving from the assisted phase to the augmented phase lots of discussion about how various fund managers are incorporating ai into systems. one other area talked about is block chain.
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it's quite interesting block chain which rose to prominence this we'year, whether there are spaces for block chain in the systems. looking at banks they are not adopting the technology at this point because there are concerns over cybersecurity. and at this point it's felt that's not enough to offset the potential efficiency benefits. i did speak to the ceo of fiona africfiona fiona frick, and she said it is moving along well. we had a chance to catch up with the ceo of exchange traded funds at melon, jeff mccarthy, this industry reached $4 trillion in size i said to jeff are the best of the growth years behind or is there more to come >> we see more growth. 4 trillion is just the start of the market
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many forecast by 2021 will you see 6 trillion to 8 trillion in the projects in europe, we're poised for significant growth >> so, if i put thesetwo theme together f we look at rise of low-cost investing, how tech is enabili enabled that to keep costs at a minimum and then ai, a huge expense for many funds, we are trying to understand what happens to the shape of the industry going forward i asked jeff that question let's hear his thoughts. >> it is going to be more of a convergence between active managers and etfs. part of that is the passive management and part of it is the cost pressures put on active managers you can deliver outperformance based on lower costs that's a contributing factor to
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growth i see more active managers launching etfs and seeing more active managers getting into the etf space inorganically and it's poised for future growth what does this mean for fees in the industry >> i think fees will have a trend towards downward expense ratios on investment vehicles. >> thank you very much for that. let's have a quick look at u.s. futures before we wrap up the show the s&p 500 seen up by less than a half of a point. the dow jones off by 44 points the nasdaq a 1.89% decline on friday, off by 64 points that's it for today's show orm carolin roth "wldwide exchange" is up next. finding time to get things done isn't easy.
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good morning uber's uncertain future. the ridesharing app board calls an emergency meeting why the company could be considering sidelining its ceo. the uk election aftermath. theresa may scram mibbles to reshuffle her cabinet. and jeff sessions will be in the hot seat this weak over russian meddling in the election it's monday, june 12, 2017 and "worldwide exchange" begins right now.


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