tv Street Signs CNBC June 5, 2017 4:00am-5:01am EDT
♪ welcome to "street signs." i'm carolin roth and these are your headlines. british ministers ready for another security meeting on downing street after a terrorist attack killed seven people and injured 48. shares tumble after the gulf states led by saudi arabia cut the ties with qatar accusing the administration of funding terrorism and meddling in their domestic affairs. better late than never, the
overseas deal after missing its first debt deadline in over a year. often andout, juventus shares of the italian football league as it loses to real madrid in a final. however thousands are injured in a stampede in taurine. good morning, everyone. let's get you straight to some data. we've got the may flash composite. "m" i coming in at 56.8 smashing the year's six-year high. pmi came in at 56.3. new order growth accelerating and getting to a very limited reaction in year one dollar 12.63, and we have pretty robust numbers from germany but also from italy. that tells us the services sector of course accounts for a major part of the year when the
economy seems to be humming along quite nicely. let's have a look at the eurozone markets. and today, we've got a lot of the market closed for public holiday, germany is closed, switzerland, and the markets that are trading the ftse 100 off by 0.1%. friday, we did see a record high, 7,500. and we're still closing trading very closely to the record highs. spain is off by 0.5%. the ftse in italy off by two-thirds percent. oil and gas, different jump in oil prices. this is in part based on the situation we're seeing in qatar. and we'll get to that story in just a little bit. first of all, back to the top story, two more raids have been conducted in east london this morning. in addition to the 12 arrests that were made in the same area following the terror attack in the city center that left seven
people dead and 21 in critical condition in hospitals. saturday night marked the third extremist attack in the uk in as many months. prime minister theresa may responded by saying, quote, enough is enough. adding that difficult conversations lie ahead to tackle extremism. >> defeating this yolgd is one of the great challenges of our time. but it cannot be defeated through military intervention alone. it will not be defeated through the maintenance of a permanent defensive counterterrorism operation. however skillful its leaders and practitioners. it will only be defeated when we turn people's minds away from this violence. and make them understand that our values clear realistic british values are superior to anything offered by the preachers and supporters of hate. >> nbc's richard engel has a recap of the dramatic events on saturday night.
>> reporter: just before 10:00 p.m., a van began to speed across london bridge, jumping on and off the curb. swerving into pedestrians. coming to a halt on a street filled with bars and restaurants. >> it was just, you know -- >> reporter: the van came to a crashing stop? >> yeah. >> reporter: this group of lithuanian londzers out for a birthday celebration then saw three men jump out of the fan that nearly hit them armed with knives. >> i think there was a bar manager stopping like, don't come. >> caller: it's filled up? >> yeah. >> caller: he stepped in front of you? >> yeah. >> reporter: the cell phone footage shows the men walking calmly through the market looking for their next victims. so he was running? >> yeah, yeah, yeah. >> reporter: s.w.a.t. team as arrive quickly.
and enforce ordering bargoers to get down. within minutes, all three suspects were killed by armed officers. the vests the attackers were wearing which looked like suicide bombs turned out to be fakes. the rampage left seven dead and nearly 50 injured. many critically. now, investigators are tracking down friends and relatives of the attackers to find out if they were part of a wider network. neighbors said the suspected attacker who lived here didn't stand out. isis has called on its supporters to carry out attacks just like this one during the muslim holy month of ramadan. last year, isis put out a similar claim and ramadan turned out to be a bloody month. so, we might not have seen the end of this, richard engel, nbc news, london. >> let's go to london bridge. give us the latest and update on
the situation? >> reporter: well, we've been hearing from metropolitan police cressida dick in the last hour. with raids around 4:00 a.m. this morning. we had 12 arrests yesterday at four different properties over the course of the day. we understand there have been more arrests so far this morning. although we're not sure of the numbers. she also said they have identified the attackers but would not yet be releasing the names of the individuals. when they continue to figure out whether there were people involved in helping with this attack. it took place just down the road through here. you can see it through the piece cordon here at the end of the street still closed and borough high street another major thoroughfare still closed as well. they are allowing a few office workers in there to collect their belongings. and we understand passengers
going through the train station are being allowed to exit and more enter. this has turned into a bit of a hot potato between conservatives just days ahead of the general election here. theresa may is under a lot of pressure with her numbers. one of the prime ministers talking about bbc and ite, here in the uk, about the numbers, refusing to answer questions about whether they have reduced police on the streets in the uk sinister risa may was first secretary responsible for british security in 2010. the reality is there are fewer armed police on the streets. conservatives argue that's much more to do with funding requirements and it's not so much about the numbers as the powers those police have. clearly, the police caught up very closely on the incident here on saturday night. four of them, three from the metropolitan police. one british transport police officer injured in that attack. they fired as many as 50 rounds to kill the three suspects once
they arrived on the scene there. >> we'll leave it here for the time being. thank you so much for that. we want to get out to peter williams lectern at petersson university. i wanted to pick up on a few points. the fact that undersecretary at the time teresa may have cut so much police satisfactory over the last couple of years, do you think this in any way shape or form contributed to the fact that we've seen three attacks in the uk in less than three months? >> well, it's still early to put the -- to actually indicate what one specific area which is responsible for the three attacks which you quite rightly say. and largely since 7/7, back in 2005, as your viewers will appreciate, the uk has been fairly terrorist-free of attacks. and i would argue that has been
as a result of our good use of intelligence and efficiency of the intelligence services which includes the police. now, following manchester, mi-5, the security service, for the first time, actually, publicly announced that they will be conducting their own inquiry, as to their actions in the leadup to -- in the leadup to manchester. and if they could have done anything different. what my view of this now is we should wait for those inquiries to be completed, but they should encompass the resources that are available to the police. now, for example, i'm being very careful what i'm going to say here, about three weeks ago, the labor party announced if elected they would increase the police established naturally by 10,000
police officers. i was consulted on that, and my view of that would be that they should be deployed if this came to fruition in neighborhood policing roles. but as that area has made good policing which is so crucial to keeping communities safe. and also crucial for the intelligence flow that we have missed 2010 and the police that have been impinged on the police that have been -- have no option, i'm afraid, police officers booked to reduce neighborhood policing and operations since -- >> peter, are you saying then, that under a labor government, uk would be safer, would be more immune to these kind of attacks? >> well, what would make the point is the fact that what we've seen the demise of, in my view, what the public will recognize themselves in the fact of the visibility of the police
and the fact that we go around feeling safer and building safer communities. the last labor government passed one major piece of legislation which created what we call crowning disorder reduction partnerships. they are multiagency partnerships, not just the police, that are keeping communities safe on a local basis. now, whatever happens globally affects locally as we are now finding out. sand i would make the point that neighborhood policing was the central core of those community safety partnerships. and i'm afraid it's that which is missing currently, along with police intelligence units, that were so crucial to liaison with agencies such as the security service, and we work very, very closely and well with the security service normally, i'm afraid those resources are sorely missed. they need to be replaced, in my
view. >> peter, i just don't see how better neighborhood policing would really deter extremist jihadists from carrying out such atrocious attacks. because these attacks cannot be prevented by a neighborhood police force. maybe they'd be able to prevent more, you know, burglary in your neighborhood. but what about extremist jihadists who are actually inspired by i.s. in syria? >> well that's a very relevant point, but the beauty -- the advantage of neighborhood policing is that they actually get to know their communities. their role is very much to be integrated within the community ises. and it's via that route that the intelligence is condensed for people who may well be at risk for being radicalized. that is the idea, the element of
the counterterrorism. now, at the police federation conference some weeks ago, a particular officer stood up and publicly made the point that exactly what i'm saying, is that we've missed the demise of neighborhood policing, and we are losing the intelligence flow. but you're quite right to say, neighborhood policing alone cannot resolve this problem. and cannot prevent these fervent attacks. but it's a crucial element in the fight against isis. blah we defeat this terrorist group like all other terrorist groups is the good use of intelligence. >> peter, do you think it was a mistake to actually lower the threat level from the highest level, number 5, which had been at right after the manchester attack, just a few days after that attack, that very sad attack two weeks ago? do you think this attack over the weekend could have in any way been avoided, had the threat
level been higher? or, am i reading this incorrectly? >> well, my view is that the critical level should only be implemented when we have specific intelligence that an attack is imminent. we didn't have that, clearly. so, i think jtac was quite right to lower, to lower the threat level back to severe, which is, of course, indicating that an attack is highly likely. but the issue here is carolin, it's not the threat level, it's the fact that intel against wasn't there and that is the area where we really need to look at. that is how we're going to prevent future attacks. that is what kept us safe between 2007 until westminster in march of this year. >> peter, thank you so much for your time. really appreciate it. peter williams, elector and policing at liverpool john moors university.
you think traffic's bad now, the future's going to be a nightmare! does nobody like the future? c'mon, the future. he obviously doesn't know intel is helping power autonomous cars and the 5g network they connect to. with this, won't happen in the future. thanks, jim. there's some napkins in the glovebox. okay, but why would i need a napkin? you could have just told me a bump was coming. we know the future. because we're building it.
we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. britain's political parties have resumed election campaigning after all, but suspended plans since the saturday evening attack on london's bridge. the leaders said plans should go ahead and democracy should be defeated. jeremy correspond binn said the perpetrators should not succeed and justice would prevail.
the opposition leader reasserted his commitment to the reversing of theresa may cuts. >> it should be public safety and i will take whatever steps necessary to protect the security of our people and our country. that includes full authority for the police to use whatever force is necessary to protect and save life. as they did last night, as they did in westminster in march. we cannot protect the number from ton the cheap. the police must get the resources they need, not 20,000 police consults. >> meantime, the polls continue to type the yougov survey putting theresa may four points ahead of corbin. it's difficult to say whether
terrorismlying into the tightening at the polls, do you think it does? >> reporter: well, this is the third attack in three months. and it's the second attack since the 18th of april when theresa may called for this very short election campaign. so, yes, security definitely now has risen to the front as the key issue in the final few days of the campaign. this is an election in which theresa may really wanted to put the vote on brexit. she feels her hand is very strong and seen as a tough brexit negotiator. the conservatives keep emphasizing the fact that is a campaign to give her a stronger mandate to enter into brexit negotiation. from the labor side, they've been looking at more on the lines of redistribution, what they can do from parts of society which are struggling more from an economic perspective. nonetheless, what has happened has put the focus on security. and the message coming out from labor and conservatives is very
similar in the fact they're taking a much harder line. although national campaigning was suspended yesterday, theresa may's speech as prime minister really focused on how much needs to be done to tackle extremism and prevent people from turning towards extremism before it gets to the stage where atrocities are committed. for lots of talk about increasing powers and doing work with foreign governments and social media platform providers to win the minds of potential jihadists and to stop online recruitment and stop the radicalization of more people, with jeremy corbin, as we've heard from his speech focused on police numbers on that side. and very much a dig at theresa may's record in office when he was home after-secretary. so both sides really looking to come out as the stronger person to demonstrate, will leadership when it comes to reining in
terrorism, reining in what's described as the domestic threat by the police chief this morning. we've seen very much a focus moving away from labor side and on the conservative side and bringing the nation to the middle to discuss security as the key topic for the final days of the campaign. back to you. >> thank you, jemaah, only four days to go. russian president vladimir putin has told nbc news he does not have any compromising material about donald trump. in an exclusive interview with megyn kelly, putin dismissed the reports as, quote, nonsense, despite the previous visits to russia, he had no relationship with the u.s. president and has never met him. putin also downplayed his relationship with national security adviser michael flynn following the emergence of the two sitting next to each other at a dinner in 2015. take a listen. >> translator: you and i, you and i personally have a much closer relationship than i had
with mr. flynn. you and i met yesterday evening. you and i have been working together all day today. and now we're meeting again. when i came to the event for our company russia today, and sat down at the table, next to me there was a gentleman sitting on one side. i made my speech, then we talked about some other stuff and i got up and left. then afterwards, i was told, you know that was an american gentleman involved with some things. he used to be in the intelligence services. that's it. i didn't really even talk to him. that's the extent of my acquaintance with mr. flynn. >> there's been questions in america about donald trump's finances, he hasn't released his tax returns. there have been questions about the russian secrets do s s do dh he says is fake. and there are discussions about communications between the kremlin and the trump campaign all of which has americans asking. do you have something damaging on our president?
>>. >> translator: well, this is just another load of nonnens. where would go get this information from? why do we have a special relationship with him? we didn't have any relationship at all. there was a time he used to come to moscow, but, you know, i never met with him. we have a lot of americans that visit us. right now i think we have representatives from 1 eamerican companies coming to russia do you think we're gathering information on them now or something? have you all lost your senses over there? >> let's get to some of the stock news this morning. banco popular is trading up after the potential wind-down of the spanish bank. the bank's chairman has called on staff to remain calm ahead of meeting with the ecb calling the bank, quote, remains solvent. and shares of jew ved shaha opened lower after the loss to
real madrid. the club lost 4-1 to real madrid. and ocado shares hit highs after the first overseas deal. the news comes a year and a half after it missed its own deal-making deadline. the acquisition is for an undisclosed sum for an unnamed company in europe. i wonder which company that might be. we do have to go to a quick break. do check out our world markets blog. that's going throughout the day. we'll be back after a short 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.
hello and welcome to "street signs." i'm carolin roth and these are your headlines. british ministers arrive for another emergency security meeting at downing street as more raids are under way in connection with the terrorist attack that kills seven people and injured 48. shares in dohar tumble after accusing them of meddling in domestic affairs. better late than never for qatar. shares hit highs not seen since 2016. down and oat for juventus,
shares in the italian football club sink, after it losing to real ma friday where over 1,000 fans were injured in a stampede in taurine. good morning, everyone. good-f you're just tuning in, i'm just waiting for some services pmi out of the uk. there you go. uk pmi came in at 53.8. is that was below expectations we were looking for versus april 55.8. what we got in the month of may, that is the lowest read for services sector since february. the uk may have served the pmi prices charge component, that fell to 52.7. that's the lowest since november 2016. those supplies will be given the recent pressure on account -- sorry, the upward pressure that we've seen. and there you go. you're seeing that sterling
dollar is falling a little bit on the back, as 0.1% still the dollar changing hands at 1.2865. let's take you straight to u.s. futures and see how they're faring after we saw record highs for all the major indices. the s&p 500 seen off by 2 point, dow jones off by 7.5. and nasdaq could fall by 2 points. once again, we've seen the record highs despite the fact that the jobs report was very weak. 130,000 jobs were created in the month of may. really undershooting the forecast of 185,000. suggesting the market is losing a little momentum, despite the fact that unemployment has fallen to 16-year lows. let's show you what's happening in europe. the only quiet day across europe, given that many of the markets like germany, austria, switzerland, you name it, it's actually closed because of the holiday. the ftse 100 down by 1.4%.
the cac 40 off by 0.3. and spain as well. when it comes to the fx markets you'll see that the euro dollar has been under a little pressure, 112.65. it seems like the dollar is recovering a little bit after falling to seven-month lows with the jobs report below 2.2%. and once again, the pound against the euro dollar is 1.2864. given that the services does account for roughly 70% of uk's gdp. moving on, president trump expressed his condolences to great britain after saturday's terrorist attack, but also took the opportunity to criticize london's mayor and promote his travel ban in a flurry of tweets. but security experts say a travel ban would not have stopped an attack like the one in london. nbc's jennifer johnson has the full report from washington.
>> reporter: president trump sent condolences to london after the terrorist attack, but also unleashed a twitter storm. we must stop being politically correct and get down to the business of security for our people, the president tweeted. and then criticized london's mayor for saying no reason to be alarmed. the mayor said he was trying to reassure londoners for seeing is a massive police presence. and in another, we need the travel ban as an extra level of safety. critics say that wouldn't have stopped this kind of attack and isn't the answer. >> the travel ban will be cannon fodder to the recruiters. it's the worst thing we can do. >> reporter: others fear stigmatizing muslims from certain countries will back fire. >> we alienate the very communities here in the united states, whose cooperation we most need to detect and prevent these homegrown extremists from being able to carry out attacks. >> reporter: security experts say while the u.s. is at risk for this kind of attack, parts of europe has much greater extremist populations.
>> we've never had the same degree, the same volume, the same speed of radicalization that the uk, belgium and the presence have had. >> reporter: the trump administration has asked the supreme court to reinstate the proposed travel ban on six mostly muslim countries. lower courts have blocked the policy. this week, the president faces another storm, as fired fbi director james comey is set to testify before the senate intelligence committee thursday on the riggs election investigation. jennifer johnson, nbc news, washington. >> let's get out to the senior analyst at ihs market. unfortunately, it's not been too long since the two of us spoke. we actually talked about the terrible kabul attacks less than a week ago. i'm wondering about the timing of all of these attacks, whether here in the uk but also in kabul, is there an increased level of attacks because simply because it's ramadan? >> ramadan typically is a period
where we see groups ramping up attacks so, it could be connected to that. of course, there are also many other factors that play in the uk, we're looking at the election this week. so, that's the kind of key point that maybe -- may be driving attacks plus, publicity that attacks are received much higher. but i would say between kabul and london, there's a host of drivers that are affecting the attacks. >> we knew about the terror cells in birmingham and manchester, do you think that counterterrorism intelligence police, you name it, do you think they underestimated the fact that there are so many of them, even here in london and east london specifically? >> i wouldn't say that the counterterrorism forces have underestimated the size of these
networks. they're looking at thousands and thousands of individuals. so, i think in this case, we're likely looking at more of a case of not really having the resources to continually monitor everyone who is on kind of that high-profile threat list, rather than not having -- ever having any kind of contact, or having these individuals on their radar at all. >> not preventible, that's the problem. because we don't have the resources. and even if under a new government we saw a rampup in resources, you still wouldn't be able to find ever noodle in the haystack? >> no of course not. and attacks like this which are conducted using very low-capability names looking at the use of vehicles. looking at knives which are, of course, weapons, but it's very difficult to control. in that case, it's difficult to detect these types of plugs in
advance, because actually the transition from planning to conducting the attack itself can be very quick, indeed. >> let's talk about how closely the three attackers actually worked with i.s. i.s. has claimed respond for this. but we don't know whether they were simply inspired by i.s. whether they actually had training with i.s. we're just waiting for the latest details to come out from the uk government. what's your best guess? we know that the manchester attacker, for example, was actually trained in the middle east. what do you think we'll find out about the attackers? >> so, as the police are conducting these investigators, we'll undoubtedly hear much more about their potential connection to muslim groups but in terms of -- we're looking for -- in the form of -- >> all right. unfortunately, ohso, we're going to have to let you go the line has become quite bad.
i do apologize for the technical problems. thank you so much for your contribution. moving on, qatar has said it is facing a, quote, lies and fabrications ensueding saudi arabia that bahrain have severed ties with the country. they have cited dangers of terrorism and extremism. emirates is the latest airline to suspend all flights to and from doha, as fallout between the uae and qatar intensifies. i just want to show you what's happening with oil prices this morning. and we're seeing a little addition of the geopolitical risk. crude trading hands of 48.2. and the main index in qatar at a slump of 8%. it's off by quite a big margin off by 7.1%.
let's get to hadley nearby, and hadley, what was the source for flare-up in tensions in the first place? >> this actually was a story that's been percolating for quite sometime. yes, days ago you had this alleged hacking of the qatar website, to mean basically questioning u.s. policy and airing his support for countries like iran and israel. but aside from that, this is something that's been going on for years now in terms of the dissatisfaction that state like saudi arabia and uae have had with qatar policy. not just al jazeera news located in qatar, talking about unfair coverage that's what they call it but also qatar supporting the muslim brotherhood and in egypt, the support for hamas as well. and the taliban this is a country that played politics and
really developed foreign policy in of the last several years many times and often at odds with other gulf states. i want to focus on the broader picture in tellers of the economics of the situation. a couple years ago with the shift in saudi oil policy, there are implications here in the gulf countries. a lot of questions about volatility and consumer confidence and that's played out over the last few years in a pretty negative way. what this will do to the private sector when you talk about cutting flights, fly dubai as well, these are very busy corridors between the uae and qatar. they're living in uae and basically going to saudi arabia. they're traveling out of this country. you have to remember this has major implications not just for the economies of these countries in the gulf arab states but also the diplomatic side as well. at the end of the day, we just came off a couple weeks from the trip. u.s. president donald trump, a successful trip to saudi arabia really seems to align foreign
policy with gulf area policy. qatar, of course, as you may remember has an army base, has an air base and bahrain has the u.s. fleet. so a lot of questions not just in terms of economics, but also in 2er78s of geopolitics, carolicar r carol carolin. >> you raise good points do stick around. secretary of state rex tillerson said that there are government issues that need to be addressed but he urged the states in question to work together to resolve their differences. >> let me say, there's a growing list of irritants in the region that have been there for some time. and obviously they're not up to the level that countries decidinged they needed to take action, in an effort to have those differences addressed. we have encouraged the appears
to sit down together and address these differences. and there's many roles we can play in terms of helping them address those. we think it is important that the gcc remain unified. i do not expect that this will have any significant impact, if any impact at all. on being identified by terrorism in the region or globally. >> let's get out to international relations of the middle east, lecturer at lancaster university. thank you for your time. is there a place from the west to bring the gcc countries together, or do you think that would be too much meddling? >> i think there's a danger if the west were to get more involved in this then it would be seen as a great deal of meddling. this is an autonomous body, albeit a body that's been increasingly reliant upon the west for security.
i think in the past week or so, with president trump's visit to saudi arabia, we thought that there was this greater unity between the gcc states and between the west, particularly the u.s. and the gcc. but what we saw actually when trump was there was he focused his attention on saudi arabia, and the uae, perhaps ignoring qatar a little bit which suggests that trump is focusing his policy more on those states in defense of qatar as opposed to the weaker states of gcc. >> why did this escalate so quickly all of a sudden? last time we had rifts between qatar and the rest of the gc c countries back in 2014, and we doesn't see a cut in the transport ties. we didn't really see qatar as being expelled from the other gcc countries. what we merely saw was ambassadors were being expelled. why this escalation now? >> i guess there's been a
longstanding tension between the members and the other gc c members, particularly the saudis and the emirates. that stands from two areas, the support for islamists across the region with whom many states have had a complicated, complex relationship. i'm talking predominantly about the muslim brotherhood and hamas. and the palestinian movement based in gaza. so i think the saudis and emirates are worried that qatar was providing a platform for these groups. the second thing is the qatar relationship with iran. and these been longstanding tensions bubbling under the surface but with the purported comphercht by sheikh hamid last week where he was alleged to have said positive things about iran and other states, that was seen as an opportunity for the other powerful gulf states, saudi arabia, emirates, to actually clamp down on qatar.
they could easily have fought this narrative that qatar's main media that covered this story had been hacked but they chose not to. they chose now as a chance to really clamp down. and i think that reflects their growing strength and belief that president trump is firmly on their side. >> and i guess it's also about the growing proxy war as you said between the shiites and saudis in that region. how would it affect some of the proxy wars being fought, for example in yemen or syria? >> look, i'm really conscious not to boil this down purely to religion. religion, of course is an important factor in this but this is a political struggle between the saudis and the iranians and of course, the emirates, bahrainis. and with the forces being expelled which weaken the saudi-like coalition in yemen. of course in syria we have a
hugely complex issue that has already seen bad blood between the saudis and we will see that increasingly difficult to resolve. and that will speed into more retractability within the rivalry between saudi arabia and iran. >> can i just get your take on oil prices and the oil market overall. c qatar is the biggest supplier but not a mitch oil producer as such. do you think the geopolitical risks that we've seen in oil prices this morning is actually sustainable? what's the impact here? >> i think go yo politics is obviously shamd not only by what's happening in one particular state, but also the regional environment. and if we think that there is increasing hostility not only between the saad dis, emirates and if this place out in increasing instability between the saad disand iranians and the
escalation in yemen and syria, of course that will have a huge impact on oil prices. >> we appreciate your time. lecturer for international relations of the middle east at lancaster university. still coming up on the show -- we talk tech trading strategy. is there more room for investors to dig their teeth into the so longed bang stocks? stay with us. we'll be back in two.
welcome back to the show. two more raids have been conducted in east london this morning, in addition to the 12 arrests that were made in the same area following the terror attack in the center of the city that left seven people dead and 21 in critical condition in hospitals. saturday night marked the third extremist attack on the uk in as many months. tech companies have been put into the spotlight after the attack. the prime minister and her home
secretary amber rudd both asked big internet firms to do more in the fight on terror. may used her speech to call for global regulation on companies operating in the sector. >> we cannot allow this ideology the safe space it needs to breathe yet that is precisely what the internet and the big companies that provide internet-based services provide. we need to work with allies democratic governments, to reach international agreements that regulate cyberspace. to prevent the spread of extremist and terrorism planning. and we need to do everything we can at home, to reduce the risks of extremism online. >> we're now joined by james daughtry, global specialists at schroeders. what else should the likes of facebook and apple do to actually prevent this? i mean, it's not really their task to dot work of the police, is it? >> yeah, i think we have some real conflicts here.
again, sort of seen as privacy freedom of speech acts, combined with the fact they do hold this data and they could be assisting in some of the fight against terrorism. we've seen recently facebook adding 4,000 under its content, similar efforts which is part of google, obviously. they have a role to play. i suspect they will do more that's perhaps behind closed doors, a deal we don't necessarily see. they have the data. i'm sure they'll help. >> should they mavnt the costs, too? or the taxpayer? should that be the government? who should that be? >> in terms of adding a few thousand start for the impact they have, i think these firms can afford it. we know they are the five biggest companies on the planet. awash with cash and big profit margins. thus far, they've all largely escaped regulation. that's allowed them to grow into
the cybercompany with these sorts of profit levels. so i think a little bit of impa tuesd impetus from the government to going to help. >> do you think the role that terror is playing will in any way slow the investors love affair with tech? i know these are apples and oranges in a way, but do you think there's anything that can solve a tech rally at this point? >> i don't think this will specifically have an impact. i think investors will be mindful, in part, we've seen them trading, facebook and google trading around 20 times p on the next year, on a cash basis. it's not very rich compared to the market. yet we know these companies are growing 20%, 30%. it's also a key doubt on regulations. i don't think this changes thing. new forms of technology have been coming along for a couple
hundred years now. and it won't stop because of, you know, a terrorist incident, for example. as i said, it's going to factor in. >> let's talk about the stunning rally that we're seeing in some of the bank stocks. they're up 30-year to date. even outperforming the s&p for example. outperforming some of the european markets which have been better than the s&p. can this go on further? people talk about the high valuations, we've got ps of 27 for the overall tech sector. does the argue of valuation hold here? >> i think when you're looking at some of the larger tech stocks it doesn't. actually they're pretty attractively valued. with the p for the sector, there's companies in the technology space that are not earning profits because investors have asked them to do that. they said don't focus on the growth. focus on market share gains. we'll get the profits level. so the e is depressed. when you get to larger cities,
ps of 20 times are really not egregious in terms of growth that they're developing so i don't see valuation as a head wind for these stocks specifically. it's tricky, you know, when you look at the market as a whole. you and i were talking about this. we're sort of nine years into the bull market rally, we know the shillapy is at the second highest year ever. the vix is very low. earning have been growing nicely. it's hard to have conviction to have things to go on. but on a relative basis, these things are generating growth way ahead of the market. and they're not really being affected in valuation, so, i think what you saw at the beginning of this year, just as the earnings grow, it sort of grinds out extra performance. the shares it's difficult for them to b-rate at these levels. that's why they're outperforming and they're likely to continue to do so. >> what's your top point in the sector? i'm just zbefg here, i don't
know. might it be amazon? because it's so dominant in everything that they do. even the netflix ceo said it's quite scary everything that amazon is doing? >> yeah, i think, amazon certainly has wide-ranging interests that make it fascinating to watch from companies. specifically on a two or three-year review, i think facebook is going to be the most interesting company to watch. >> thank you very much. a global technology specialist at schroders. that's it for today's show. i'm caroline roth. "worldwide exchange" is up next. we'll see you tomorrow. bye-bye. these days families want to be connected 24/7.
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♪ good morning. breaking overnight -- saudi arabia and several other gulf states cutting ties with qatar. oil prices are moving on the news. we're live in dubai for you straight ahead. terror strikes again. police raids continue after the third attack on british soil in less than three months. a live report from london on the investigation coming up. plus, markets now. the global reaction to this weekend's events as u.s. stocks are at all-time high. it's monday, june 5th, 2017. and "worldwide exchange" begins right now. good monday morning. welcome to "worldwide exchange" here on