tv Street Signs CNBC December 6, 2017 4:00am-5:00am EST
. welcome to "street signs." i'm willem marx. these are your headlines european stocks sell off after the nikkei posts its worst day of 2017 following another weak session state side. and steinhoff shares plunge after the news of the company's ceo is resigning amid an accounting scandal here at the fortune global
forum, world leaders speak out against protectionism, the u.s. ambassador to china tells me that president trump's policies are appropriate. >> what we're asking for is fairness and reciprocity and open opportunity to compete. >> flying in the face of decades of u.s. foreign policy, u.s. donald trump says he plans to recognize jerusalem as israel's capital city >> overall, i cannot generalize saying that the u.s. is making big mistakes, but there are big mistakes that the united states should admit it's not a pretty picture this morning for european equities as we look at the heat map. a lot of red across the board. the stoxx 600 down 0.3%. if we look at the sectors,
driving some of that you can see real estate, food and beverages, technology, essentially everything across the board is down, specifically looking at household goods, autos, technology and banks all performing poorly this morning. looking at steinhoff shares, they lost half their value in today's session after the ceo stepped down amid accounting regularities europe's second largest furniture retailer delayed publication of results shares are trading sharply lower for delivery hero. they will fund acquisitions. britain's saga issued a profit warning saying the tour business has been hurt by the collapse of monarch airlines they plan to reduce costs by 10 million pounds next year. president trump is set to
recognize jerusalem as israel's capital. senior officials in his administration said trump will announce the decision in a speech today and that will trigger plans to move the u.s. embassy from tel aviv to the ancient city critics say this move would break with decades of foreign policy and could jeopardize efforts to mediate peace between israelis and palestinians. andrea mitchell has more >> reporter: jerusalem, the ancient city claimed by three of the world's great religions, central in a dispute pitting president trump and israel's prime minister against most world leaders, telling heads of israel, egypt, jordan, saudi arabia and palestinians today he will recognize jerusalem as israel's capital, an unprecedented move, breaking from policy since israel was created despite warnings from turkey's president erdogan, the kings of jordan and saudi arabia and all
nate t nato's allies could kill hopes for peace. state department warning agencies to be alert for violence like the palestinian uprising when israel's former prime minister sharon went to the contested holy sites in 2000 a warning echoed by secretaries of state and defense >> is the secretary of state on board with this? >> he made his position clea to the white house department of defense has as well it's ultimately the president's decision to make he's in the charge >> reporter: the president won't move the u.s. embassy from tel aviv to jerusalem right away, despite a campaign promise >> will move the american embassy to the eternal capital of the jewish people, jerusalem. >> reporter: all this complicating jared kushner's task t negotiate middle east peace. >> it could start uprisings in the region, in jordan, all the places that see this as anathema >> that's andrea mitchell
reporting. saudi arabia, turkey and jordan all warning the u.s. it's the wrong move iran's supreme leader said this is a sign of america's incompetence and failure he said palestine will be free and the hands of the u.s. are tied on the issue. from washington, president trump says he expects lawmakers who are wrangling over massive tax reform plans to put a bill on his desk quickly house and senate legislators are expected to meet to bring together their respected versions of the tax overhaul differences remain over key issues including the repeal of an alternative minimum tax lawmakers said they hope to send a joint plan to president trump by christmas jeffrey gundlach questioned the corporate tax rates. he said it is a strange environment for a tax reduction.
wilfred frost sat down with brian moynihan and steve schwarzman to get their views on the tax plan and the state of the u.s. economy they both told him they were optimistic. >> reporter: brian moynihan was upbeat about the state of the u.s. consumer, especially during the current holiday quarter. >> consumers are moving cash about 6% over last year. credit and debit card spending 6.5% the year before those numbers have been five on credit and debit and about 3 on general cash, that's cash out of the atms, teller, payments >> so that's doubled >> it's doubled. that's 2.4 trillion dollars in spending so that doubling means that things are going on in the economy, which is good and so consumers are in good shape. >> he also addressed the company's extra $5 billion buyback announced this morning and said it showed the bank
continued to be overcapitalized and he had this to say about tax reforms impact on the economy. >> america needed a couple things one is a more competitive corporate tax rate that's in the bill second a territorial system so people can operate in a global economy. and not have the different american systems versus all the other systems operate. that's in the bill and good for corporate america. >> steve schwarzman addressed the political significance of tax reform for president trump >> i think it's actually a game changer, because there's been enormous frustration in terms of getting legislation passed this is a whopper. there's no doubt about it in terms of its impact scale, and the fact that many people thought that this wouldn't work, and it seems at this point a
pretty good shot that this is going to get resolved and signed before christmas. >> from the goldman sachs financials conference in new york, wilfred frost for cnbc business news. to talk about that, we are joined by nick nelson from ubs i know this is not your focus, we heard from jeffrey gundlach and steve schwarzman, this is a great political move, but gundlach thinks this is not necessary at this point in time given what's going on with corporate earning thearnings is this necessary to help u.s. corporations >> in the long-term, structurally, lower corporate tax rates do help the corporate sector generate revenues, more taxes, high growth that's the principle of course at the same time we have the fed trying to start to slow the economy to a degree, in the sense of gradually taking baby steps to normalize interest rates. of course loosening fiscal
policy at the same time is maybe pulling and pushing in didn't directions maybe just to pick up on that performance point, yes, it's true in local currency the s&p is outperforming the u.s. stocks by ten percentage points, year to date. if you look at europe in dollars, if you look at them in the same currency, europe outperformed, that's partly because the euro has been significantly stronger than the u.s. dollar. >> let's talk about that is that good news for european financials or only those that don't have exposure to the u.s >> definitely a reflection of a stronger economy in europe if you look at european pmis, one of them hit a 17-year high this economy is growing strong, at 2.5%. it's growing more quickly than the u.s., more quickly than the uk things have turned around. i think the currency is a reflection or one part of an expression of that strength in europe the exporters in europe are
clearly being hurt by the exposure to the u.s. because they're repatriating currency back into euros. that's offsetting the earnings right now the currency is a 3% drag on european earnings. >> we've seen strong earnings growth in europe, including into the third quarter. i wonder do you think that's a one-off or is that continuing into 201 >> this is the first year, amazingly 208 is the first year in seven years that corporates are giving consensus numbers the number this year is 12%. we can assume that will be close to the actual outcome. the question for european investors is does this continue into 2018 and beyond is it the beginning of a new profit cycle or just a flash in the pan? this year half of the earnings growth is coming from financials and energy big base effect from the bounce back in commodities. that won't happen again in 2018. so youdrivers.
we see operating leverage, regearing of balance sheets, we think this is the beginning of a multi-year profit cycle. what are the downside risks for european equities? >> i think most are external to europe if you think back to 20 17, the french election, the german election, we have spain, catalonia, we have elections on december 21st. we have elections in the first quarter in italy but i think the bigger risks are what happens in the u.s. the u.s. is eight years into the economic cycle if the u.s. was to slow a downturn or go into recession, certainly not our view, but if that was to happen, then i think that would cut short the european profit recovery and economic recovery. the bigger risks are external to europe now rather than internal. >> even leaving aside those risks, which sectors do you see struggling next year if we have this economic recovery and we have this bounce
back in growth and slightly higher bond yields, we would be cautious on the expensive defensives so some consumer staples, food producers, beverages, household products, those are the areas to be more cautious on. what about the role of interest rates? do you think that will encourage firms? you mentioned releveraging, refinancing, will that continue because of where the rates are >> companies should start to regear it's a crazy world companies have a dividend yield of 3%. the corporate credit yield is 1% so there's a huge gap between what they're paying equity holders and bondholders. if they were to issue more debt at 1%, that would be massively cash flow enhancing. we've seen u.s. companies do this aggressively. we've seen net share buybacks in the u.s. run at 2% per annum >> we have to the talked about energy i want to lock at tok at the pr
for oil prices >> energy we are positive because of the high dividend yield. a 5% dividend yield on european energy stocks. that's the highest of any of the 30 sectors we look at. cash flow is turning positive. we're getting this cash flow generation coming back partly because the oil price is coming through. because they cut capex so we see energy as one of the better sectors >> that is nick nelson from ubs. e-mail the show on these topics or any others. the address is firstname.lastname@example.org you can also tweet us and follow us on streetsignseurope@cnbc. coming up, our door is open to trade that's the message from beijing's vice premiere. find out what the u.s. ambassador to china had to say about that next. happy anniversary dinnedarlin'
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about the threat of protectionism as he opens a a sr party official criticizing u.s. trade policies does that equal people throwing stones in glass houses >> we've had this narrative from davos, where we heard the premiere, premiere xi talking about how china would take up the mantle and be a champion for globalization and free markets, and then there was a bit of head shaking among the business community. you got to give them this. they are consistent at least in their messaging. that's what they came here to deliver at this forum. a repeat of the same message and a swipe at the same time at donald trump because of course the latest twist in this relationship is the united states unwillingness to
recognize market economy status for china with the wto so we have a new front here in this battle. but i had the opportunity to sit down with the u.s. ambassador to china. i asked whether he felt that they were in a sense losing the pr war let's listen to what he had to say. >> the reality is we're probably one of the most open and free markets in the world this market is closed, especially in a lot of areas in high-tech n technology, in pharmaceuticals. you can name a bunch of them where this market is not open to high-tech companies that we have that should be -- companies here can compete in the united states, but they don't have the similar opportunity to do that here so what we're asking for is fairness and reciprocity and
open opportunity to compete. >> i think that's a pretty fair manifestation of how washington feels right now about the limited progress they are making on key areas of the chinese economy where they feel they should have greater market access for u.s. companies. moving on, we also had the chance to talk to the ambassador about that other area of friction between the two countries. that's north korea of course since the latest missile launch, we once again saw u.s. and south korean forces exercising together to show and meet might with might. the chinese uncomfortable about that but the u.s. ambassador feels if anything they should be doing more at this stage to put extra pressure on pyongyang.
>> there's a lot of frustration. i know xi jinping is frustrated by what the north koreans had done when he had the bricks for them, and we are frustrated as is japan and south korea and most of the rest of the world. but also i think the people in north korea are the ones who are suffering the most from a dictator that's not listening to the rest of the world and not willing to look at other options. secretary tillerson said we are not advocating for regime change we want to see progress. >> i just want to circle back to the trade issue for a moment alongside the vice premiere, we also had the canadian prime minister, justin trudeau he's been in beijing trying to get progress on his own trade
deal with the chinese. as we all know now, very little appeared to be achieved in public there are still some outstanding areas of disagreement, not least in the treatment of protection for workers and workers rights more broadly whilst here in a sense he repeated some of the comments that we had heard from the chinese vice premiere. i think there was an effort on his behalf at least to put a little bit of clear water between canada's policies on trade with china and washington's policies on trade with china right now interesting developments at this fortune event. back to you. >> geoff, thanks a lot sounds like a bunch of talk but not as much action as some would have hoped bitcoin is yet again currently trading near record highs. above $12,000.
the run up has attracted the attention of regulators and investors, but what does one of china's richest men think of the cryptocurrency space andrew ross sorkin put that question to jack ma when he caught up with him in shanghai ma said he feels too uninformed about bitcoin. >> honestly i know very little about it i'm totally confused even if it works the whole international rules and laws on trade, financing will completely change i don't think we are ready for that i think i'm focusing on the ali pay, u.s. dollars, euros, that's -- >> but notbitcoin. >> no. >> jack ma there in conversation with andrew ross sorkin. google has blocked youtube on amazon devices in an escalation of a fight between the two tech giants. both companies have been in disagreement over access to each other's platforms. google said a lack of
reciprocity from amazon led to the pulling of support from youtube on the smart speaker and streaming devices. theresa may is under mounting pressure after the failure to secure a break through brexit deal in brussels earlier this week. the democratic unionist party of northern ireland has publicly criticized her government's handling of the talks. dup leaders claim they were kept in the dark over proposals concerning the future of the irish border leading brexit campaigners including the foreign secretary, boris onsojohnson reportedly challenged theresa may in a cabinet meeting this week. just staying on the sub ject of the british prime minister uk officials say they foiled a plan to assassinate here two men planned to attack downing street with knives and explosives both suspect also appear in court today on terrorism
charges. this follows the release this week of several high profile reports on terrorist attacks the uk's top security official said nine other potential attacks have been foiled since march. talking about markets now, surging equity markets are having a profound effect on u.s. economic growth. economists see a 1 % gdp from higher stock prices, something that president trump will not stop talking about it comes at a perfect time for americans as they hit the stores for the holiday season. >> reporter: americans have that wealthy feeling and have some of it to spend for the holiday season there's 5.4 trillion of additional wealth out there from stocks
barclays and goldman sachs believes as much as three quarts over a point of the recent rise in gdp growth is coming through the wealth effect. the rule of thumb is that people tend to spend about 5 cents of every additional dollar in their asset values jan hazius says half of those gains come from equities one clue americans are feeling more like this is the decline in the savings rate it has fallen to 3% now. as portfolio values rise, people feel they need to save less and they can spend more of their paychecks. the wealth effect doesn't sustain itself unless the market gains sustain themselves more of this wealth effect fueled growth is in front of us as it tends to hit the economy with a lag slightly more than half of americans own stocks so the wealthy feeling should be widespread but a small percentage own the bulk of stock wealth, so the
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welcome back to "street signs. i'm willem marx. these are your headlines european stocks sell off after the nikkei posts its worst day of 2017 following another weak session stateside. and steinhoff shares plunge after the news of the company's ceo is resigning amid an accounting scandal that's rocking the second largest furniture retailer in europe at the fortune global forum, world leaders speak out against protectionism, the u.s. ambassador to china tells me that president trump's policies are appropriate. >> what we're asking for is fairness and reciprocity and open opportunity to compete. >> flying in the face of decades of u.s. foreign policy, u.s.
president donald trump says he will recognize jerusalem as israel's capital city. >> overall, i cannot generalize saying that the u.s. is making big mistakes, but there are big mistakes that the united states should admit speaking of jerusalem, israeli prime minister benjamin netanyahu speaking at the annual jerusalem post diplomatic conference i'm sure that question of jerusalem as the new capital will come up at some point i'm joined by brian klass, and i have to start with that question of jerusalem is president trump helping or hurting his cause in that part of the world >> i think you have to understand with what trump is doing, he's playing to a flartifla narro part of his political base at home the reason why i think this isss
mistake, it will create a situation where the u.s. is not even remotely impartial. this puts the nail in the coffin of any sort of myth that the u.s. is an impartial broker in the conflict it also creates the risk of violence there's a lot on president trump's plate now, both domestic and foreign crises he's also dealing with this mueller investigation. do we need to put violence in the middle east on that plate, too? >> it seems there's no signs mueller is ending the investigation soon how do you see that impacting president trump's domestic agenda and his abilitylegislati? >> it's crippling i had presidehis presidency there's no sign of it slowing down new s reported yesterday that mueller subpoenaed part of his bank records, looking for
possible financial crimes. as a result of that, it's extremely naive to believe this will wrap up soon. everything we've seen including the recent guilty plea from michael flynn suggests that he's building a prstrategy to go against trump, get coordinating witnesses that can move up the food chain that's not what you do when you are wrapping up a investigation or winding down a investigation, it's what you do when you ramp up one >> we have not heard a huge amount from capitol hill on flynn, but we have now started to hear a lot from members of the house on the tax reform bill it seems like that 30, 35-member house freedom caucus are throwing their weight around again. they've been realtively q relaty quiet, now they're trying to throw their weight around again. do you think that will be
difficult for paul ryan? >> yes, he's in a bit of a vice. there's the conservative house freedom caucus which is much more hawkish in terms of social spending they all voted for a tax bill that will increase the deficit considerably in the u.s. but, you know, this is the big payoff that republicans have been waiting for the open secret in washington is that most establishment republicans find trump distasteful, but the diagram between typical republicans and trump, in the middle is tax reform for a lot of them they have put up with trum top hap to have ths payoff even though there's major jockeying going on, it's still likely they will pass this bill. it may be a poison pill because this bill is polling in the 20% support ratings, it's more unpopular among general americans than some tax increases in the past. it's something where they have to be careful about the politics
of this. that americans do understand that the vast majority of the benefits in the bill accrue to the richest americans. there are the possibility of tax increases on the middle class later on and the deficit will increase >> we have the situation where the house and senate have to reconcile over the bill. we know the house leadership appointed theirferences to talk about this. the house wants the corporate tax rate to kick in next year, the senate wants 2019. trump suggested 22% or 20% the house suggesting four different tax brackets the senate saying let's stick with seven does the senate have more leverage in the reconciliation because they have a much more narrow margin for maneuver the senate often does. but there's factions in the house like the freedom caucus
who can hold bills hostage because they're not going to pass one version of the bill, they will come up with a compromise solution, it will require likely votes in both chambers that means there's another flash point for opposition to the bill the bill moved so quickly the public outcry about it has been muted. even though many people assume this is a slam dunk, a done deal, there's a lot of wrangling behind the scenes that people have to deal with before this becomes law. >> a lot of economists point out where there may be a near and medium term benefit to the economy from this tax plan, there's yet another huge transfer of wealth from those less privileged in the u.s. to those with less money already. i wonder, we've seen a report from the federal reserve about four, five weeks ago talking about growing income and equality will that continue to corrode the u.s. political landscape >> yes this is the big hidden story of tax reform if you look at changes in the
u.s. economy, from 1980 to the present, the top 1% in 1980 had 11% of the wealth, now it's 20%. when you think about russia and the u.s. having this level of wealth, it's a red flag. i think when we think about the long-term trends, things like automation, all sorts of aspects of inequality drivers that will be exacerbated in the future, the question is are we ready to cope with the political risk of an extremely unequal system? i think that's what you are starting to see glimpses of in the u.s. this backlash in politics this dysfunction, polarization will be the new normal if those underlying forces that drive inequality are not addressed there's an obvious transfer of wealth towards the top end of the income spectrum. i think this is the question that more people need to be
asking if they're thinking 10, 15 years into the future, is this sustainable >> looking ahead to the next two, three weeks as that reconciliation continues, do you think it's likely they will pass the kind of reform they promised i think they will pass something. the republicans have made a calculation it's better to pass something and run on an actual accomplishment than to have a full year in office controlling all branches of government and have nothing passed. ultimately they will iron out their differences. most likely it will pass it will probably do so with narrow margin the and may not be as ambitious as they hoped i think something will go to president trump to sign. >> thank you very much for that. brian klaas from the london school of economics. there's new signs that special council robert mueller and his russian investigation may be expanding to president trump's back accounts.
nbc's chief white house correspondent hallie jackson has some of the latest details >> reporter: tonight new conflicting reports on whether the special counsel is actually inching closer to the president's personal finances after reuters and financial times reported robert mueller's team subpoenaed deutsche bank for donald trump's records the "times" calling the move quote, a signal the probe may be moving beyond contacts made between mr. trump's campaign and russian officials into the billionaire's business dealings before running for office. >> has mueller crossed a red line, mr. president? >> thank you >> reporter: the president not responding today but this summer told the "new york times" his finances should be off-limits to mueller. would that be a breach of his actual - >> i would say yes >> reporter: now the presidential advisers says that the stories are not true >> no subpoenas issued or received >> reporter: the president's personal lawye
said they confirmed that with deutsche bank but not might be allowed to tell the team about the subpoena, since some are supposed to be kept secret deutsche bank tells nbc news it takes its lega obligations seriously and committed to cooperating in authorized investigations into this matter. it's yet another twist in the russian investigation, five days after national security adviser mike flynn pleaded guilty to lying to the fbi. >> when did the president know that mike flynn lied to the fbi? >> as i said earlier, i referred you back to john dowd's clarification. >> asking for date when did he find out announcement on friday or prior to that? >> refer to john dowd. >> reporter: john dowd tell td president's outside lawyer, tells nbc news i'm not going to engage further on this. adding no more questions we have some news headlines coming out of the conversation
with the select committee. they have been demanding a series of impact assessments relating to brexit and what that could mean for different sectors across the uk. the government provided some information on it, but the committee is pushing for further information. he says the government has no overall assessment on brexit he says the government will do the best they can do negotiate for different outcomes of brexit he says they will at some stage do the best they can to quantify different negotiating outcomes for brexit let's look at sterling briefly in reaction to that. sterling down by more than half a percent at this point. looks like 0.4%, taking a nose dive this morning on that chart. coming up, it's deal time with disney and fox close in agreement and nestle on a spending spree
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welcome back to "street signs. rex tillerson has sought to reassure european foreign ministers about the direction of u.s. policy under president trump. tillerson has heard quite a few concerns from european counterparts about changes to america's foreign policy those concerns include the decision not to certify iran's compliance with the uk deal as well as washington's withdrawal from the paris climate accord. i can imagine that jerusalem will be one subject of conversations. hadley who is live for us at the nato summit. sounds like several of these issues are being addressed >> absolutely. it's interesting to note among the issues being talked about are issues regarding whether or not european country also try to take defense into their own hands and whether that could be a substitute or a rival to nato. let's listen in to what the polish foreign minister had to say to me earlier. >> it's an experiment of course.
i know that european union is dreaming for decades to have a diverse identity we joined this experiment, we hope this will not duplicate efforts of nato. we will not compete with nate coor with the united states. but we will be a supplementary if this is implemented in this way, this will be added value to nato >> in terms of what you're hearing from rex tillerson, there's been a lot of speculation back in the united states that he could be out of a job soon does that worry you when you sit at table and talk to him about u.s. commitment that you may not be speaking to the right person? >> well, in every country there's a speculation about future of the politicians. every country has ambition to choose the better poll signals
if su poll signa politician this is also going on right now in poland. i don't want to interfere with the united states. >> so you're dealing with the people at hand >> i'm dealing with the person in charge now. we will deal with others who will be in charge in the future. >> for more on that, i'm joined by estonia's foreign minister. sir, in terms of the natd too allian alliance, there's questions about whether countries could take their defense into their own hands, do you think a construct like that is necessary at this point? >> i do not see an ail delternae to nato. both the european union and nato are european organizations designed to maintain security in the region
they do so each in their own political way. obviously europe has certain strengths in the area of social security and nato has, well, been focusing on the traditional military security. in today's world, i think these things are becoming increasingly invisible. it's important that we coordinate the best we can and participate in each other's exercises, for example we do as much together as possible to compliment each other's strengths. i think it's only natural. i think that the european unions permanent cooperation that was launched recently, that's a great way to make europe pay more attention to the need to devote more resources to defense and security and work towards more sharing between the two >> when we talk about that burden sharing, making these
economic commitments to nato, are you satisfied with the level of commitment you see from countries? several months ago when we were here in brussels and president trump was addressing nato members, he said everybody needed to pull their fair share to make that 2% commitment are you satisfied with how that's going >> the agreement has been expressed before by president obama and before that by president bush so it's not natural that u.s. has to show so big when it comes to the alliance. europeans need to do more. this group is among the countries that spend 2% or more on the gdp on defense. but i'm happy to see this group actually expanding so there are going to be more countries next year who will meet that important threshold. i believe that the dynamic is important. we shouldn't expect everyone to get in the middle of a year or
two. but a few years ago, all the heads of state of government actually signed up to the commitment of this regarding working towards that goal. >> you're impressed the way it's going in terms of commitments being met. looking around the table, you're talk being north korea, terror, migration flows, looking at what's happening in the middle east rex tillerson is here. are there concerns when you look across the table and discussion these issues with him, that he might not be the right person to be talking to? there have been reports in the u.s. press that he might be out of a job soon. does that cross your mind? >> we have 29 member states, there are elections, every year more than one member state of the alliance will have elections. >> you're not worried about it >> there are governments in particular countries that have
coalitions that collapse between elections there are early elections in many countries. so we are actually quite experienced in working together even though we know some of the colleagues might be gone one day. rex tillerson is the u.s. foreign secretary, and european colleagues and european ministers are committed to working with him after the next elections there will be a new colleague from the u.s., or before that, we very much believe in the institutional continuity that's true of the european allies >> a couple years ago in warsaw we were talking about the broad concern that nato was losing relevance and that commitments to nato were notas strong as they once were that was a deep concern for eastern european countries today what would you say is the greatest threat to the nato allian allianc alliance >> it's becoming more diverse
and complex. as i said, security is individual you can't draw a clear line between the soft security, hard security, military security, non-military security. events that happen in a very distant corner of the world have almost immediate implications for your own security. we are concerned about the korean peninsula, the nuclear and missile programs that the north korean regime is running we are concerned about the developments in the middle east. there is -- well, there's quite a long list of tensions and conflicts and situations obviously russia continues to be a big concern with regard to its
ongoing illegal annexation of crimea and occupation of parts of eastern ukraine and georgia, also syria so there's quite a long list of different things >> i'm afraid we have to leave it there we will be speaking later today with the secretary-general of nate to we'll bring you that interview tomorrow >> thank you very much starbucks has opened its biggest outlet in the world in shanghai the coffee chain partnered with alibaba to produce an augmented reality experience within the 30,000 foot mega store starbucks chairman howard stuchl said the opening was an important step in expansion. >> we had an enormous run in a lot of countries i think we're at a turning point now with 3,000 plus stores, that
this is a turning point for the cooperation, the investment, the focus and intention on china becoming the biggest revenue market in the world and the profit will shift from the u.s >> right now it's 70% u.s. >> yes >> how will it change the company when more than 50% of the profits come from a place like china people talk about are you an american company are you a chinese company? how will it change the way people feel about it >> it's an interesting question. i think the problem and the challenges we have early on when we came to china is we were making decisions for china through a u.s. lens sitting in seattle.
we had to have the confidence to give them autonomy there's an autonomous business here that is decentralized that's why we're successful. we're a global enterprise. china on its own merit will be a market that will rival the size of any market in the world for starbucks and contribute to shareholder value. i also think china is a market that will have tremendous impact around the world and we'll be one of the big winners in terms of our consumer brand, the halo on the brand also the way we approached it. very few companies are doing things we have done. giving healthcare to parents, housing allowance, equity in the form of stock options. the government of china is looking at starbucks saying you're doing all these things, help us to understand how we interpret this what is your position on the tax plan proposed by the senate and now the house and we'll see
where it ends up >> you and i have spoken about this before. i look at the reduction in corporate tax rate to either 20% or 22% i would just ask a question to the republican leaders, that is what insight and experience do they have or what evidence do they have that the reduction in taxes for all those corporations are going to result in either job creation, higher wages, or opportunity for their people to grow versus the amount of money that will go back to shareholders and corporate profits. show me the evidence one more thing then there's no doubt that every economist left and right, this is going to add at least a trillion and member $2 trillion to the debt. these are the same people over the last ten years who have been
yelling about reducing the debt and having fiscal responsibility what happened to that? >> that was starbucks chairman howard schultz david davis is inside the british parliament and said there is no overall impact assessment, just sectoral analysis leading into brexit negotiations he says major contingency planning operation is under way for a no deal brexit that follows the latest breakdown in talks between theresa may and jean-claude juncker. that's it for our show i'm willem marx. "worldwide exchange" is up next in the u.s can make all the difference. e it can provide what we call an unlock: a realization that
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a sea of red wall street pointing to a lower open following a selloff in asia we'll get you set up for what could be a volatile trading day ahead. thousands of people are forced from their homes as a massive wildfire tears through southern california. we have the latest on this developing story >> another breakout for bitcoin. the cryptocurrency hitting another new all-time high. it's wednesday, december 6, 2017 "worldwide exchange" begins right now. ♪