Transcripts For CNBC Street Signs 20240714

But the bank is hoping to close the deal by year end. U. S. Sends additional troops to the gulf. Iran threats are absurd. Its not the first time he said something ridiculous and laughable. The United States is our allies. The attack was against the whole world, not just saudi arabia good morning welcome to the program. We are closely watching the survey data this morning pmi after a weak read in on Germany Economy and france the numbers crossing for the eurozone, 50. 4 that is 50. 4 the flash pmi estimate was seen higher around 52, so it is weaker than anticipated but it is holding crucially above that 50 break even level. When it comes to the comparison to august, you can tell how quickly we have unwound to trade around the 50. 4 level today. When it comes to the deep level of pain across the eurozone, the manufacturing flagged up flash estimate at 45. 6 this is weaker than the 47. 2 anticipated. Also down probably 47 that we flashed up in august when it comes to services, and this is quite crucial in some of the economies this morning we have seen the spillover implications from manufacturing to the Services Sector so the september number 52 the forecast was for high level at 53. 3. Also showing us an unwind from the 53. 5 the instant reaction as you can see on euro dollar this morning. We are trading much weaker at 109. 73 down. 4. So the market swiftly reacting just by way of background, we were anticipating some market reaction, positive reaction if these numbers were any better than expectations. The market was prime very much for a pop in euro because of all the stimulus well be receiving from the ecb later this year so the numbers today that have been underwhelming, very negative numbers have, in fact, caused the opposite trade on the euro this morning. Also yields weakening today would push lower on the eurozone yields lets recap from the German Economy which contracted in september according to the latest flash pmi data from market, the composite tumbled. Manufacturing saw the sharpest decline since the Global Financial crisis in 2009 sinking to 41. 4 while the Services Index also hit a ninemonth low. Just a quick look at how the euro has been traveling so far this morning up 109. 73 you can see the steady grind lower pushing to the higher levels before the data had crossed. Lets just flash up some of the yields across the eurozone straight to the german market, we are negative on the bond yield, minus. 57 spain,. 17 we are closely watching that yield. Minus. 27 on the french level and were at. 86 lets get into some reaction senior columnist at Business Management thank you for joining us for instant reaction its been a series of disappointing numbers this morning from france to germany to the eurozone numbers as a wide block what do you make of just how weak the manufacturing numbers are and the implications for the Services Sector . So good morning the numbers out of germany this morning were particularly negative, especially for the Manufacturing Sector as you said, the Manufacturing Sector is now at its lowest level in terms of contraction. And what it means is this downturn in the Manufacturing Sector in germany has decided to become deeper. It is now contracted for four consecutive quarters, and clearly the direction is still negative Going Forward at the same time, we have seen a bit of a spillover, negative spillover into the Services Sector where the momentum has faded. And clearly the risk Going Forward is that this downturn really extends to the rest of the economy. Wide implications from the impact were seeing on the german export industry i should say. What we got this morning if you look at the numbers across france was particularly weak it wasnt just germany now we have the numbers on the eurozone were seeing a much deeper spill not just in the german power house engine yeah. So the french numbers were also quite negative this morning. Basically showing the Manufacturing Sector there is flirting with recession as well. The Services Sector continue to hold up fairly well, but again, and thats looking at employment numbers for the eurozone we have seen some signs of slowing recently so, employment growth actually slowed in the Second Quarter of this year to its slowest pace since 2015 its still decent growth, but clearly were seeing the early signs of negative spillovers from this weakness in manufacturing to the service sectors. And thats particularly concerning i should add that the Manufacturing Sector tends to lead the cycle, and so this pronounced weakness in manufacturing could really for the economy as a whole. We hoped there were stabilization coming into the economy. Numbers dont confirm that today. You think of all the many issues the general economy has to wade through, clearly trade a huge impact along shadow cast between the fight between the u. S. And china over some sort of trade negotiation. Youve also got 00 cleanup after a long emissions scandal that affected many of the big Auto Companies on germany and on top we had a Huge Industry change with the policy on friday that confused and add more complexity for industry how does germany grow out of all of these problems . Whats the time frame . So, as you said, the German Economy is expected to decelerate further based on these pmi numbers. Meaning in the Third Quarter that the German Economy will experience a technical recession. So far weakness has been really concentrated in Manufacturing Sector which has a series of challenges going from trade uncertainties to the strains for the auto sector. Going forward, there are additional challenges, in particular the u. S. Might decide to impose higher tires on auto imports from yur later this year on top we have brexit. Which caused a bit of a problem for the German Economy, even though the uk is an important destination for german exports. Sylvia, thank you very much thank you very much for giving us color around the developments today. Senior economist at ma Investment Management with us. Shares in thomas cook are suspended following the collapse of the British Travel firm it comes as weekend crisis talks failed to deliver the 200 Million Pounds demanded by lenders for a rescue deal. 150,000 british tourists stranded overseas. However, thomas cook german unit says operations will continue and it has applied for a bridging loan from the German Government a quick look at some of the other players across the industry up 6. 1 of the back of the developments that happened in this space if theres some capacity taken out of the system it should be beneficial for some of the other carriers on the back of what has been a very volatile week of trade for some of the big Airline Operators with the move higher in the oil price on the back of the saudi developments and move lower that is the share price with thomas cook stock has been suspended 3. 45 the chair of the Uk Civil Aviation Authority sought to reassure holiday makers they would not be left behind. It is an extremely sad day. I would like to recognize that its the worlds oldest travel company. There are 9,000 employees who are losing their jobs. Our thoughts are with them its also a worrying time for passengers and i would like to absolutely emphasize you use the word stranded nobody will be stranded. The government has asked us to run a Repatriation Program thats what well do theres 150,000 passengers will be brought home. Lets just take you back to some of the share price action as youcan see. Tui air care, fairly significant big win. Dare say its just more than tui air. Capacity has been lingering issuing for many of the these operators. First up, the huge move to stretch out the number of different areas theyre flying to, routes, capacity, taking more space so, that has been a huge change in the industry that has been having impact right across the board the likes of thomas cook so a shake down in some of the capacity dont forget its not just this company. Also taken out of the system in the past year. So thats had the impact on capacity you have seen that natural spike in some of the other key players. Iag, stock little weaker this morning ryan air, 3. 1 the like for like trade. Youre seeing it in easy jet stock where it has soared by 5. 9 so, the other one you can see in the mix wizz air down about three quarters of 1 but just going into some of the background here, its not as though this is a surprise to the industry we had some warnings in the year from the company itself, series of them and ratings action from a number of big credit agencies all moved after the recent profit warning we had back in may about the companys fortunes effectively downgrading the company deep into junk territory. So on that note, let me bring in pablo maz nirks i senior director at corporate at fich ratings. Nice to have you aboard and thank you for joining us on the back of very swift developments. A company in operation since 1841 suddenly arrives at the end of its journey after banks will no longer underwrite the fortunes of the group. What do you make of how swiftly the events unfolded over the weekend . So of course it is a very sad moment for thomas cook, employees and customers. It is very Strong Company with a strong heritage for sure in the uk as well as in other european markets. So, its a lot down to the Consumer Confidence and partly down to brexit uncertainty in the uk at least. And it is a very seasonal business by the way. Its a company which makes its profits in the summer period so, and the important thing to keep in mind the liquidity which matters in the case like this. So, from now until december, the Company Needs to pay the suppliers, the hotels, the other airlines for the services they provided during the summer so, this is a crunch time for thomas cook for sure and this is not the first time that actually thomas cook had these issues if you remember well back in 2012, the company had similar liquidity issues but then the banks provided extra cash. You flagged up tight liquidity problems earlier in the year that happened to be no sale and problems accessing senior secured facility. You moved to push the stock push your recommendation to ccc plus which is extremely high risk bond territory. Were you concerned the company could not just get to the finish line on a sale process well, our current ratings single c which means the default is imminent or inevitable and for sure theres no way out from the situation. The focus from now on the next few days and weeks will be on what the practice liquidation or the administrator will do with the business and therefore from our end its about the recovery next couple weeks and months from here when it comes to thomas cook. What about some of the rivals. We have seen a strong reaction list on the equity side today as the market weighs up we saw similar implications from monarch. What do you make of the reaction that could be a positive or win from some of the other airline players . I mean, its hard to say obviously. This is a large bankruptcy for in the case of thomas cook remember that thomas cook is a tour package operator with an airline as well. For sure i would say repercussions for the whole industry temporarily on a more positive mode for some of their competitors and may pick up some of the slack in terms of business but in the longer term, its still the market is there for most operator for the airlines lets not forget the airlines have moved into the tour packages as well so essentially its all about the growing share of spending among consumers. Longer term, actually the thomas cook brand remains a good brand. Its all down to who may be interested in the brand and reinstated the business somehow in the future. Can i ask you about in some way it was sticking to its guns for the negotiation, didnt try to rescue thomas cook at this point. It relied on the banks does it Say Something about a ready buyer or the amount of cash that some of the buyers have to swoop on some of the assets should there be some concerns about the ready buyers like i said earlier, this is a business that need cash at a particular time during the year. So this is an immediate urgency, obviously has been until now for this company if youre investors and cant opine on that, you are looking into the longer term prospects of that business and as i said, there is a future this is a strong brand but the company missed cash in the next two or three months at this point in time, the banks were not willing to put up cash or other lenders it was all about either the support from the holders or shareholders, but lets not forget this was part of the recapitalization plans the company was going to get fresh cash, it just needed a bit more than expected thank you very much for taking the questions, pablo mazini in other news, Deutsche Bank agreed to transfer its prime finance equities university to frances bnpparibas both banks said they will work to maintain continuity of service with their clients bnp they will have a seamless transition. Quick look at how european markets are fairing for the mondays session so far theres quite a fair amount of red ink and not much green according to the bars on this heat map. Down. 9 coming up on the show, saudi minister state Foreign Affairs calls on allies to counterirans aggression and tells cnbc teheran is responsible for an attack against the world you can catch that interview next we call it the mother standard of care. Its how we care for our patients like job. His team at ctca treated his cancer and side effects. So job can stay strong for his family. Cancer Treatment Centers of america. Appointments available now. Cancer Treatment Centers of america. With tough food, your dentures may slip and fall. Fixodent ultramax hold gives you the strongest hold ever to lock your dentures. So now you can eat tough food without worry. Fixodent and forget it. With sofi, get your credit cards right by consolidating your Credit Card Debt into one monthly payment. And get your Interest Rate right. So you can save big. Get a nofee personal loan up to 100k. U. S. Secretary of state mike pompeo has announced that additional troupes will be sent to the gulf region following attacks on Saudi Oil Facilities earlier this month he said he hoped the avoid conflict with iran which the u. S. And saudi arabia believe is behind the attacks teheran denied any involvement irans foreign minister said the country is prepared for a, quote, all out war in the event of a conflict with the u. S. Or saudi forces in an interview with cnbc, saudi minister of state of Foreign Affairs dismissed the claims thats ridiculous and its not the first time he said something ridiculous and laughable. Saudi arabia and the United States are allies. The attack iran conducted, was an attack against saudi and the world. Thats ridiculous. When you take a step back and think about this International Consensus youre looking for, you said just a few minutes ago that you think sit the responsibility of the world to protect this region. Isnt that saudi arabias responsibility of course, its our responsibility to protect our borders, our people, our residents, our infrastructure, absolutely but the world also has responsibility to make sure that iran is not allowed to get away with murder and that irans aggressive behavior and destructive behavior must be checked and the world has a responsibility to ensure the freedom of navigation in the gulf and in the arabian sea so the Global Energy supplies are not disrupted. We have committed a lot of our resources to this effort we have Strong Defense capabilities in order to deal with these efforts, but it has to be the World Community has to take a step in this direction also one of the Things International community can do is nothing further isolate iran seems as if the president twice has backed down from directly confronts iran in the last few months. Does it worry you that at the last moment hell back away . We are in consultations with the u. S. On how to deal with irans aggressive behavior as we are with other allies around the world. I think once the results of the investigation are finalized we will have to make decision with regards to what steps we need to take to make sure this doesnt happen again. Walk me through those potential steps. How many diplomatic tools do you have left in the bag. There are a number of issues one can take, increased isolation of iran. Increased sanctions on iran. There are other steps can be taken and other areas but i will not get into them because it is not my per view. The ceo says the state owned oil company has come back from the attacks against its facilities, quote, stronger than ever in a note to employees, added full production will resume by the end of the month however, media reported quoted saudi officials who say repairs could take months longer than aramco anticipate. They selected ubs and Deutsche Bank as book runners for its potential 2 trillion initial public offering. Aramco began to inform the banks about the roles. Both banks declined to comment aramco is looking event to delays to the possible ipo despite concerns over the impact of attacks hadley filed this report from the companys damaged oil field. Reporter nearly a week after the worst terror attack, saudi aramco has ever seen, an assessment of the damage multiple strikes taking out half of saudis production with 5. 7 Million Barrels per day offline in a matter of minutes now as you can see behind me, significant damage to one of four stabilizers, this is just one of four locations that were under attack around 3 40 a. M. In the morning over the weekend aramco telling us they were able to put these fires out within three to four hours of the attacks but that didnt stop at least 1. 2 Million Barrels per day from being knocked out of the production this is just one of two massive facilities now under repair. With the government hoping to get back to full production as soon as possible crews working around the clock to get the company back on track. Earlier this week, Saudi Defense officials show evidence of what they say was irans direct involvement. According to Saudi Defense officials 18 atvs were launched. This is one of 11 that were hit in the attack and this is a plate from one you can see how massive the damage that was done known as the mothership, this is the largest oil and gas stabilizer in the world. And just days following the attack, this facility already back to 2 Million Barrels per day and the oil minister says theyll return to full production by the end of the month. But the stabilization columns many with gaping holes serve as a grim reminder of what using oil as a weapon looks like for cnbc business news, im hadley gamble. Coming up on the show, splits deepen in the uk Opposition Party as differences over brexit come to a head were live from labors annual conference next. These folks, they dont have time to go to the post office they have businesses to grow customers to care for lives to get home to they use stamps. Com print discounted postage for any letter any package any time right from your computer all the Amazing Services of the post office only cheaper get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again heres another cleaning tip from mr. Clean. Cleaning tough bathroom and kitchen messes with sprays and wipes can be a struggle. Theres an easier way. Try mr. Clean magic eraser. Just wet, squeeze and erase tough messes like bathtub soap scum and cakedon grease from oven doors. Now mr. Clean magic eraser comes in disposable sheets. Theyre perfect for icky messes on stovetops in microwaves and all over the house. For an amazing clean, try mr. Clean magic eraser, and now, new mr. Clean magic eraser sheets. Welcome to street signs if youre just joining us im karen cho, these are your headlines. Germany contracts the euro falls. The manufacturing pmi plunging to a level not seen in a decade. Uk travel firm thomas cook collapses leaving hundreds of thousands of tourists stranded and sending rivals higher with germanys tui on track for its biggest daily gain since april. Oil prices rise as the u. S. Sends additional troops to the gulf, while saudi arabias state foreign minister tells cnbc irans threats are absurd. Its not the first time he said something ridiculous and laughable. Saudi and the United States are allies the attack iran conducted was against the whole world not just saudi arabia vaguely troubling. Ubs tells cnbc theyre changing the investor environment. I dont expect european Interest Rates to change any time soon. This will lead to big changes in investor environment because in the past you could expect to wait it out. You cant wait it out now. It has been a very weak start to the trading week here in europe. Quick look at some of the Market Action this morning in the face of what has been negative data for germany, for france and across the eurozone. The overall pictures you can see in the red down by. 7 the ftse here in the uk as we watch Brexit Developments and the labor party. Also services impacted now with effective contraction across on the latest surveys the pmis at 49. 1 were down 1 on france and this economy too also showing the impact of the trade war with the Services Sector also being hit 1. 1 down for the French Market and italian stocks fading by 1. 1 at the start of the session. Lets just push on from some of the that redding into implications for the euro which has been softening up. There was an expectation we would have seen a pop in the trade in fact the very opposite happened and were trading below the 110 handle the rest of the board is actually falling versus the safe haven japanese yen dragged lower by the euro and you can see the dollar also trading weaker so it is one for the safe havens this week on the markets u. S. Market actually interesting this morning after a very high volume session that we saw friday the major indexes breaking a threeweek winning streak. Lets move on to politics. Another big week for british Prime Minister Boris Johnson who arrived in new york for the u. N. General assembly its not officially on the agenda, he is expected to discuss brexit with his french, german and irish counterparts during a series of private meetings a report in the Sun Newspaper suggests johnson and u. S. President donald trump have agreed to strike a trade deal by july 2020. Meanwhile the Opposition Party labor is grappling with internal divisions over brexit. Many of its members want to remain in the eu but if he becomes Prime Minister he would seek a new deal to leave and then present the public with both options. Look, this is the best deal we could get this is the remain and hopefully reform option. These are the choices before you. So the choice before you is staying completely neutral, staying out of this which is what you seem to be saying or actually saying this is the deal i Jeremy Corbyn negotiated the other piece in the puzzle is the role of the labor party in this and what we said is that we would want to hold a special conference of our party at the point weve got this offer from the eu weve got this as a remain and hopefully reform option because i do think even those that strongly in favor remain recognize the eu needs to have some reforms. Lets see what Jeremy Corbyn fence sitting means for the annual conference today. Willem, many want him to take a position on brexit rather than postponing it. What does it mean in terms of a clash between the leader and the rest of the party . Reporter that means it will be a series of votes on different ideas for brexit to explain about this, im joined by a sitting member of the labor Team Jonathan reynolds, youre in charge of your partys position when it comes to the city of london this is the key issue for a lot of businesses watching this conference what exactly is the partys position likely to be after todays votes do you think well, its fundamentally to give the public the final say on the deal that it has put to the uk thats been agreed by the eu. What you have today is chance for different parts to express their view the fundamental thing that all the options have in common is labor completely opposed to a Nodeal Brexit which could be very difficult for all parts of the country. Especially for Financial Services and fundamentally to give the public the final say in a new referendum, but crucially in between a position has been agreed, a viable leave deal and a remain position. I think thats the only way this country will move on from this initial stage of brexit. Its a process not an event but it gives us a chance of getting that quite frankly that seems the only likely way to move on. Is that referendum only possible after an election both in terms of practicalities and party policy do you think . I dont think so. Much depends on whether the current Prime Minister gets a deal what we hear it starts very unlikely clearly there is a possibility that would depend on how that deal is treated by parliament and what the stages are after that were getting very close to a change of government between what we mean fixed term politics if the current one fails, failing that it will be a general election or a referendum how we get there depends partly on how we respond to what happens at the European Council at the end of october, but were pretty close to something, i think. Do you have sympathy for people watching this conference and the labor party over the last few months who say i dont understand what the labor party wants when it comes to brexit . No, i dont think thats fair i would describe it like this, the conservative government is willing to do brexit with no costs probably with no deal. Forget the whole thing, move on. I think thats realistic and our position lets give the public a choice between remaining in the European Union and a viable deal thats been agreed theres no confusion or counterclaim about what that would really mean. The terms are very clear they get the final say and we implement what they ecide. Lets talk about a specific business thats been very much the focus over the last 24 hours thomas cook. 150,000 british citizens outside the uk needing to be repa treuated the government will be in large part financial for that both financially and practically. What do you think should happen to Business Leaders who preside over businesses where this kind of situation ends up being this is a tragedy for the people who struck the broad deal and the costs for many thousands of employees of thomas cook. The issue people are asking this morning is given the government is essentially on the hook for a large amount of costs of getting people back exactly what you expect, could they have got a better deal by in some way keeping thomas cook viable by some equity stake. I dont have the Financial Information required to look at that but we would have considered that if that was possible what i would also want to know is frankly how has that business been run is the Pension Scheme fully funded what is the renumeration been to senior directors because of the Brexit Process and the effect on sterling and the uncertainty probably people deferring their holiday decisions but ultimately we have to know was everything done to keep this business viable . And has the way its been run correct but the costs you have to look at what the best deal would have been for the british taxpayer. Whats your message whats the labor partys message to ceos in charge of businesses in the uk that might be facing head winds because of brexit, because of the currency when it comes to their responsibility to their employees and to their customers . We appreciate theres a great deal of uncertainty. We are genuinely trying to end that uncertainty i think an important thing to say is, the volatility thats driven the political situation in the uk, unless a Political Party addresses some of the underlying resentments and causes of that volatility, then this instability will go on. We feel what we say in terms of low pay, poor infrastructure and inequality in particular were offering a real answer to that unless a Political Party does that, the kind of stability and certainty businesses need and which they want wont be possible we ask them to work with us to develop those plan we appreciate there is a lot of uncertainty, but we feel what weve done was with ending the possibility in the shortterm and giving the clear way out is the best way forward. Thank you for your time this morning. That was jonathan reynolds, labor partys spokesperson when it comes to the city of london joining us here at the conference in brighten. Thank you very much for that. I just want to pick up on some of the developments around thomas cook and this relates to turkey we have been hearing from the Turkish Federation that says thomas cooks collapse could mean 600,000 to 700,000 fewer tourists in turkey annually which is a huge hit to the tourist industry in turkey if nobody else steps in to fill that void. Currently 45,000 tourists from the uk in europe are in the country via thomas cook. The company has debts to pay small Turkish Hotels some of the developments over the weekend, watch for those there was a push over the weekend for some of the turkish banks to clear up their bad debts to force losses to the tune of about 8 billion in bad loans. So going to say if you look at the Banking Sector and the cleanup taking place, one industry thats now under pressure as it seems to have some of its Credit Facilities or debt repaid and to sure up some of its own business. One to take a look at so far this morning youre not seeing the implications which is trading stronger to euro and the dollar. Euro on the back foot because the developments around the German Economy across the eurozone the pmi data has shown the weakness were seeing there. Lets push on the German Government has unveiled a slew of new environmental policies. The pack anl includes a hiked Carbon Emissions tax, expand Renewable Energy resources and subsidies for electric vehicles. Economists hoped the package 54 billion euro cost would represent a departure from germanys fiscal prudence but the government says it remains committed to its balanced budget policy berlins measure to cut Carbon Emissions were largely welcomed. However, industrial associations such as the federation of German Industries says the government must spell out the packages impact on competitiveness and investment environmental groups have criticized the measures for not going far enough the German Economy contracted in september according to the latest flash pmi data from market the composite index tumbled to 49. 1 which is the First Reading below 50 in more than six years. Manufacturing saw the sharpest decline since the Global Financial crisis back in 2009 sinking to 41. 4 while the Services Index also hit a ninemonth low joumanna is in Goldman Sachs corporate conference in munich following the developments i want to start with what we saw friday first up where we saw this package of Environmental Initiative that seemed to have confused industry already dealing with the complexity of a trade war and a cleanup around emissions. On top, we have had confirmation of some of the data that theres a deep weakness in manufacturing spilling across to services now. Whats been the message on the ground in reaction to the survey data good morning, karen with that new Green Package that was announced on friday, the few people i have talked to have been a little underwhelmed by the overall size even though they said its moved in the right direction. The weakness with the data coming in sub 50 and very happy to say i have the ceo of murk with me here such an important time for the German Economy i just want to go back to the data that came out of the pmis this morning suggesting that manufacturing is still in very dire straights right now for the German Economy and having a knockover effect in services as well how is that affecting an industry like yours . Well, these are big data obviously. I hope they will provide a wakeup call to city Decision Makers and politicians obviously we need to tackle issues such as climate change. We also need to put the economic on the agenda. We generate 6 of the revenue in germany and were active in highly specialized, highly innovative businesses such as health care, life science and performance which are much more resilient visavis large Economic Trends compared to other industries so were in businesses that are much less cyclical and much less affected by these effects. Have you been affected by the trade war insofar as the supply chains are concerned to a minor degree a healthcare business has had no effect yet. We have seen our life science business that have a minor effect but its president at nbc that in the Semiconductor Space trade war u. S. China that this creates uncertainty and were working on adjusting our supply chain. So lets talk about that because youve recently made a very big acquisition big announcement is that youll acquire versom you bid aggressively and raised your offer price what was it so important for you to acquire we like the business very much we have been present in the Semiconductor Materials market you know that data growth is exponential in the world and if data grows, then theres growth for sensors, for logic chips, memory chips and materials play a growing role in this area. So, we wanted to try versa materials because its a very attractive target and completes our offering we talk to our major clients and Major Players in the semiconductor industry, intels, samsung, apple, google just to name a few i think theyre happy about having partners like us in future who can support them in innovation in this highly competitive market. In many ways its a bit strange for Life Science Health care company to be getting involved in the Semiconductors Business weve done that before, yes we have a strong Business Performance materials. We have been a leader for quite some while for instance, we are basically the inventor of liquid Crystal Technology that almost everybody uses in their television or their mobile phone we have a leading position in oled materials and we had over the past seven years or so you have major acquisitions to also make us a player in the highly attractive Semiconductor Materials market so its not new to us. What about your Core Health Care business . How is the pipeline looking there into the future . We have a strong pipeline we just currently launched two new products a product in oncology Cancer Treatment and in other medication in multiple sclerosis and we have a strong pipeline both in oncology as well as in immunology and multiple sclerosis. Fairly up beat on that. Were getting very close to october 31, which could be the brexit date, it could be a hard brexit date, no deal brexit date nobody knows at this point how would a hard brexit affect a company like yours hard brexit we think were prepared for that. I was president of the European Pharmaceutical Association until recently and been involved on this topic and advised all my industry colleagues to prepare for a hard brexit every month 45 packs of the medicine from the uk to the eu so just imagine if theres a major disruption if patients dont have access to lifesaving medications. We prepared for well for that. Its sort of a whole bag of small steps. We dont like the idea of a hard brexit, but we think its our duty to be prepared. My political advisers tell me that proceed yurly its still not going to happen. Thats a personal opinion, of course thank you for taking time to chat with us karen, as you were saying that was the ceo of merck talking about the challenges for the pharmaceutical industry but looks like theyre immune to a certain extent. Thank you for that, joumanna. Well talk about the impact of negative yields too for the economy as the bank for International Settlements warns the acceptance of negative rates is, quote, vaguely troubling more after the break do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Youre watching street signs. The bank for International Settlements warns its troubling. The amount of bonds trading at negative yields increased to a record of more than 17 trillion, which the Central Bankers Bank says is equivalent around 20 of global gdp their also concerned about negative rates speaking exclusively with cnbc saying the cons are starting to outweigh the pros. Definitely Central Banks look at negative Interest Rates and the experience say the side effects are starting to benefit. Especially this medication is applied for a long period of time thats the point of where we are. You look at the european environment, the new round of easing measures involve not just a further cut of Interest Rate, it actually was a relatively small cut from minus. 4 to minus. 5 . Right. It was a small Interest Rate cut but it involved a new round of qe that is not time barred, so almost unlimited over time. It will at some time the ecb will give some signal of exiting this policy, but thats some years out. For the first time they tied the rest of the policies to being closer to the inflation target i dont expect european Interest Rates to change any time soon, in any case not jobeyond our projection of 20, 21 this will lead to big changes to investor environment because whats in the past you could expect to wait it out. You cant rate it out now. Im curious about your thoughts as to what Christine Lagarde will bring to the ecb that will be different from mario draghi. I knew her for many, many years and when she was at the treasury in france i think she has one distinguishing feature that she played very well for all her tenure at the organization shes an incredibly good communicator in terms of communication, she is somebody that can communicate with people. So far Central Banks have largely focussed on market so they were good communicators to financial analysts and markets. Mario draghi with whatever he takes is exactly focussed on this market communication and basically telling the other side of the table the traders were not going to accept, and we have the deeper pockets, believe me christine but the communication towards people has in my view been not as good. If you look in my home country germany, theres a lot of aggravation about Monetary Policy Central Banks have not been able to communicate to a broader audience to the voters that what theyre doing is adequate. Thats where i think Christine Lagarde has her strengths. She will reach out to voters to the people to try to explain this Monetary Policy to people rather than just to markets. Thats in my view something that is absolutely needed because theres a lot of discontent with the current stance of Monetary Policy. When you talk about the discontent, its interesting, the central bankers will say were frustrated with your elected officials. We have been asking for fiscal stimulus and we havent gotten any. Whether its changing, i think what you see is many countries in europe have tried to get under the 3 threshold of the mastery criteria and reduce debt and deficits. Its not really worked in countries outside germany. Now, as germany is hitting a double dip recession scenario, probably 2. 7 surplus of fiscal policy is not the adequate fiscal stance for such equity in the economy. Hbo game of thrones swept the 71st primetime awards. Game of thrones fourth emmy for best drama series plaebag took home four trophies. Trading weaker as the early signal we see enormous risk across markets europe also trading weaker thats all for todays show. Im karen cho. Worldwide exchange is up next. At cdw we get that your it staff is beyond busy. Theyre on the job twentyfour seven so they sleep when they can. [ snoring ] cdw services can help. Our experts will design, orchestrate and manage the most complex technology. 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