Skip to main content

tv   Squawk Box Europe  CNBC  November 2, 2016 4:00am-5:01am EDT

4:00 am
european session. we have been down for seven straight sessions here in europe and today's trend may not change. we're seeing red signals for these markets but we're now in a global risk aversion again as investors trade around the election. some suggesting donald trump is ahead of hillary clinton in those late polls. this is a very big change in dialogue along the latest fbi probe. adding to the mix fed.
4:01 am
the fed meeting today. investors are looking for any change in the statement suggesting they are acting and ready to fire with that next rate hike in december. a whole bunch of other elements into the mix. the reflation trend, equities are being impacted. the italian referendum later this year. so the stoxx 600 running half of a percent lower. you can see how negative is sentiment is. every sector the trading weaker. food and drink better end of the scale but banks tracking whacker by 1.25%. this is a sector that has grown very aggressively in the past few weeks on the trading window. investors are saying did we get it wrong in terms of not looking at this sector in recent times? the gains we saw in october very
4:02 am
strong. investors lightening up on risk. that's why the banking sector is one of the worst performers. autos another cyclical down by 1%. if you look at the gains in october that's a sector where you saw some activity. lightening up on the portfolio may mean these names. financials, trading weaker. home builders and reaction, travel and leisure is down .2. let's look at these individual indices and see what the early starting picture is. we've given you 6900 on the ftse. we trade down by half of a percent in the morning session. french market down three quarters of a percent.
4:03 am
german market fell heavily down 1.3%. 10,449 on the index. down .7. you can see the extent of the selling across the board. 1% down on the spanish market eclipsing what eve seen. let's get into earnings reaction. maersk group is down 8%. very choppy trade on this curve for this year. the numbers as we see the quarterly profit dragged down by 44%. this is the impact of weaker freight rates and oil prices. quarter net profit missed analysts estimates. they expect to report a
4:04 am
significant lower than last year. this is an interesting one because the business model was to try to almost demerge without selling off assets. i think it's distracted investors but the underlying numbers you can't miss. >> fascinating how a new ceo and a whole host of disgruntled shareholders are ripping up the template of the previous boss. we see it time and time again. so the man who created the current maersk that we see now and he said we'll have a three prong strategy. it was going to be ports, oil services and container shipping. these were going to be incredible complimentary activities. now the current management things they aren't complimentary activities. they need to just split from each other in order to attain maximum value. the problems as i thought was
4:05 am
outlined incredibly well is all those problems were there beforehand whether on the oil side, port side or on container side are still going to be there. just so people know how this business works the maersk line is 67% side of the company. the container side is absolutely enormous. now in terms of turning this business around the task is huge. it's enormous. one it's going to lead to pricing improving and less over capacity and two you were worried about getting your sony playstation or whatever you're playing these days, you're worried about christmas delivery. there's an interesting piece in
4:06 am
the "journal." this sums it up. the 20 largest container oper e operators or losing $8 to $10 billion this year. the other thing that was fantastic in this article is the freight weights, asia to europe trade route averaged $573 per container over the past 13 months. $573 per container. shipping executives say anything below $1400 is unsustainable. we're so far away from equity in this business i think it will be tough. >> all this noise -- >> let me come over and give you a big hug.
4:07 am
>> there are separate parts to confuse the investor and recognize some of the parts is absolutely nothing. >> no. come on. there is a real story in restructuring to release value, definitely. >> it's done nothing. it's come right back on. >> come on. change that chart. give me a one year chart and you can see, i think, in better perspective the spike to the end of the year that we've seen has been as a result of the company making an announcement about how it's seeking to release value by making disposals but restructuring the group to separate businesses that may not be complimentary at this point. we've all been through so many cycles where investors say come together, come together you want to be a big counglomerate.
4:08 am
no break apart. you have limited ability for growth you have to do something and restructuring is one way to change narrative. >> the one thing that was right was cycle. it's about the pricing cycle. we heard from maersk that prices may have bottomed. the japanese companies have merged. it's about the cycles. it affects the pricing environment. >> the point i'm making here is ceos can change little when it comes to growth dynamics. they can't really change the pricing. what they can do is restructure their base to release value for shareholders. what are you excited about in the markets? you can talk about maersk if you
4:09 am
want to or sends it off somewhere else. but on a day like today a lot of people are worried about the near term trend for the markets. what do you do? what are you looking at? where do you go? >> to comment on transport there's structural headwinds facing that industry not the least there is only so much outsourcing you do of supply chain. so there is capacity issue. and i think we do need to see some consolidation for pricing. but in terms of markets large there's some clear headwinds. you look to the fed, first of all, to see what they are going to do and they are going to make one interest rate hike between now and year end and as we move into next year they want to make one two. i don't think that's well into the market and investors need to take fright that the fed will do something. >> your own equity at this
4:10 am
point, in particular you like the u.s. equity story. why stay in play when you got pain in the bond market and there's risk. why not go to cash and preserve that cash and come out and fight another day if the markets pull back. >> that's an approach you can take. you can cash up a little bit of the margin. that can be a costly exercise. timing short term fluctuations is a challenge between most investors, i would argue. there is certainly political risk in the short term. the most likely outcome is the status quo outcome. the more concerning outcome perhaps a trump or definitely more concerning outcome is a trump victory. but it's got a pretty vocal growth agenda on his ticket so markets may well react to that after some short term selling. and beyond that we can still
4:11 am
look to tighter labor markets and so that would be supportive of aggregate demand. no shortage of challenges out there. i would be happy to discuss those at length. on balance equities seem a decent medium term. >> if you want to call it as a long term investor or trading as a short term trader what will be most sawed off. banks and banking resources moved aggressively in october. so anything that gained in october you need to revisit and look at booking that profit. is that the right strategy? >> value is cheaper now. if you're tactical you do what chief said you s geoff said you sit back and watch. if you're fully invested stay
4:12 am
invested. if not and you have marginal money why bother. >> a lot of investors were looking at banks in the month of october. so you saw a aggressive move in a short space of time. >> no one owns the banks. >> people were trading in october. >> that's the trend for the year. value was cheap a year ago. most recently banks are not under owned. there's an expect jays interest rates go up. that's good for net margins and good for banks. bond yields are selling off. it doesn't work for either. the environment is better if to your point there's an inflation trading. >> banks were put into that trading element. there's certainly a tail wind from net interest margins on this high yield curve, but how far can that run in a very
4:13 am
indebted global economy we're in and also banks have no shortage of regulatory litigation challenges that face them. taking on medium term perspective we would jieb bande banks as uninspiring. let's look at some of the green on the markets. one that stands out is a company that's been reporting this morning right at the top of the stoxx 600, smurfit kappa. it's trading up 3%. there's a 13% increase in
4:14 am
pre-tax profit. they said based on current conditions it expects to deliver record core profit for the full year, but the ceo told us brexit could have a negative impact. >> think about the uk, brexit is going to be an issue for us as we look forward. right now we're not seeing any particular demand issues. when we look at our irish business when we export from ireland to uk it will affect us unless we get price increases. i think, you know, it has some degree of psychology effect. >> brexit has caused a few nerves across the home building market. you saw fairly sharp drop after the brexit vote a slight recovery and coming off a little bit in the move october despite the rest of the markets tracking. the picture is double digit negative but modest improvement
4:15 am
for persimmon. the ceo told this program there's still strong demand for housing across the uk despite the eu refer rern dum. to the luxury space hugo boss is forecasted with a smaller der cline in profit as aggressive cost cuts are set to decline in sales. the german "fashion house" remain its outlook for 2016 but said market conditions remain tough especially in markets of europe. china was a bright spot but lacked sales increasing and breaking negative trend. the stock is down 21% year-to-date, enough so management is looking at a strategy to hone in on men's wear specifically and to do away with this very wide luxury model
4:16 am
you see across the sector where companies sell everything in every category. so honing of the strategy is what you'll see from hugo boss. we have to wait for another 12 months to two years. security company g4s posted double digit earnings growth for the first nine months of 2016 on top of a 5.7% rise in revenue. their new contract value stood at 2 billion pounds. it remains on track to reduce its debt. the stock is up about 3.5% year-to-date. and next an early glimpse, it's bouncing 2%. the uk retailer has reported sales of marked down goods are
4:17 am
outstripping for price offerings. revenues fell over the quarter. but next maintained its outlook. the mark downs concern me. >> i agree. i'm with you. i don't think you and i will have a dispute. we have tossed around on this story a long time. next is in a bad place at the moment. i think you're absolutely spot on when you draw the attention. this is about discounting because discounting now is terrifying because the company will be discounting at some point very aggressively in december and january because that's how it goes pup see these
4:18 am
massive sales from the likes of next, marks, you name it. how long can they hold it against the consumer whether it's pre-christmas aggressive sale, make to it boxing day or new year. same staring down. they will be talking about aggressive mark down prices this early on just in november i agree. that's an issue. take a look euro/dollar longer term chart. they've had an amazing move. they've come off from that 81 pounds higher, 11 months ago. 81 pounds they have been trading at. now trading at 47 pounds. the low came on the brexit move of 35.50. it's a very difficult stock to hang your hat on and say there's value there now. i say that despite the fact they are value compared with the
4:19 am
sector. they are trading seven times forward. the trade is moving on this one. it's based on the fact if you look at the window, you saw a little bit of an improvement in the move october. to your point, if you look at august sales, september down 5%. october there's a little bit of seasonality around that month. i would be cautious going out to november and december and saying there will be an improvement based on that october figure. people held off in the summer months because of the weather. they got back in the stores in october. i don't think it will hold. you're right. you'll see more discounting around thele holidays. >> one saving grace. geoff our going out to the bank of england tomorrow. but the fact of the matter is we
4:20 am
check the weather. >> pretty cold. >> we were in the car together. >> i'm comfortable with it if you are. >> we share the driving. i'll live with it. the point is it was cold. if we get a cold snap people will go out and buy the woolies and coats. >> there's a structural change. it's significant for the buying demographic. the millennials are that buying element and they are going and shopping differently. he's still got his growth on the internet site. we've done the same thing as japanese did. you got lot more choice as well even if you're going online, that's problem. >> invest securities has a negative view.
4:21 am
target price to 4,500. their rate cigarette a sell. >> clearly one of the challenges is this margin pressure. but the cost of goods sold. it's talking about finding different parts of the globe to source its product, but, you know, the weakness of sterling is a clear challenge for margins. there's this discount ago round christmas but i don't think they are committed to a discounting strategy. i think they want to pass on those costs to consumers. they are talking about expansion of floor space. quite a risky strategy i would argue given the consumer challenges. >> just to refocus on the macro spanish manufacturing pmi is highest since april. the manufacturing new orders up to 53.7, highest since april.
4:22 am
the ibex is still down in spain. just to come back to this. lord wilson has taken refuge in the macro story sort of manage expectations and he says this morning the macro economic backdropoff for next year doesn't look exciting and the consumer environment for next year will remain difficult. will it be difficult for everybody or just difficult for the retailers given what we said around the desk here about some of the shifting trends in behavior? >> certainly difficult for the retailers. the margins are under pressure. hiring expectations are wobbly. we're seeing inflation coming through. so in that regard not a great environment to be passing on those, that increased costs and therefore margins look under pressure. >> having said all of that, uk
4:23 am
earnings -- uk salaries are rising. salaries in the u.s. are rising. maybe not driving core inflation trends yet to the point central banks are taking much notice but it's interesting that household robustness has improved since the financial crisis and we've seen some strength and savings rise but people are not going out and spending at this stage. the trend has been higher particularly. >> yes. you are still, disposable income is going a lot higher in uk and moved back again. >> consumer spending this year is a reason for struggle. up 6% in volume terms. pricing is the challenge. consumer spend cigarette robust.
4:24 am
just not willing to pay. that's a problem for retailers. >> it's a pricing issue. >> as much as anything else. >> consumer in the uk has been very strong. massively strong. without they are spending differently. millennials spend differently. it's online. travel. leisure. not clothing. that's one of the conundrums. airplane s have fault. holidays. that's where the spending pattern was. you can't use a macro head when others are struggling. there's a fundamental shift going on. >> there's this changing of wanting experience over material goods. we've been surprised by the strength of the consumer post referendum. that could be weather related or perhaps an over pessimism about the consumer react. the consumer can only stay
4:25 am
strong if inflation challenges don't become great and hiring and labor markets remain firm. those are called into question given the political environment the uk finds itself. in the u.s. the consumer looks much morrow bust. >> that's a bit -- where is the evidence for brexit destroying the labor outlook into 2017 at this point? >> there's hiring intentions coming under pressure and there's also construction pmis which is longer term investment decisions made by businesses which is a big component ever labor market strength. they are below market pre-brexit numbers. there's a lot to be decided on the political framework. we're learning from the government immigration policy has to change and that suggests
4:26 am
we're coming out to the single market which isn't necessarily -- isn't a positive backdrop for direct investment which again is a challenge for labor markets. i can understand why consumer confidence may unravel a bit from here. >> full time workers received 2.2% increase. part time workers enjoyed 6.6% kbro great. a lot of trends are positive for tuck at the moment. >> this is backward looking data and i don't, i don't discount this is good news. i think we have to be cognizant of the risk that the labor market isn't -- that the ingredients for healthy labor market aren't all in place going into 2017. not the least surrounding the political disturbances we're
4:27 am
likely to encounter. >> ben thank you for coming in and helping us out. from south africa this is about corruption. the south african president has withdrawn an application to delay a report. according to the president's authority. so zuma not standing in the way trying to delay the release of the report. it's about allegations of the political influence. there's a fight between the finance minister and president that's been rocking markets. you can see the trade in rand -- take a longer term view and you see an impact on the rand. >> i had some friends staying over in south africa. we were talk about this issue. and they were saying this is the tip of the iceberg. not making allegations against
4:28 am
anyone. they are saying there's all kinds of issues surrounding other avenues not just the family that continue to plague the government for a long time. that's the feeling on the ground in south africa. >> the finance minister and the president who is still in control. >> there's much wider ramifications for the broader government and the way business is done at the government level. >> did you drop south african wine. >> maybe. >> we'll take a break. stay with us. we'll find out more about steve's house guests and should companies capitalize encore or stay bigger to be better. we'll get into that when we come back.
4:29 am
4:30 am
dispute. european stocks compounding the global selloff with banks across the continent leading declines. investors bailing out of risk assets in the run up to the fed meeting and narrowing election polls. donald trump make an unprecedented call for clinton voters by cancelling their ballots submitting new ones to sfloirmt. the republican candidate around two points behind his democratic rival. not ship shape. shares in maersk after profits missed forecast. guidance is subject to
4:31 am
considerable uncertainty. and a cut above the rest. hugo boss beats the downward trend as german house beats forecasts. stocks are sliding here in europe. not a selloff that's even across these regions. the ibex, as you're seeing across the board ratings splashing across. stoxx 600 is down by .6 of a percent. all sectors were selling off but some bigger declines than others. particularly ones bought in the move october. the banking sector i referenced. we have risk off the globe
4:32 am
currently on the back of election concerns as polls get closer. fed meeting today and all chances that it could flag up the december rate hike not to mention political risk around the italian referendum. the individual sectors remain a bit under pressure. down 1.3%. trimming some loss but down .9 of a percent. health care tracking a little bit firmer on trading session. you'll notice some of the more safe-havens in terms of sector seeing less of a sector. food aend beverage and health care. hugo boss on the back of its numbers seeing a spike of 6.9%. easyjet had some decent numbers. standard chartered under a little bit of pressure on the
4:33 am
back of its numbers. wolters kluwer r-slim 2%. not enough to support the stock. and moller-maersk trying to recognize some of the parts. oil business which is no longer diversified for it as long as the main shipping business of the firm is down 6.9% today. so shares in yum china running on their first dave u.s. trade after the spinoff from its parent company but faces a
4:34 am
series of challenges. >> reporter: curry rice bowls and wraps made with peking duck. not the menu of a chinese restaurant but a kfc in china. for decades yum brand, the company behind kfc tailored its menu to chinese. make this market the biggest outside of the u.s. but in recent years yum has struggled to lure in diners. food safety scandals and a surge in anti-u.s. sentiment have depressed yum sales and profits. the issues says this american restauranteu rx fc and pizza hut is a place to be to just another place. >> consumers are look at kfc as a quick meal and from a convenience standpoint it's not aspirational.
4:35 am
>> reporter: yum is experimenting new menu items and improving the dining experience. yum is reaching out to those up and coming consumers with pizza hut. in china pizza hut is going more upscale. the company is renovating the restaurants to give them a sophisticated look and feel. still yum faces fierce competition from global chains like mcdonald's and local players too. the smartphone revolution in china cities have given diners an endless menu of option with the click of an app. >> kfc got into delivery and used to be the only game in town. now, with these apps it basically brings to the home any restaurant in the market. at any price range. there's now hyper competition and so anyone, any one restaurant can compete with the big boys. >> reporter: turning up the heat
4:36 am
on yum. >> $32 billion between gm and baker hughes has put a spinoff to consumers. it reached $176 billion according to goldman sachs. look. ironically the boss of the new ge baker-hughes combine, i was speaking to him about the problems that oil was having as a drag on the broader conglomerate. this is a response to that. the baker-hughes, ge tie up they do all kinds of stuff that they don't expect. it seems like it's a lesser solution and a logical one. >> seems to be working out that
4:37 am
way. when it was just checking the share prices baker-hughes is up from where it was pre -- the whole market is down. you had a red dress on the red wall. on this particular one they are up a bit from where they had been which is actually quite nice and ge is more flat. that is quite something. what really kind of shows from these and something about these kind of spin off deals it can be a win-win, and from that perspective it wasn't surprising that on the day both share prices went up. lots of synergies and more synergies that that business can get out of ge with baker-hughes than it can get with ge. ge can make argument it has synergy issues, tax incentives they can do. they can't get the operational synergies that baker-hughes can do.
4:38 am
>> another interesting point, you said viewers didn't know and i didn't know. senior management hired performance stock incentives these kind of deals can work better? >> i don't want to always bore you here on the show with academic studies. >> that's what i'm here for. >> but there is some very compelling academic research that shows this is an example of governance work. that when senior executives and by that of course i mean those in the suite, have their incentives higher aligned with performance they are more likely to do spinoffs like this that will, in fact, add value to the shareholders of the company that they are working in. interesting, more so than if they sell off the company. so doing a spinoff like this is, in fact, more aligned with
4:39 am
shareholders. >> ge has 67% of the combined company. >> exactly. >> so it's still very much invested in this business. >> we've seen spinoffs and some have performed quite nicely. the one that interests to me is maersk's report. is there a difference between carving up a company and then spinning off certain assets versus carving up the company and keeping those assets. in maersk's case i wonder why we're not seeing a stronger bounce because they are holding on to the oil division. >> remember that now it's more of a pure play. there will be others who can invest in that as well. it's not mixed in with the conglomerate that ge is and baker-hughes is a subsidiary or whatever the new name is that's affiliated with ge is much more aligned to that one particular
4:40 am
business. i think that 67% -- 62 i thought it was 62 also. anyway never, never doubt the people who are actually sitting here next to me right now. but that should perform better for the shareholders than actually as part of that conglomerate. >> there's a different between conglomerate investors and nonconglomerate. alcoa has torn the business into two separate parts. they are fully committed to recognizing the conglomerate structure doesn't work. eventually if we need to sell off one of these businesses we can do so. the minute we keep it together but not really together the commitment is different. >> when you don't have that commitment and have ceos willing to come in, say what the strategy will be it gives the market the ability to make a
4:41 am
play on that. right now with maersk we're seeing that hesitation and foot in both camps is affecting the share price. again on academic research we see and not to bore with you that, the details on that, but ceos who do come in to their jobs and actually this is easier to look at when you have a new ceo -- when a new ceo comes with a strategy that s-in fact, very clear to the marketplace they do perform the share price of those companies performs much better than those saying let's wait. >> there's challenges. there's an element in this too. my side of the fence very happy to come in here's the kitchen sink. brand new thing. ge short duration, long duration, businesses combine into one entity, not fashionable. not that they are bad structures. the market has no interest. >> there's that conglomerate
4:42 am
discount that's out there and the market would much rather prefer the big plays as well as the activist investors. >> let me ask you about deals that failed because there's been a lot of deals that gone wrong. some big ones, pfizer, honeywell -- there's over 400, nearly $500 billion of deals withdrawn, actually. is that a result of the fact that the banking system is not healed, or is there something else going on that explains why we've seen some deal failure? >> deal failure, i guess we need to look at -- a lot had competition issues. where there have been over confident perhaps ceos together with their advisors they could get this past the competition authorities.
4:43 am
so a lot of deals are being pulled because of -- not pulled not basically getting through the competition side on things. the other side is we're seeing these companies right now because we do have low rates that isn't expected to continue forever, according to most, and, you know, now is the time to pull the trigger on some of these deals that you might have with that financing. when that financing doesn't come around then you do see some problems and some of the deals we've announced will require some significant financing and let's hope that financing is there. at the moment it looks like the banks are very willing to make the loans. >> we have to wrap it up. thank you very much for coming in. mood chy's sovereign rating will be downgraded. a downgrade for tuck.
4:44 am
it will be weaker than otherwise have been. the scale of impact of brexit growth depends on new trading relationship, current baseline expectations uk will manage to enter into some form of free trade agreement with eu. uk banks the loss of passporting rights that operate across jurisdictions would be credit negative but manageable. from the ratings agency? >> degree of honesty. >> or stating the obvious. there won't be much of an impact to the single market. they want a hard brexit. that's the message all along. >> they feel they do need access
4:45 am
and would be hamstrung. >> wonderful to be a politician. at the moment it's more heat than light. moody's aedes dds to that. does anybody rush out and sell their gilts. let's look at the italian pmi numbers. factory slows marginally misses the forecasts on the pmi, manufacturing pmi, virtually stable at 50.9. the forecast was for 51.4. the september number was 51. little bit of easing. october pmi falls to 50.4 versus 50.5 in september. quick update on the data. what are we going to do now?
4:46 am
should we take a break. >> let me tell you what's coming up. house prices. we'll find out more after the break. let's leaf you a look at how the european banking stocks are trading. as we're seeing the sector is one of the worst performers. the selling 1.8% off some uk names. we'll be right back after this. second we're born. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen.
4:47 am
4:48 am
netflix has launched a drama in uk based around the life of queen elizabeth. the 100 million pound production called the crown premiered in london last night. we caught up with the head of netd flicks netflix ahead of the release. >> more and more available. as we launched more territories recently we launched -- we're in 191 countries and they have different levels of broadband speed and wi-fi access. in those countries they have adapted their behaviors to be more of a downloading culture. in those emerging territories it's more interesting. for the developed world, our thesis has been true but i think as we get into more and more
4:49 am
undeveloped world and developing countries we want them to find more opportunities for hem to use netflix easily. what did you make of the conversation of netflix and what is this whole conversation about offline streaming? >> it can be an important strategy for netflix as it looks to expand into new areas. this is a feature that's most likely to come to emerging markets, new economies where many broadband speeds aren't as vast, and it could help drive adoption of this in new markets. this is important. investors are crying out for user growth and international is where they will find that from. >> let's put it on a round piece of plastic and post it out to people and that way we can deliver a guaranteed full movie without downloading problems. isn't that what we used to have >> that takes time. other people are going to this
4:50 am
space like facebook. >> we are seeing, you know, the growth of smartphones in these markets, you know, very, very quickly, very advanced with the capabilities to stream this kind of content but the internet infrastructure isn't keeping up. that's coming. netflix has opened that in the short term. it will help drive that adoption in markets like where they are making pushes to make local content. in korea and europe and countries like germany and france where they are investing in local content. the point is this, does netflix deserve its dot-com premium given increasingly it's looking like an old-fashioned movie delivery service? if they are now talking about, you know, you're not getting it live streaming you have to download it first and watch it later, isn't that going back to
4:51 am
the beginning of the alphabet? >> not necessarily. their streaming service, when we were in the underground we want to watch things. that's a nice option. you talked about the preview. i did for a fact he does this all the time with the free service. all the time. >> well with the bbc. >> you get a product. >> you're watching drama. >> netflix is not just about its own content. >> to jeff's point of all the horses in the apocalypse it's been hitched there for price growth. >> if you're netflix you have to do it. it's part and parcel. it's a premium product. you have to pay more. >> we talked about the valuation and what that's predicated on is netflix is one of the only
4:52 am
players in the market in this space that can get global content distributed every where. attractive to content makers and happy to invest in that because according to the ceo this in the long run will help us keep costs down because we have our own content we don't have to pay expensive licensing deals. that's what this story is based on. >> not a lot of the content is very new when you go on to netflix. right? that's the problem here. if you look at these services they have a lot of back catalog that you've watched over and over again. so they are doing the smart thing i think in creating new content. the trouble is if you stack up the valuation of content company against a dot-com company they look very, very different here which is why the at&t-time warner deal is so interesting because it hints at the market reoperationing content. but i'm not sure -- you say it should, peter.
4:53 am
>> premium content. >> current content. the back book is there. there's so many channels. on here i have my videos. i paid 12 pound. i pay wherever i go. it suited me because it was on here. >> you can actually download -- >> i think we'll wrap it up. final word? >> i would love off line watching this stuff on the tube would being a great. >> french october manufacturing pmi number, the figure 51.3. that is the french october manufacturing pmi. forecast at 21.3, came in at 51.8. highest in october.
4:54 am
v viva la france. >> europe's stoxx volatility rise. euro stocks is highest ever since july. this follows the vix went to 20.43 which is the highest we've seen. volatility indicates picking up a little bit. whether that's because of the election or higher risk in the markets i'll leave that one with you as well. peter we talked about epox. do you think we're on the verge of where people invest or carry on in the valuation story. >> the latter. you dance around -- you go
4:55 am
through these periods of banking outperform. bond market is still, unfortunately, in charge. someone else is a buyer. no price discovery. challenging. watch. it will be a little bit weaker by the election. the election will to stay a lot of things i suspect. >> we're on the verge of getting some pmi numbers. interesting we got some new car sale out of germany. i'll mention those as we wait on the pmi number. new car sales fell around 4.5 to 5% in october. in terms of the pmi and jobs numbers here, october manufacturing pmi 55.0, the flash was 55.1. >> vacancies in germany rose to 691,000. highest level on record. >> that's deutsche land. viva deutsche land.
4:56 am
>> fully employed. peter a real pleasure. thanks for coming in. that's it for "squawk box". we'll be back to do it all over again.
4:57 am
4:58 am
4:59 am
5:00 am
. good morning. a world of worry. nervousness about the u.s. presidential election and fed. a developing story. microsoft says hackers linked to the russian military have exploited a windows flaw, the latest on that straight ahead. plus chicago stays alive, the cubs top the indians to force a deciding world series game seven. it's wednesday, november 2nd, 2016 and "worldwide exchange" begins right now. ♪


info Stream Only

Uploaded by TV Archive on