tv Street Signs CNBC May 15, 2017 4:00am-5:01am EDT
♪ welcome to "street signs." i'm carolin roth. and these are your head lions. cyber security firms across europe unprecedented brief and over 200,000 computers in 150 countries. european equity starts the week at a new high. ftse 100 and the france cac hit record levels. and cuts into large deals saying
it will do whatever it takings to rebalance the markets. investors with the german product says it will conduct talks to find a new major shareholder. shares in british cyber security firms so far have hit record levels while cyber security ise is trading higher. this follows friday's seiber attack which crippled more than 200,000 computers in 150 countries. security officials are scrambling to find out who is behind it. and hospitals and businesses and it's believed to have been stolen from the u.s.' national security agency. speaking on sunday, saying the devastation of the virus is unprecedented. >> we're running over 200 operations.
we've seen it becoming the prince of the cyber attack but this is something we haven't seen before. the global reach is unprecedented. >> how many countries now? >> the latest account is over 200,000 victims in at least 150 countries. >> last week on "street signs," the president one of the world's largest security firms spoke to me about hacking saying they're not putting systems in place to prevent attacks to react. >> problem with government, they don't see the same level of protection that it provides that they do on physical attacks. think about the attacks around the region, and there's limitation on police. but today, the government doesn't have any cybersoldiers. >> so you're saying the governments now a das are willfully unprepped when it comes to cyber attacks.
>> cyberis underground attack. it's unknown. and physical confrontation. the government is visiting more of a cyber security philosophy. that needs to go to a much more practical create their own system that can actually block things when they happen. >> we're now janed by james smith, and they're joining me alongside. gentlemen, thank you for joining us. michel. and james, let me kick things off with you. could this have been prevented do you think? >> i think it's inevitable, as we integrate our lives more with technology we're going to see more of this kind of thing. i think there's a lot more businesses could have done but that's quite challenging when you have 10,000 computers across a big enterprise so, yeah, tricky. >> the other james.
>> yes, i think the point about patching is really down. so if companies start to date with the latest software, they're using a 15-year-old operating system that no longer supports that due to lack of funding. >> is it mainly the lack of funding or the real thing, the lack of understanding of what the real threats are now a days? >> i think events like this will make it much more clear how real the cyber attack is. but i think, a good example of not being enough resources to commit to it. >> have you got any sense at the moment whether we've seen any impact that could use data, for example? or whether there's a real risk of data leaking out anywhere? >> well, as we're about to see it expire for the inscription,
they leaked some and they leaked access to that data and that will affect businesses, so, in that sense, we are. >> and bitcoin, this is something people talk about bitcoin, as this very anonymous currency. but of course, you guys are trying to track this and source it to criminals. you have made any progress in this particular case at the moment? can you give us any details about what you're seeing? >> in this case, the firms have not yet met. so they the fact that -- in previous cases with law enforcement to see where the funds are because ultimately, they'll have to turn it back into a currency. >> james, on that very point, is it unusual for hackers to demand bitcoin as their ransom? does it point to you who the
hackers will could potentially be? >> it's pretty normal for ransom to demand bitcoin. and bitcoin is at the moment the currency of the.gov. and it has a reputation of being anonymous. >> and i guess this case a lot about the viability and credibility of using bitcoins because it really is, as you say, the currency of the dark web. and many illegal institutions, isn't it? >> it is. it's also used for legal things on the web, generally but bitcoin is fundamentally new to the world. it's a currency that is innately difficult. >> attribution of cyber attacks are quite difficult things. james, in your investigation so far, you have seen any idea?
>> we certainly know they're criminals, that's for sure. we know this follows a pattern of previous criminal behavior. as for the exact whereabouts, that work is going on across the world. >> james, do you think this could be a turning point for a major operating site when it comes to hospitals, the public utilities? and basically consumers who may be working with computers that are too outdated and operating systems that are 15 years old. could this be a boost to the security sector to many of the software company scombies? >> it's a great opportunity. it's a great way to remind people to keep their software up to date. >> you use the wake-up call, this was also a term used by the microsoft president who raised a very important point, james. he said that basically
government intelligence should maybe open up the software flaws of, in this example, we saw happening with the nsa data, with the nsa leak. maybe they should open them up to the public so next time we're better prepared. what do you think? >> yeah. because the government sees this as a weapon that they own, which is fine, until it was handed out, essentially stolen and sold online. so it's a balancing act, that generally when we have this, they give the company a chance -- give them a chance to pattern in advance. it was hacked a few months ago and it's really been a failure of companies to update their software since. >> and given the nsa, it set us
up for further attacks of this kind using intelligence? >> as governments all over the world, best as we can see, have weaknesses in computer systems, they're going to continue to see organizations exploit things. in this case, the weaknesses remain public, which is why this has really happened. we've not seen the publication of these exploits being used in this way before. i suspect we'll see many more of those to come. >> is there was some talk that the fallout would be even worse today. people are back at their desks today, opening their computers for a first time. have we seen any evidence that it's exacerbated today, james? >> we've seen a number of payments go out today -- >> the bitcoin -- >> the bitcoin payments. we've seen it made. but we'll see a bigger increase.
i think, really, this is a wake-up call in that companies need to know this won't be the last one. and it's not just about pattern, it's about being ready and accepting your defense's willpower. make sure you have a defense in place. >> part of the problem with this ransom ware, the 22-year-old surfer, i believe it was a surfer lastly stopped it in its tracks. he said it's possible this could see a mutation. a continued mutation. maybe there's just one form of ransom ware, what do you think? >> yes, the kill switch is what the researcher found. i think we're likely to see a version of it propagating. actually, just this whole -- as we've seen in other ransom ware attacks, the modus operandi of other criminals that we'll see
more often. >> thanks so much for that. james smith and james chappelle. we want to thank you here at cnbc. streetsigns cnbc. and still coming up on the show. a teutonic shift. from angela merkel winning a key emrelection in germany's larges state. we'll be back in two. finding time to get things done isn't easy.
but we've got the digital tools to help. now with xfinity's my account, you can figure things out easily, so you won't even have to call us. change your wifi password to something you can actually remember, instantly. add that premium channel, and watch the show everyone's talking about, tonight. and the bill you need to pay? do it in seconds. because we should fit into your life, not the other way around. go to xfinity.com/myaccount good morning. welcome back. you're still watching "street signs." let's show what you the european markets are doing this morning. the stoxx 600 is flat as a pancake.
we're just inching higher by just a fraction here. oil is once again the big story in the markets given the agreement between russia and saudi arabia to extend the output out past june. and the xetra 100 up by 1.1%. keep in mind, the two inda see, the dax and ftse 100 have hit another record high. cac 40 slightly under water. let's talk about the sectors one by one. what you'll see, oil and gas are the outperformers given the moves i just talked about. basic resources capitaling on that sentiment up by 1.25%. keep in mind, there are a couple of stockings out there, such as b
bayer and bass. and the chemicals, up 2.of 6%. and brent rucrude up by 2.56%. >> let's talk politics, angela merkel continued to build momentum. a key defeated democrat on sunday. 1 in 5 german voters live in north rhine westphalia which has been a stronghold for the party. that is indicative and widely prescribed as a political earthquake for the democrats. what went wrong in that region? >> reporter: actually, what happened in the north ryan westphalia, they're explaining pour housing, poor schooling, poor infrastructure. and a higher crime rate than in
other countries. so all in all, the legacy of the last government here, or the government that's still in place, of course, was not the greatest. and that is why the cdu won here by a surprising actually, the margin that you are seeing. it was a very close call in the end, but the spd is the strongest party here in the state and it's really changed for them now. there's no short effect, we have not seen that in the last three elections here that we have witnessed this year in germany and other federal states. so we can apparently say that it's not really a bonus for the spd currently. yesterday evening, the candidate of the social democrats admitted that he's selecting on content and that they now have to deliver. and explain to voters what they
want to make different in that country, not only saying it should be a fairer country. angela merkel at the same time got a boost from winning three federal state elections in a row. and that is also reflective in recent polls when we are looking into the general elections in september. yesterday evening, i caught up here with the cdu vice chairman here in north ryan west failia and asked him what made him win the election? >> we have a personal concept for westphalia state. we have security and we need
more police to secure the security of the people. but we want as well to be a country of integration. we say, yes, we want migrants, they are part of our society. but those who are against our law, they should -- they should feel an answer because we don't accept violence, zero scholar vens our concept. >> did angela merkel help you? >> yes, she complained very helpfully for us. and the federal government in north ryan westphalia will work closer together. >> reporter: i think the race is now on. angela merkel and the cdu know
that the they're very vulnerable. and they're reinstating that they have the chancellor, and they're also working on a program. it's called germany 2020 to keep the competitiveness and the international success of germany intact. that's the cdu's program. the spd is now focusing on a appropriately itself, admitting he's lacking on content and that they will deliver. so, we'll see. officially, the election campaign for both parties only starts in july, but i'm sure the heat is on here in germany. for that back to you. >> thank you so much. given the details from that state himself. today, meantime, marks the first whole day of president macron's five-year term after he was sworn into office on saturday. he wants to put france's
standing on the world stage. >> translator: today, ladies and gentlemen, the time has come for france to rise up to the occasion. the vision must be overcome regardless of what the issues are, economic, social, political, ethical. because the world expects us to be strong, solid. france's mission in the world is pressing. we will take up all of our responsibilities to deliver. every time it's needed. a relevant response to a big contemporary crisis. >> and claire has more from paris on the story. claire, it seems like a very busy first day at the office for emmanuel macron, he's going to travel to berlin to meet angela merkel. let's come back to the prime minister. who is the top contender, do you think? >> reporter: well, there's a lot of expectations, it should be known who is the prime minister before the end of this morning.
the talk is about a not very famous, not very known by the french people. he used to be a spokesperson during the primary campaign on the rise. he is an mp and mayor. so why would emanmanuel macron pick someone from another party? it's to grow the political spectrum, as he said, he will be a president nearer from the right than from the left. he wants to show that not only can he reach to the socialist party but also the right wing party. it's guidely expected that this 46-year-old mp will be picked as prime minister. then his job will be to implement the reforms. liberal reforms wanted by macron in order to reduce the unemployment rate and invigorate the french economy. and it's also expected the prime
minister in the campaign, he will be able to reach out to the right wing and have a political majority in the parliament which is a big -- which is crucial for him, if he wants to implement his reform. and then his first foreign trip is for germany. angela merkel, he had the support of the left and the right wing in germany, during his campaign. and it is obviously very important for him to stress on the relationship with germany. as you know, emmanuel macron wants a stronger europe with a common finance minister. i'm not sure that angela merkel sees it that way. interesting to see what they talk about when they meet later this afternoon. carolyn. >> i agree with that. let's get back to the pick of the prime minister, to be honest, i'm quite surprised at the new name that just popped up over the weekend.
i thought it was someone like -- or christine lagarde who would be a top contend. it's pretty clear he may have to remove his pick for the prime minister if he doesn't get a majority in parliament, right? because it's essentially the national assembly which makes the fine pick, am i right? >> reporter: definitely. definitely. what happens is, when the president doesn't get the majority, it is the person that is zdesignated by the new majority. we call that cohabitation. as a prime minister, for example, that's a scenario pretty likely for emmanuel macron, with his right wing. >> claire, thank you so much. let's continue to talk about see elections here in the uk.
the uk's governing conservative party has an 18-point lead over jeremy corbin's select party ahead to june 8th. the research shows that health care provisions has overtaken brexit as the most important election issue for british voters. all right. we're going to go for a quick break. do check out our blog which runs throughout the european trading day. we'll be back in two.
welcome to "street signs." i'm carolin roth. and these are your headlines. cyber security firms across europe and asia make gains after an unprecedented breach that ransomwares targeted over 200,000 computers in 150 countries. the ftse 100 of london and the dax of frankfurt hit record highs. and saudi arabia and russia agree to extend oil output cuts to march of next year saying it will take whatever it takes to rebalance markets. and investors of kand s
shares after talks for a new major shareholder. once again, good morning, everyone. it is monday. let's have a quick look at how your futures are shaping up this morning. looking pretty positive. the the s&p up biff 5 points, dow jones, up, and nasdaq up. retailers once again were hit very, very hard. jcpenney and macy's down after poor earning with the dow off of 22 points for the close for the week. the dow actually in almost a month. let's look at the markets. the cac 40, france off by 2%. and xetra dax. and by and large, we're trading close to 21-month highs and oil prices are very supportist of the slight rally we're seeing
this morning. post this agreement between saudi arabia to extend the output cuts. let's take a look at the markets. what you're seeing the euro dollar, 1.0946. up by 1.2%. and and the dollar hit overnight, given the north korea missile launch and the ransomware attack. but now the dollar has cut back a little bit. and the day after emmanuel macron's election win, from bank of america merrill lynch argued that flows have the potential to increase further in coming months. european investment banks also reporting strong first quarter results despite ongoing weak innocence that theft income.
according to a report from moody's the sector remains sound, and we now have lori mayers, associate manager and director of moody's around the desk. let's talk about the first quarter. i spent a lot of time talking ubs and the numbers and being very bullish. we see this, given seasonality, how much of the strength was se seasonality and how much is strength? >> well, we do expect that the markets will remain volatile. so we're not saying that one quarter necessarily makes a trend. but it was a good quarter for the european investment of funds and the market revenues with the exception of barclays. but really, what we saw was that capital markets revenues pulled the revenues for the quarter.
because as revenues overall were relatively flat. and that's really reflecting, you know, weaker results in some of the noncapital markets where low interest rates continue. >> much of 2016, i feel like we talked about the fact that u.s. banks were gaining markets here at the expense of the european rivals. do you feel with that strong first quarter, european investors are able to claim back the risk markets here or is it too early? >> i think it's too soon to say. it's definitely the case that a number of european banks are still going through multiyear restructuring programs which we're starting to see some of the benefits of some of those capital market results but also reduced costs. so, they're a bit more inwardly
focused, i think, someone some of the u.s. peers. the u.s. peers in the capital markets have stronger quarterly results. so i think it may take a few more years for to us see, you know, how it all turns out. >> some of the key news flow in the first quarter was there much of building capital with deutsche bank and credit suisse. >> over the last few year, the solvency has been improved. for some, you know, to put more dramatic shifts and, others, very gradually, just accruing
capital quarter by quarter. and i think now with the aggregate, or you know, add in of about 13.3 for the european investment bank, that's a pretty solid capital level. but we have to deep in mind that some of these banks still are facing large litigation settlements and they're holding capital in expectation of potentially having to take additional provisions. so, we do expect the overall level to probably come down slightly from where they are now. >> litigation is one thing. and the other one is tougher regulations. and it doesn't get tougher than this but let's talk about it, i know this has been delayed. i know the details are very much clear. they don't seem to be worried about this. should they be worried about what's to come? >> well, i think what's
happened, and i think this is interesting, i'd say when you talked to the banks six months ago or eight months ago, they were building some significant risk-related inflation. and that was really in relation to the impact of fundamental trading and other related changes. but because there has not been agreement on these changes, as well as what the implementation conference will be. it's very likely that implementation will be pushed back by three years. as a result of that, in terms of three-year capital plans, this factor is left out. so, i think they're thinking more about accruing capital to be able to mitigate it. as opposed to having to reduce it in the shorter term which was what the thinking was six or eight months ago. >> finally, let's talk about
political risk. it seems after the first round of the french election, a ewing pat of the political risk has been priced out the european banking sector, and obviously, the banks are quite happy about this. what feeling do you have that it's not going to shift back after the italian elections? >> well, what moody's feels there's a level of uncertainty in europe. we have a number of important elections coming up this year. so, we do expect continuing volatility. so, we have to take these sort of case by case, as they come along, on the banks, and also holding certain levels of liquidity which is sometimes an indication of, you know, trying to -- you know, prepare or withstand periods of uncertainty. so, i don't think we're out of the woods yet. >> not out of the woods yet. lori mayers, associate director
at moody's. k plus s is holding talks with a major investor. a ceo told a german newspaper that the firm was looking outside of the sector saying bass is not in the running. meantime, rwe beat estimates. earnings fell 6.5% for the year. it midon sales but confirmed its outlook for the rest of the year. meanwhile, tui reports a loss in the second quarter this compared to a loss of 226 million euros. europe's largest pool operator calls it a challenging environment. and we'll be specking to the tui
ceo. and bilfinger reports a loss. and expects it to improve over the course of 2017. president donald trump has continued to deny that his campaign had anything to do with russian involvement in the 2016 election but a new nbc poll shows most americans want a special prosecutor to investigate. nbc's jennifer johnson has more from washington. >> reporter: more denials from president trump that his campaign had any dealings with russia during the election. in an interview saturday night in fox's just justice with janine." . after trump fired james comey, in a new nbc news/"wall street
journal" poll 15% said congress should lead the investigation. 78% said a special prosecutor should. >> we need someone who's independent of the justice department to get to the bottom of this. >> reporter: even some republicans say they want to hear from the ex-fbi director. >> i think we need to have comey come before the judiciary committee and clear the air. did the president ever say anything to the director of the fbi that would be construed as trying to impede the investigation. >> reporter: also troubling, the president's tweet saying james comey better hope there are no tapes of our conversations before we starts leaking to the press. >> when we see presidents who secretly tape that usually doesn'tnd up as a good outcome for a president. >> if in fact there are recordings, i think those recordings will have to be subpoenaed. >> reporter: the white house says the president was simply stating a fact and not threatening comey. the former fbi director will not be testifying on tuesday but committee members are saying
they are concern that comey will testify in the not so distant future. jennifer johnson, nbc news, washington. >> the united states is nearing a $100 billion deal to sell arms to saudi arabia, as president trump prepares to visit riyadh this week. more from abu dhabi. >> reporter: good morning. it's just a few days away before trump heads to israel. members of congresses are looking at other ways to fight iran, including hezbollah. i had a chance to catch up with the president of the central bank. let's take a listen. >> we are worried. and the difference is that this time we need to get in contact
at the level of the country as a whole, because the amendments are having more targets which can be a problem and difficulty for us, in lebanon. and for our banking secretary. so the lebanese government is going to put up a strategy to be able to communicate with the united states. and try to explain the activity. as it is abois abrupt, we are s waiting. and the only initiative taken by the parliament, and also by the banking exercise that they will
be present in washington next week. so, we hope that this -- this amendment can be softened. >> when you talk about working as a whole, lebanon finally has a full government. you have a president and speaker of the parliament. obviously, the president allied with several different parties to basically create that government. are we talking about the potential of destabilizing what's been accomplished so far? >> i think we have a strong president, a strong government. so, they are capable of maintaining stability. the concern is our relationship with the extended work. for lebanon, it is very
important that our banking sector remains integrated in the world financial markets. as you know, the basis of stability on the military side is the transfers that are coming from the lebanese which represents 15% of our gdp. and this helps lebanon acquire foreign currencies, essentially the dollars in order to fund it. the concern for the central bank is to maintain the banking sector integrated. and to repaying a good relationship with the corresponding banks. and also with the different and various markets in the world. we did a great deal of effort.
and we have encountered resistance internally several times. because of what implementing those and circular that would leave lebanon compliant with the different legislations that are voted outside lebanon, especially in the united states. so, we hope this can be understood. and the next measures will not really help the banking sectors. >> it's kind of a dancing act, isn't it? >> dancing with the wolves. >> essentially described it as dancing with wolves, the balancing act, on one hand they want to maintain the financial system, being more integrated. but at the same time they have to worry about what the
political implications there. there are a lot of questions there. of course, they're trying to build bridges with other countries like saudi arabia, they may in fact do harm to the political system in lebanon. and worried about whether or not these policies are going to do much good. >> thank you so much. moving on. whatever it takes to rebalance the oil market, that's the message from saudi arabia and russia as the two producers agree to sustained alpha cuts into march 2018. the oil minister in beijing said they would continue to reduce inventories at the same pace. let's take a check at how oil price are doing. wti up by 2.5%. brent crude 52.06 up by 2.4%. still coming up on the show, putin sits down at the piano in
beijing but is he playing to xi jinping's tune. we'll get more after the break. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
north korea has launched what it calls a new type of ballistic missile. the missile through around 430 miles before crashing into the sea of japan about 60 miles from russia's region. the usa ambassador nikki haley warning that they tighten on pyongyang. meantime, xi jinping with leaders at a summit in beijing,
the chinese president said it was necessary to reject protectism. speaking with the chairman of the firm telling her that it was creating an environment for business companies before. >> business is better than before, because especially from the last two years, countries in the region, the peeps and the companies, customers, feel this is good for their companies. we can form companies that are more open to the products now. >> do you think that china can attract private capital internationally for these kind of projects that's hoping to develop under bun belt? >> i think it is good. they have a good return on their investments. and it becomes able to rocontro
the risks. and in some countries they're investing more in this region. >> how does your company plan to turn a profit over the years with international expansion? >> in general, we are quite good in projects and probably this could lead in the next two years. not worried too much about profitability. the risks, the market risk, that's much more than the investment. >> have you have thought not to invest in the china economy because of these risks? >> yeah. we top many projects because of risks and social risks. with a lot of troubles.
so, we stop some investments. >> what are the biggest challenges that you see in international partnerships like the one liugong has? >> in some markets, the economies with the change, this ye year -- controlled the risk out there. the market is quite open. and secondly, the currency exchange rate unless in the last two years has changed very fast. >> china's domestic economy has slowed, the growth has slowed more recently. do you find greater opportunities outside of china to help rebalance what the company is able to recoup? >> yeah.
the key for big companies is you have to balance the domestic markets and the foreign markets. and more balance for the domestic risks. >> let's get out to eunice standing by in beijing. this project seems like a very ambitious one. how difficult or how easy is it for corporations to get access to it? >> well, that's a really big question that a lot of people are asking because what the conversations have been is really two-fold. one is what china wants everybody to know about this initiative. and then what people are actually talking at behind the scenes. so what china wants you to know this is a massive initiative that is supposed to connect a lot of countries, promote infrastructure throughout the world and improve relationships between trading markets. in fact, xi jinping said in his opening address, this is, of
course, the chinese president, that this is going to be a new form of globalization. and that he was going to be one of the key international figures at the center of this promoting freer trade. this new form of freer trade. however, of course, there are a lot of big questions about how companies are going to be able to get involved. this is what the european commission vice president said about european companies and their part. >> we have are deep thinking on the initiative. it is ties between europe and china, it focuses not just on infrastructure but on wider issues. in trade, especially investment agreements because it will strengthen connectivity, with european companies, the european economy to china. the second is the protection, what to do, what to do in order
to allow data to flow freely between china and europe. and of course, infrastructure projects are very important. >> eunice, thank you so much for that. before we wrap up this show, let's have another quick look at u.s. futures. the s&p 500 up by 5 points, dow up by 43 points. the nasdaq up 7 points or so. u.s. stocks closed slowly lower friday. the nasdaq grew 3.4% for the week. the s&p and dow were lower for the week. that's it for today's show. i'm carolin roth. and "worldwide exchange" is up next. see you tomorrow. bye-bye.
good morning, blockbuster hack attack. and cyberbreach targets more than 200,000 people in 150 countries. add oil shock. crude oil prices rip higher, as saudi arabia and russia talk about production cuts. and watch out uber. rival lyft is teaming up with waymo for those cars a reality. it's monday, may 15th, 2017. "worldwide exchange" begins right now. ♪