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tv   Street Signs  CNBC  October 24, 2017 4:00am-5:00am EDT

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welcome to "street signs." i'm carolin roth these are your headlines the world's top money manager says we are witnessing a shift to short-termism he tells a cnbc panel in saudi arabia that populist forces are on the rise. >> populism is going to grow and grow technology will create more populism, because technology will help many, but let's be clear, what technology will mean
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is less human input. also speaking in riyadh, the head of saudi arabia's sovereign wealth fund pouring cold water on speculation that the listing of saudi aramco could be delayed saying the ipo is on track. and novartis beats expectations in the third quarter as they say they are making significant progress on plans for a possible ipo of its alcon unit the ceo tells cnbc what management is thinking >> if we do bring this to market in a spinoff, let's say, it's going to be important that we do it from a position of strength, so that in the near-term we have to focus alcon on delivering consistent sales growth and core operating income growth. as china's party congress draws to a close, xi jinping is importalized in the constitution as he is named in the amended
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draft. just want to bring you data from the eurozone in the form of composite pmis, they were below expectations we have the flash composite pmi for october falling to 55.9 from september's 56.7 still comfortably above the 50 level. but maybe a little bit of a slowdown i will say that again all the october prints, they do seem to be below expectations, the german number that was slightly below expectations as well euro/dollar at 1.1757. up by 0.1% let's tell you where we are in terms of the equity market trade one hour into the trading session. we are moving sideways just off the session lows. we are still in the thick of
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earnings season. we had earnings from randstad, novartis, some were disappointing, particularly with randstad a big apple supplier was an out-performer. ftse 100 flat like the cac 40 up by ten points. the xetra dax flat lined as well it's all about the earnings that have been reported today i should tell you that the ibex 35 is bouncing back from that 0.6% loss that we saw in yesterday's trading session reacting to the weakened news flow coming from madrid. that is the pmi data it seems as though we are growing in the eurozone. i want to show you the sector. oil and gas, up by 0.3%. the world's biggest financiers have warned about the populist forces on the rise around the
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globe. andrew ross sorkin just wrapped up a panel in the saudi future initiative in riyadh, which included christine lagarde and larry fink they said we are witnessing a shift in politics and investment >> that order will certainly change but will be rooted in a sense of community, in a sense of culture that is badly needed for us, human beings, individuals that need to relate to a sense of belonging. to that's broadly brushed. my key message is if don't address those issues now, we may move into a darker scenario. >> populism is going to grow and grow it was interesting to see how the audience chose how technology will change the world. but technology will create more populism because technology will help
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many, but let's be clear what technology will mean is less human input in the manufacturing of items >> populism is so important to pause on for a minute because it really potentially challenges the formula which the global has benefited from over the last 30, 40 years if you think about populism being essentially about the system not working for a big part of the population, rewriting the rules, there's enormous implications for that, for free trade, for open investment the challenge, the challenge will be to address those issues in a way that doesn't kill the goose that laid the golden egg let's get out to hadley standing by in riyadh. many big hitters on that panel what do you think were the key takeaways? do we expect to hear from the crown prince this morning?
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>> good morning. as you can see behind me a round up of some of the biggest names in finance and government. thousands of delegates here in riyadh for the future investment initiative this goes down to the saudi vision 2030 this is all speaking directly to the credibility of the crown prince's move to diversify the saudi economy. when you speak to i investors in the region, it's all about coming to saudi arabia to get capital, now saudi arabia is asking them to come and get involved in the business sector. it will be interesting going forward what deals we'll see we'll hear later today not just from the business leaders but from big names like arianna huffington, ari emanuel, and i'll speak to finance ministers from italy, bahrain and egypt. a lot of news to be made at the conference everyone i'm speaking to here is pleased with the turnout whether or not this will turn out to be a yearly conference is a bigger question, but it's to
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diversify the saudi economy and turn everything around it's something he's been working on and certainly something that will take more effort to achieve. we spoke with the ceo of saudi aramco a couple days ago, he's keen to point out they're on track for an ipo in 2018 a lot of questions surrounding that ipo the last several weeks and months, but he was keen to point out they were on track >> all right hadley, thank you very much for that i want to bring in the chief strategist at campen capital management some interesting headlines from that forum in riyadh you have some thoughts about inflation, how you don't think it's transitory, the lack of inflation we're seeing >> thanks for having me. i think the story here is about the debt, demographics and disruption that's keeping a secular lid on inflation. core pc inflation in the u.s. is 1.3. the fed wants to hike. it's 1.3 and falling
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>> you think that's premature, they shouldn't go ahead with it? >> it's premature to stay transitory >> what would inflation, if you were proven wrong, where would it come from ideally it would come from the wage component other people would say technology has changed the work force so much, this is never going to happen. >> it has to come from wages all these forces, which are being described here, which i just laid out, are keeping a secular lid on it. it doesn't mean inflation is dead, it's just sleeping it will be awakened at some point. but you basically need to push harder to get it you basically need to push unemployment rates even lower. it doesn't mean -- it's premature to state it's transittory. >> to push harder is easier said than done. the japanese are tried it, the americans are trying t the europeans as well.
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is it as easy as that? >> the phillips curve is flat, monetary policy is not the solution that will only increase the inequality and populism which the guests are talking about. >> you will stick around longer. i want to get through some earnings news. novartis reported third quarter sales and profits ahead of expectations they have made "significant progress on prepping its alcon eye care unit for an ipo." it does not plan to make a final decision on a spinoff until 2019 we spoke to the outgoing ceo, joe jiminez earlier this morning. >> we've been not only able to growth business but accelerate growth this quarter sales were up 7 % profit was up 20%. it will be very important that if we do bring this to market in a spinoff it will be important that we do it from a position of
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strength so in the near-term we have to focus alcon on delivering consistent sales growth and core operating income growth that's what that management team is focused on. so obviously the work that's gone out in terms of tax structuring, legal structuring, calf out financials, all of that work continues to go on. but we're probably not in a position to -- it's not likely we could take potential action until 2019 we want the business to continue to perform well. that we're considering all options from keeping the business to a strategic sale to a capital market exit. today we did come out and say that in the near-term the business will benefit by continuing to focus on its turnaround but we -- that strategic review did indicate that additional shareholder value could be created through a capital market
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such as a spinoff. and so, you know, were we to make a decision that would probably be the direction that we are headed. but right now the focus is on getting that business up and growing in a sustainable way over a period of multiple quarters >> shares in randstad are trading lower despite the company posting sales and core profits in line with expectations in the third quarter. the dutch staffing company said revenue increased by 10%, slightly below estimates sales were up 11% in europe driven by double digit increases in italy, spain and france shares in commerzbank are trading near the top of the stoxx 600. the move is after news broke the german lender hired goldman sachs to help defend it against a potential takeover there has been plenty of speculation that unicredit may be interested in a deal, while the german government is reported to prefer a french solution. look at this
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shares in apple supplier ams are enjoying double digit gains to the tune of 15% after the company posted fourth quarter guidance well ahead of expectations the company said it expects strong demand for the iphone 10 to finish the year on a high ams did report third quarter revenues at the bottomend of its outlook. let's get back to the chief strategist at campen capital management what do you think is the key theme for earnings season? the euro strength or the resilience against euro strength or brexit warnings >> the key thing for earnings is the low hurdle the fact that the u.s. and europe, analysts have guided down expectations. they're looking for 3% earnings growth year-on-year. investors always look for a bit more if you beat 5% earnings growth on average you have a good earnings season. it's easy to be slow a little. >> that would still propel equities higher. what's not to like about
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equities you talk about a low hurdle when it comes to earnings season, low inflation. you're looking at solid growth it doesn't seem like there's a viable alternative out there to equities what's not to like >> it's clear. there's basically no alternative. secondly, if you look at the economy growing at a healthy clip despite some pmis coming in below expectations but above 55, that's okay. keeping inflation low. the only worry you have is valuations are too high. that's something you start to worry about when either the central bank raises interest rates by more or when there's a credit excess somewhere. both we don't see it >> we have a very important ecb meeting this week where they probably will announce their form of tapering or the recalibration of the asset purchases. you're not concerned about the immediate impact for europe, but you're concerned about the ripple effect elsewhere in the world. talk us through that >> if you just look at how much
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central banks have been buying, it's been enormous the biggest one in the last year has been the ecb the other ones have already tapered. the ecb is the big one if you look at the fund of flow data, almost 25% of the money went abroad. it makes sense if you compare european high yields effectively yielding as much as a u.s. treasury, and why would you take that risk. a lot of money has moved abroad. there are some credit excesses in the u.s if the money is less available that may push credit to a limit. >> so taper tantrum and u.s. credit >> we need to see about that if we're looking for canaries in the coal mine, that's one. >> thank you very much for that. appreciate it. we have been speaking about all the disruption and advances in technology, but what does it actually mean for business
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a new show on cnbc can help explain everything happening in the internet of things here's what you can expect from iot which airs at 2300 cet tonight. >> the responsibility for making all transactions go through smoothly lies with the businesses who control the flow of online money in this program we're focusing how the big players in the world of finance, the big banks, are adapting to the technology revolution. hsbc closed over 300 branches in the uk in the last five years but invested heavily in fintech, their technology hub is here at the blue fin building in london. >> you came from google to hsbc, an old established bank around since 1865 do you think you brought with you some of that tech new age spirit >> i hope so we certainly got about 1,000 jobs now in hsbc, of jobs that
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didn't exist, the title didn't exist here we have solution architects, who weren't there. we have optimization experts at the front end. certainly i hope i brought some of that. ♪ it's interesting to hear about the startup of hsbc, a bank that's been around 150 years the customers at the heart of the new services and futures, but the business itself is evolving with new processes, new kinds of jobs. the culture at big banks is changing and they've had to change due to the impact new innovation companies are having on the finance industry one of these new disruptor companies is transfer wise their headquarters are in london a short walk from the financial district they offer borderless banking, a single account for consumers and businesses which can hold
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several different currencies at once tell me about the consumer side of the business. how big is it? where do you see it going? >> right now we're moving overall about a billion pounds a month. and that compared to the banks, if you look at how much banks charge to convert money across borders, they charge 5%, 8%. we charge 0.5% so we're sooaving customers 1.5 million pounds a day we've been at it six years if you look at the total money in the consumer business across the uk we have 10% of the market share. >> digital innovation makes life easier time is money. there's so much i can do on my smartphone with one click. that appetite for the newer, the faster, the safer, consumers are
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driving it business is profiting from it. but to make it a success the financial organizations fengofri it need to protect it. they say they can. let's hope they're right building a website in under an hour is easy with gocentral... ...from godaddy! in fact, 68% of people who have built their... ...website using gocentral, did it in under an hour, and you can too. build a better website - in under an hour. with gocentral from godaddy. theseare heading back home.y oil thanks to dawn, rescue workers only trust dawn, because it's tough on grease yet gentle. i am home, i am home, i am home
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chinese president xi jinping has been enshined in the party's constitution as the 19th congress has drawn to a close. eunice can explain what ta means in practice. >> this is quite significant the delicates today accomplished two things first, they revised the party constitution to include the name of president xi jinping in the charter. it's a bit of a mouthful, but had been signaled in the state media. it's xi jinping's thought on socialism with chinese characteristics for a new era. the word thought is significant because of the fact that this word was also used when chairman mao zedong the founder of the government was also enshrined in the party constitution now party xi is seen to be on par with one of the biggest
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figures, not only in chinese history, but also in world history. the second task that the delegates had was to vote in the central committee. this is a very powerful decisionmaking body in china those people are going to be holding a session, their first session tomorrow, where they will then elect the seven most powerful people in the country to lead china for the next five years. xi jinping will be at the pinnacle next is that the second would be the premiere beyond that, we're going to wait to see who will be in the lineup because xi's name is in the party constitution, the expectation is that the leadership team is going to be stacked with xi's loyalists, and that he will have much more influence over decisions in the country including when it comes
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to policymaking on the economy >> thank you very much for that. >> claudia has the details from milan when it comes to unicredit's numbers. we'll have her later actually. coming up on the show, the managing director of the saudi public investment fund tells cnbc that the saudi aramco public ipo is on track we'll be back in two whuuuuuat?rtgage offer from the bank today. you never just get one offer. go to lendingtree.com and shop multiple loan offers for free! free? yeah. could save thousands. you should probably buy me dinner. no. go to lendingtree.com for a new home loan or refinance. receive up to five free offers and choose the loan that's right for you. our average customer could lower their monthly bills by over three hundred dollars. go to lendingtree.com right now.
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signs. i'm carolin roth these are your headlines the world's top money manager says we are witnessing a shift to short-termism he tells a cnbc panel in saudi arabia that populist forces are on the rise. >> populism is going to grow and grow technology will create more populism, because technology will help many, but let's be clear, what technology will mean is less human input. also speaking in riyadh, the head of saudi arabia's sovereign
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wealth fund pouring cold water on speculation that the listing of saudi aramco could be delayed saying the ipo is on track. and novartis beats expectations in the third quarter as the swiss drugmaker says they ar making significant progress on plans for a possible ipo of its alcon unit the ceo tells cnbc what management is thinking >> if we do bring this to market in a spinoff, let's say, it's going to be important that we do it from a position of strength, so that in the near-term we have to focus alcon on delivering consistent sales growth and core operating income growth. as china's party congress draws to a close, xi jinping is immortalized in the constitution as he is named in the amended draft, a move not taken since mao zedong
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good morning a quick look at markets and u.s. futures look like this the nasdaq off by 1.3. the dow jones seen up by 40 points the s&p 500 up by 2.5 points, after the dow snapped a six-day winning streak yesterday and the main culprit, that was ge, general electric posting its biggest drop in six years what investors and analysts were mainly worried about is the fact this company may have to cut its dividend quick look at european markets we're moving slightly to the upside maybe a bit of improvement compared to a half hour ago. the xetra dax up by 10 points. the dak 40 ecac 40 eking out a gain the ftse 100 under water we had a slew of companies reporting this morning randstad one of them that was somewhat disappointing you heard novartis in the
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headlines. ams in the mid cap space doing very well. this is an apple supplier. a the managing director of arab arabia's public investment fund has said the company's ipo for saudi aramco remains on track for 2018 he denies claims that investor interest in china could lead to a delay. >> everything is on track. 2018 is our target there is nothing that i know about which can take us off track. >> let's get back out to hadley, who is in riyadh is an important guest. hadley >> good morning. so i'm joined now first on cnbc by the ceo and i want to start by asking about this conference.
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3500 big names attending usually people come to saudi arabia looking for capital, this time saudi arabia is asking people to come and invest. >> we're excited about this conference this conference is created a platform for expert debate for them to look at both in a shrlt and long-term opportunity investment and not only that, but also we are trying to come up with objectives to have a sustainable positive impact in our country i think this time with business investors and also ankers, government agency, getting together, meeting to come up with the right formula i think with vision 2030 we have the right environment to make the kingdom a platform for a future i investmenve investment. >> so what's the message here? don't come for easy capitol to saudi arabia
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>> you need to come and take advantage of the transformation platforms that our crown prince is doing this is a vision that's clearly mapped out the future requirements for our nations in order for us to bring the future youth of our country to lead the future economy in the same time to participate in the global platform the kingdom part of the g20. i think we have an influential impact on the world economy. that's what we would like to have the partnerships with people, not to come for easy money, but come and take advantage of our transformation plans >> speaking of the global economy, let's focus in on china and your investments in that space. the party conference is happening today. what's your takeaway there in terms of future investment strategy >> if i want to talk about china, china will remain it's very important country in the world economy. china is transforming. china has been a very strong
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fueling economy growth for the last 30 years. and it will remain last year, for example, they were predicting the gdp growth around 6.5 they end up with 6.9 this tells you that the engine growth in china is not going to be something that can be controlled it will come down to transfer speaking of savvy, china is an important market for us. china is almost 80% of our total business in asia in the same time we look at china it's a platform for our future growth. there is a strategy, called 2025 the growth is very important china is going to be one of our growth engines not only from a market perspective. but also from protections growth perspective. from the products and r&d as well china has abdicated huge funds for technology acquisitions. they have a strong technology base development in the future that's why sabbic has soaped one
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of the largest centers in hang shy in o shanghai to grow >> we have seen growing economic cooperation between the kingdom and russia what opportunities do you see going forward there? >> i was honored to be part of king salman's delegation to russia it's an enormous opportunity that the kingdom and russia can develop. especially the energy industry russia has the highest reserve of gas this will give us opportunity to look at how can we leverage this abundant resources for our industry we are entertaining some opportunities with russia and hopefully it will materialize soon >> we'll have to leave it there. the ceo of saudi basic industries back to you. >> thank you very much for that interview. >> let's switch gears.
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angela merkel's party is raising budget concerns. an internal paper says the government can invest 30 billion euros over the next four years, but proposals could cost 100 billion euros, this as the bundestag reconvenes following the general election annette is watching this story can the jamaica coalition, as we call it, can they stick to the black zero that the cdu is so proud of >> if they will fulfill all their promises, it's a clear no. count them altogether, that was an exercise done by the ministry of finance, that would cost them some 100 billion euro. the financial wiggle room they're having is some 30 billion euro so i guess they have to cut down on their promises. each party has to select
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important topics for them and give up others, otherwise they won't come to a coalition here in germany but i guess first signs are promising. we are hearing some pledges also from the head of the liberals that they -- that he would actually also subscribe to higher taxes for the likes of google and amazon, something which is going down well with the greens bottom line is from early negotiations here in berlin, that everybody wants to act responsibly and get negotiation talks well on the way. i also caught up with the leading figure of the greens, who is a former spokesperson of the party. i asked her how the coalition talks are going in her opinion take a listen. >> the four parties do really stand for different kind of
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politics, as you know. the greens, we are in favor of to solve the climate problem we are also the more progressive party within the coalition we do really have a great stand on social justice issues, and, of course, migration we stand for an open society and to form a coalition with cso, with a conservative party in the south of germany and with an fdp, which wants more to reduce the strength against climate change this is not so easy to handle. >> let's talk about the tax issues it seems you might have found an agreement already between the liberals -- >> you know more than i do the talks are just beginning and all i know is that the
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finance ministry did try to count together all the wishes of all the parties, and said if we just collect it, it's hundreds of billion of more expenditure nobody knows how that should work >> so the greens are less optimistic because they have the most to lose as it stands when it comes to their environmental policy, also their pledges to invest more in social justice. the other end of the spectrum is the csu and the cdu. the other end of the spectrum, as i was saying, is a little bit more optimistic. when it comes to explanatory talks and also coalition talks i caught up with the deputy chairman of the parliamentary group of the cdu, and i asked when he thinks we'll have a new
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government take a listen. >> we should have a government before christmas, because then we have the christmas break, and so it's the wish of all of us that we will have this coalition treaty before christmas. so we have party conventions and we have this target >> going forward, europe is also on the agenda. i think even today when it comes to the explanatory talks what do you think the jamaica coalition will yield for european politics in. >> i guess we will continue our politics on the one hand we try to put europe together, so we will work very hard on the target together with france, especially with france i guess there's some common agreement that france will be the main partner in the future
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development of europe. we will mane tan our will maintn regarding brexit there's no cherry picking regarding the british government, and we have to work on the further integration of europe we are skeptical on insurance scheme, but on the other hand we know we have to invest in europe we have two parties that -- may have two parties within the coalition, if the negotiations are successful with the green party which is pro europe, and the other which is more skept ticic >> today is the day the new parliament will convene for the first time for the new government so it's a record number of lawmakers, more than 700 lawmakers in the new parliament. that is because also the alternative for germany made it
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into parliament. so domestically we have a strong discussion, so to say, about what the event of the alternative for germany inside parliament will do to the political culture here in the country. another highlight of today is, of course, that wolfgang schauble will be elected as the new president of parliament, and tonight at around 6:00 there will be a new round of explanatory talks between the parties. today the big focus is europe, finance and the budget with that, back to you >> all right annette, thank you very much for wrapping everything up for us. i see you tweeted a picture of all the buses that will be shuttling the lawmakers around berlin that was quite interesting. a record number of lawmakers there. let's move back to the u.s u.s. president trump says a popular tax savings deduction will not be curbed to pay for
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tax cuts lawmakers had proposed the idea of shrinking the tax break for the 401(k) tax retirement program. president trump tweeted there will be no change to your 401(k) this has always been a great and popular tax break that works and it stays president trump is urging china to increase pressure on north korea. previewing the trip, a white house official said that the president will tell his chinese counterpart, xi jinping, to ensure implementation of the u.n. security council resolutions against pyongyang. trump will also visit japan and south korea in what will be his longest foreign visit yet. figures released yesterday showed that china's exports to north korea jumped more than 20% in the first three quarters of the year head to our website to find out how pyongyang may be using algae
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to work around sanctions e-mail the show, let us know what you think the address is streetsignseurope@cnbc.com and find us on twitter, streetsignseurope@cnbc. coming up, we'll speak with the president of bafin after this short break stick around♪ can ♪ well i'm gone ♪ can i kick it? ♪ to all the people who can quest like a tribe does... ♪
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welcome back italy's market watchdog has authorized a relisting of bank ka monte dei paschi. the bank also said that third quarter results will be released at the beginning of next month and unicredit posted gains in third quarter net profit bolstered by the sale of its pioneer asset manager. the cet ratio was above 13.5%, up from 12.8 % at the end of june the italian lender reporte
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results well ahead of schedule after mistakenly sending some results to analyst and investors overnight. claudia has the details from milan. a bit of an embarrassing move there, but if we look past that what did the results show us about the restructuring efforts? >> the results give a positive sign though the stock is not reacting much to them this morning. for the first nine months there is a decline of revenues, but in terms of profit, profits are at 4.6 billion with preliminary numbers for the third quarter at 2.8. back to the revenues, they are declining at 3.9% for the quarter and declining by 2.7% on the nine-month period. the good news is the core tier ratio at 3.5, that is an increase also lone loan loss provisions
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declined to 598. that's another issue that everyone is facing the stock so far has been up 25% this year. about 80% since the takeover of the helm of unicredit. the stock overallcontinuing to perform well today, not reacting much to the preliminary numbers. keep in mind that the definitive numbers, the third quarter official date for the numbers is the 8th of november. back to you. >> thank you very much for that. the british prime minister, theresa may, told the commons that important progress on brexit was made at the eu summit she hinted there won't be transitional deal until the uk makes a larger trading deal with the block. may also said the uk and eu are close to reaching agreements on the status of ex-pats. >> on citizens rights, both sides share the same objective of safeguarding the rights of eu nationals living in the uk and
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uk nationals living in the eu. the negotiations are complicated and deeply technical, but in the end they are about people. i'm determined that we will put people first eu citizens make an extraordinary contribution to our national life and we want them to stay i know that eu member states also value the uk nationals living in their communities, and i wanted them to have their rights protected, too. labor leader jeremy corbyn responded that may's comments sounded more like the movie "groundhog day." he added it was no clearer when trade talks would begin and what the uk has agreed to so far. staying with that topic. regulators will need transitional fixes to avoid market distortions after brexit.
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that's according to bafin. that president joins us now, the president of bafin, felix joins us now is a disorderly exit from the eurozone a much more likely scenario for you at this point as a regulator >> well, we don't know that's actually the whole point. like everybody else we have to hope for the best and prepare for the worst. we have to plan a contingency like everybody else and need to make sure that in case we do have the cliff edge situation in march 2019, that we are well prepared to mitigate risk to financial stability. that's our core job. >> what exactly would that look like the german government says they are willing to offer special market access to british banks in return for the same, or the german banks or european banks
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have you clarified some moves you would have to take >> we can't replicate as regulators issues which need to be clarified on a political level. but there is a whole range of rather technical but very important issues, which we can deal with. let me just give you one twor examples the application of internal models, which is key to all the major banks, they would have to be replicated under eu 27 conditions that is very unlikely to be done within a couple weeks time around the potential cliff situation. we will look forward to more flexibility on that. another example about splitting well-established so-called ecosystems of i.t. processes, people, processes and everything else, into new branches on the continent that will take time,
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and we are very much prepared to safeguard such transitional processes to avoid threats to financial stability. >> the lack of clarity, this uncertainty is playing into the hands of the city of traffic fort, which seems to be the front-runner when it comes to attracting much of the banking business last week, we saw the tweet from goldman sachs who praised the city of frankfurt saying it's a great city, great weather. he will be coming back more frequently do you feel like you have won the race essentially >> that's not the way we view it obviously, i can't help but concur with lloyd flank fiblank. i met him when we were there there's big interest in germany and frankfurt. let me be clear about one thing, we are supervisors and financial regulators, we are not a marketing agency if banks come out to us, we spell out the conditions on which financial business needs to be conducted
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in my country. we don't market particular locations. so we try to be professional partners for any major bank or financial institutions faced with massive challenges to change their business models and everything else. >> that, of course, i understand you're not a marketing agency. i know you're concerned about other aspects of financial stability in the markets 10,000 new final jobs will likely be created. that's according to a most haven't stud recent study we see property prices in and around frankfurt have skyrocketed. are you not concerned when interest rates will rise, there's so much demand and influx coming from the uk and europe, that maybe this real estate bubble will get worse >> well, you know, that is all rather relative. depends on where you are
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in frankfurt you pay rent in a year what you pay in a month in other places am i concerned no, i'm not it can be sorted out. >> so you're not concerned if the ecb stays lower for longer they talked about the sequencing, we won't see the first rate hike until 2019, the first full rate hike not until 2020 is that a concern to you then >> again, we are financial regulators we don't comment on monetary policy we deal with monetary policies as they are. we are dealing with hundreds of banks every single day to make sure they're properly prepared to cope with both a low interest environment as of today and as well as a potential risk increasing interest rates going
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forward. we are cautious about balance sheets being well prepared and having enough reserves to cope with that. that's part of our agenda. >> i need to ask you about commerzbank, once again in the news about hiring advisers cnbc sources have confirmed it's actually goldman for a defense adviser. are you in favor of any specific bank i know a french solution might be favored over an italian solution where does bafin stand on that >> supervisors should be cautious on commenting on mergers, particularly cross-border mergers i don't have a preference. i think it's -- the senior management of the bank has to make such decisions. we, in case of any such marriager would happemarriage merger would happen, we would
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make judgments about the merged entity on whether they're stable enough and well enough equipped do we have a preference in any direction? no don't >> we'll leave it here thanks for your time before we wrap up the show, a quick look at u.s. futures last time we checked they were indicating a mixed start to the trading day. the dow jones is seen higher to the tune of 42 points. the nasdaq off by a smidge i should tell you the dow snapped a six-day winning streak yesterday. the main culprit that was ge, general electric shares posting the biggest drop in six years, that's because analysts are concerned about the likelihood of this company having to cut its dividend the dow was off by 54 points in yesterday's trading session. when it comes to the european market picture a bit more friendly than what we saw from the u.s the dax up by 0.1% the cac 40 eking out a gain of
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0.1% we're in the midst of earnings season we had numbers from the likes of novartis, randstad, and i also want to show you what's happening with the fx markets. the dollar/yen pair is moving off the three-month highs we saw yesterday, back below the 114 level. the euro/dollar, 11.1764. largely up changed out of the pmi numbers for october which showed a dip, maybely slightl sy disappointing but a healthy number that's it for "street signs. "worldwide exchange" is up next. bye-bye. zar: one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68.
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market alert global stocks are edging higher after the dow snapped a six-session winning streak yesterday. new this morning, china does something it hasn't done in modern times. and our news maker of the hour blackstone chairman steve schwarzman will join us live from saudi arabia. it's tuesday, october 24, 2017 "worldwide exchange" begins now. a very good

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