One is economic confrontation and the other is expanding domestic Political Partnership just to bring you some gdp data from determine any, the economy there for 2019 has grown 0. 6 thats the weakest sings back in 2013 in 2018, that was 1. 5 the Public SectorBudget Surplus was 1. 5 of gdp. Thats fall evan significantly from the 2018 number which was 1. 9 the forecast in line, 0. 6 was the forecast those are numbers from the german office. This is all about export economy here in germany. We are seeing trade war Overall Economic slow down challenges when it comes to auto sales all weighing on those gdp numbers which forms the backbone of that heavily focused number my colleague is in frankfurt this morning and can provide more context annetta. Reporter actually, that is bang in line with what we were expecting for 2019 from germany. What you are saying, those factors are still there. The trade war is not going away. The structural changes are not going away the question is whether the german economic model is adjusting to the new reality faster than people had expected. There are some signs that this is actually happening. Looking at the kind of industry, they are doing more in terms of investing in huge amounts of money to be ready for the future autonomous driving i guess this is one promising sign overall, one has to say it is a global decay that comes close here for germany germany was the main beneficiary from the low Euro Exchange rate, Currency Union and also glenl trend of globalization we all know that has scaled back that is a big problem for the german Economic Outlook. If you sum up import and exports, it makes up 90 of german gdps it is the most open economy in the industrialized nation. Compare that to 27 for the United States and that tells you the whole story why germany is overnegatively reacting to professionism as such. Those figures will not go away for 2020 perhaps on a lower intensity that could be a positive sign for 2020 Going Forward the outlook for 2020 is a bit more benign for the german Economic Outlook there is some hope also for more fiscal spending, especially in the green tech area. There are rumors that the german chancellor is preparing some green deal with Huge Investment volumes which could also Going Forward help the German Economy grow more. Clearly, the backbone of the German Economy producing a lot of industrial goods and where flooding the world do face fierce competition from chinese competitors because they are clearly producing better quality from 10 years ago. I guess there are many head winds for the german model Going Forward. The question is whether German Companies keep on innovating what has been the tradition in the past and be better than the competitors also Going Forward the next question is whether we get more spending internally also from the government which could boost them as such back to you. Thank you for that live from frankfurt. We take a look at how the european markets are performing. Overall, you can see they are very slightly in the red we saw the s p and nasdaq ending down yesterday and the dow failing to hit a fresh record close. You can see that slightly reflected so far in this mornings trade in europe. Perhaps some uncertainty as investors await that signing of the preliminary trade deal between u. S. And china looking at the markets individually, the ftse 100 relatively up. The dax is down. The cac and ftse mib down as well looking at sectors, you can see the auto sector heavily in the red this morning, down more than four fifths of 1 . Weighing on china are not going to recover quickly as some of those might Hope Health Care one of the strong performers the euro is a dollar, that number there 6. 8874, one of the concerns in the u. S. china relationship has been on that cross there. It has weakened since it hit that peek back in september. U. S. And china are set to sign this trade deal later today. Steven mnuchin said washington will maintain tariffs until more agreements are completed if they move quickly, he said President Trump might soft enthose. We have more on what is to come on the signing set for today reporter good news, bad news the good is obvious. We are counting on the signing later tonight asia time of the phase one deal in washington, d. C. The bad news is the treasury secretary mnuchin today said there will be no roll backs of tariffs. Take a listen. These tariffs will stay in place until there is a phase two. If the president gets a phase two quickly. If not, there wouldnt beany tariff relief. It wont have to do with the election well be stuck with the exiting tariffs but i guess they are not going up the next 10 or 11 months or so until we get to or past those november elections. In terms of the reaction from beijing, nothing official. They would have preferred tariffs had been rolled back experts said, look, beijing is very familiar with the trump playbook and his use of tariffs as leverage and tool, even a weapon to get the other side to comply with what washington wants in this case conditioning their behavior so phase one we are about to get signed in a couple of hours, there is included in it, a snapback provision if china does not meet the promised made, the u. S. Has the right to impose extra penalties on beijing which could come in the form of higher tariffs even as we are talking about phase one and treasury secretary is warning the tariffs may not be rolled back, there is the outside risk that even under phase one, tariffs could actually go back up. Reporting for cnbc, be in joined by the chief strategist this morning. From what you know so far about this preliminary deal being signed later today, is this anything more than a glorified truce . It is perhaps a stepping stone to more than a glorified truce. I think just having a glorified truce and reduced risk of heightened conflict in trade would be helpful from what we know, based on reporting that there are claims that china has promised to buy 200 billion of additional imports. There are reports that this breaks down to 80 billion of manufactured goods, industry and Farm Interest too. Thats what we heard from the media and also believed that china has pledged to change some of the ip protection in line with the reform policies already. On the other side that the u. S. Will lower tariffs but only on a very small part. 110 billion worth of imports which have 15 imposed last september. Senior u. S. Officials, mnuchin yesterday was saying the remaining portion of additional tariffs on chinese imports will not be lowered, certainly not initially. I want to pick up on some of that phrasing. Do you expect to see the details announced today. If we dont, does that matter . I think we will see some details. I think well probably get some headline figures from the u. S. We already got a printout. We probably wont see the details on what china is meant to be buying in detailed areas for example of energy and those kind of things it does matter it matters in two ways such Sensitive Information could affect prices in markets and businesses second, if there are promises within the agreement that have not been released, those promises might be sensitive and might constitute breaching wto rules. A country is not allowed to say we are not going to import lets say soybeans from brazil we are going to prefer to buy soybeans from the u. S. That is consistent with the global trade rule signed up for that country that goes with keeping such clauses in the tafr. As eluded to yesterday, it doesnt seem like that would have a massive impact on the sentiment. Is it there for from your perspective all about business and market sentiment, this deal. I think that is largely true on the u. S. Side. On the u. S. Side, Consumer Sentiment is perfected by trade risk and also slowing economy. For example, in Large Purchase items, one for why auto sales were weak last year were related to weaker concern. Reducing that a little bit could help to support the stabilization of the market in china, particularly the electric vehicles thank you for that. The chief strategist at everybright. We are expecting to hear from vladimir putin, hes talking to the russian lawmakers in his annual address if we get any news from that, well bring it to you when we get it meanwhile, britain, germany and france have triggered an agreement as part of the Iran Nuclear Deal three of the nations that signed up have formally accused tehran of violating the agreement iran continues to deny that it continues to develop nuclear weapons. We have this report from abu dhabi. Reporter the decision by the three european signature tories to the deal may be the final undoing of this obama era agreement. Despite want tofg safe the deal or the jcpoa could result in its demise basically, theyve made this decision because they say irans growing violations cannot be left unanswered. It says it is entitled to do so following that u. S. Decision to abandon the deal and reimpose sanctions. Triggering the dispute will take this to a minimum of 15 days to resolve the issue. It will be referred to the Un Security Council iran has responded this decision is legally baseless. Russia has condemned the move. It seemed like the United States is still in the drivers seat here President Trump has little incentive and little appetite to create a new deal. This issue is probably going to stay unresolved for now. Cnbc, abu dhabi. Looking at the currency markets once again the dollar is at 6. 8873. Significantly weaker compared to the weakest point back in september where it was well above that important seven mark. Janine Ghostbusters . Of course id love to take an informal poll. I used to be a little cranky. Dealing with our finances really haunted me. Thankfully, i got quickbooks, and a live bookkeepers helping customize it for our business. live bookkeeper youre all set up janine great hey you got the burnt marshmallow out delivery man he slimed me. janine tissue . vo get set up right with a live bookkeeper with intuit quickbooks. The easy way to a happier business. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. Welcome back to street signs, jeff bezos has been talking about Climate Change on a visit to india he said anyone that does not acknowledge the reality of Climate Change is not being, quote, reasonable. He is working alongside other ceos and polarization threatens leaders when it comes to their ability to tackle these things walking cnbc through the details. Environment concern has been growing over that period this was striking to see the top five there where you have extreme weather plus our failure to adapt to Climate Change or call out the risks the new area that has been rising has been about biodiversity loss and its direct impact and intersection with the climate. A lot of our attention has been sharpened based on the australian bush fires that has led to a devastating loss of life, biodiversity effects families being decimated and the damage of land these type of events, are they being flagged as something to watch out for as things that could happen more in the future . Absolutely. The australia wild fire is probably the most visible example. But also wild fires in california this year, in europe. You have polar ice cap melting faster than anticipated and creating high risk for coastal population with respect to flood. Is there concern about the policy reaction and response that these type of events entail we are seeing increasing action but not enough to get to the paris accord do you think there is enough concern policymakers are not doing enough absolutely. Also on the private sector to act and the concerns of the private sector with the Public Sector reaction to regulation and other policy changes that may impact the business sphere theres a lot of focus on this changing pressure. Dont miss steve sedgwicks interview with borge brende at 11 00 a. M. Central european time also blackrock founder has sounded a risk and written a letter saying, quote, Climate Change has become a defining factor in companys longterm prospects. He said the risk in Climate Change will dwarf any other crisis hes seen in his career it was a hard letter to be written. More importantly, my reflection on 40odd years on being in finance. I was thinking about all the crises ive dealt with in my career it is very clear to me the physical changes we may see with Climate Change are more po permanent. We dont have a Federal Reserve to stabilize the world like the five or six financial crises ive seen. This is bigger and requires more planning and more public, private connections to solve these problems i do believe many of these could be solved but the actions have to begin now President Trump has attacked apple on twitter he said the tech giant refused to unlock phone handles used by criminals, drug dealers and other violent criminals. Apple refused to open the iphone used in pensacola, florida the u. S. Passing a new rule to increasingly block ships from huawei officials aim to bring that down to 10 but only on exports to huawei im happy to say the chief strategist of everbright is still with us in studios wont the squeeze on huawei, wont that make it harder for the chinese to hit the kinds of import levels that seem to be required or this preliminary trade deal in terms of manu fafacturing goods. Sure. It is increasing as china builds up 5g. Now the devil is in the details. What we are hearing is that they are targeting huawei that is one of the giant telecom makers but there are many other companies. It is possible that u. S. Could export Less National security sensitive product and Companies Put to china thank you the chief strategist from eve everybright. Welcome back to street signs. Im willem marx in london. Europe tracks wall street and asia lower as the u. S. And china prepare to sign a preliminary trade deal and mnuchin says tariffs will stay in place until a second phase gets to if the president gets to phase two quickly, he will consider that in phase two nothing to do with the election or anything else no secret agreements germanys 2019 gdp grows at its weakest rate in six years, the slow industrial sector is likely to reach a turning point soon a deal disintegrating, european powers trigger a formal dispute for irans compliance with the agreement and failing that that the eu has failed to keep its promises. The biggest shortterm concerns a new area that has been rising has been around biodiversity loss and concerns of the direct impact and intersection with climate. To bring you some data here, the cpi number is out. 1. 3 yearonyear. The lowest annual rate since november 2016. The lowest rate since 2016 for inflation at 1. 3 yearonyear the ftse 100 is up around a fifth of 1 . In germany where weve seen in disappointing gdp data is down around. 14 in italy, it is down around a 10th1 10 0. 1 looking at the numbers tracking the dollar relatively flat the pound significantly weaker perhaps on the back of the cpi number there down around a fifth of 1 . Weaker against the swiss frank lets check in with the u. S. Futures. We can see after that downed day of the first two major indexes they are both looking to open relatively flat. The dow jones failed to hit the high to open lower around 20 points in this stage of the proceedings. In new york, the fed will continue to intervene in overnight lending markets until midfebruary beginning the intervention until november after surging 10 following a bit of a cash squeeze. Joumanna is live from london with a guest reporter it seems like the focus this year has shifted away from what they may or may not do with Interest Rate cuts and the Balance Sheet expansion. It is great to have you with us on this show one year ago, we were standing in this position very different set of circumstances then no one anticipated they would go on to cut Interest Rates three times. Guessing what the fed do is a bit of a game. What have you got for 2020 last year was a big surprise for us that they moved to cuts it is now said basically staying on hold a quarter of a percent for the funds rate our forecast is not too similar under our forecast, there really isnt any need for them to cut at the same time inflation is 0. 4 below their target and would probably need to see the twohand escalation. I started off by referring to the Balance Sheet. Many people are associating these repo operations. Even though the fed have pushed back on that particular plan is it fine tuning of money market or something essential to the policy transmission . I wouldnt say it is not essential. It is important to actually hit the target and keep the funds rate in the 1. 5, 3 range. That wasnt the case back in september. In september, they found that the level of Bank Reserves had shrunk too far and that was impinging on the implementation. It is a technical issue. It is not qe in the sense that they are not buying longterm bonds or mortgages or credit it is narrow but essential because they do need to be sure the funds are actually where they say they will be. Lets talk about growth. Looking back to last year, the major highlight was Consumer Spending can that continue into 2020. Do you see any potential in investment of cap x to pick up as well . There is a split between the consumer, very strong. Business investment, much more subdued. The fundamentals for the consumer are very good the growth of real income is strong jobs still growing average Hourly Earnings are picking up wage growth that is high, Financial Market has done well 2. 5 plus is reasonable estimate Business Investment has contracted in the last several months we think that probably goes to stable, slightly positive numbers but i dont think well have a major bounce back in Business Investment. The it is an election year, we could see a little caution persisting to 2020. Would you have potential for growth this year we are at 2. 2 of annual average. We have a gradual acceleration of 2. 5 one of the other big topics of discussion was recession, recession, that will happen. Recession is coming. Do you see any signs of recession. What probability do you have factored in . We think it is pretty unlikely in terms of numbers, id say 15 or so. That is below the consensus view weve been on that side. The consensus of forecasters says 25 to 30 of the latest surveys. Our view is that it is unlikely. Those balances are just not really visible oil shocks it is obviously possible we get volatility in oil prices but the u. S. Economy is much less sensitive because it produces oil to inflationary overheating. Three is financial asset bubbles that burst and there by undermine consumer or business spending we dont see that because we have this lowering boom we have prior to the last couple of sessions looking ahead, i want to bring you some comments ben bsad that cutting Interest Rates further is still a potent tool box for the fed. He implied that quantitative easing is a possible do you see them leaning more on Balance Sheet expansion in the future rather than Interest Rate cuts sure. If we were to see a recession at some point in the next few years with Interest Rates close to where they are now, then you would only have 150 basis points or so for conventional Interest Rate cuts. Thats only about onethird of the typical reduction and shortterm Interest Rates. So you have to rely on other tools. Forward guidance is part of that that is something they didnt really used to utilize in past cycles i think it is helpful. Qe is likely part of the equation again then there is a debate whether they should go to the negative territory along the lines of central bank there is a lot of skepticism in the u. S. They would utilize other tools first. That said, several years down the road, that could evolve. Depending on what we would see in other plays like europe that would be on the effectiveness of that tool but they would need to rely on other tools as said. Something to worry about. Thank you so much. The chief u. S. Economist at goldman sach that wraps up our coverage today. Ill hand it back to you thank you i know youll be tweeting that out. If you want to get in touch with the show, do so on street signs and coming up on the show, a tale of two banks. Jp morgans Fourth Quarter leads the giant to the most profitable year ever and wells fargo puts out a report to forget dont miss the interview with wef president happening around 11 00 a. M. Central european time im really into this car, but how do i know if im getting a good deal . I tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if im getting a great price. This is how car buying was always meant to be. This is truecar. Looking to get your business off to a fast start in the new year . Its go time switch to comcast business and get fast internet on the nations largest gigspeed network. Plus, complete reliability with 4g lte backup. And, cloudbased security to help protect the devices on your network. Greenlight your business in 2020 with fast internet and voice for 64. 90 per month. Switch now and get a 100 prepaid card when you add comcast business securityedge. Call today. Comcast business. Beyond fast. Welcome back to street signs. It has been a strong start to earnings season from wall street with jp morgan and citi beating forecast reporter three take aways. December was stronger than expected in fixed income and currency trading and debt capital markets. Two, pressure from lower rates continue to have less impact and three, wells fargo, ouch the first for jp morgan, 3. 4 billion versus 2. 6 billion for citi, it was 2. 9 compared to a 2. 4 forecast here is the chairman and Ceo Jamie Dimon linking it up. Obviously a lot that has eased up a little bit. You could have potential joongon trade issues with china. Because that got better, how long that continues, we dont know Net Interest Margin feared and loan growth solid. Citi set their 2020 return on 12 to 13 having hit 12. 1 compared to jp morgans 19 , 17 in the final quarter. Wells fargo overall missed expectations largely due to higher expenses and largely due to soft fee income struck a very down beat tone and other shares that traded higher on tuesday bank of america and goldman sach wells fargo cfo blamed low Interest Rates for the decline banks continue to experience effects from its fake accounts in which employees created millions of false Bank Accounts to meet quotas there is a level setting of how long it will take, at the same time, he gave early observations on the power of the franchise, on the people hes met, the relationship with customers, on our quarter, we are growing customer accounts, loans and deposits grew. Getting that right and all it costs to do that to make sure we live up to our own expectations is absolutely his first order of business i think he was clear about that. Im happy to say analysts join us now. Asking you about wells fargo to begin with there are huge charges related to the litigation. Do you think the banks management has done enough to communicate the turn around strategy. It has been a long process. Weve lost one ceo we asked that question on the call yesterday he couldnt really elaborate that does seem to be the view. Do you feel you have a grip on what theyve done to the assessment of the future management themselves have said in the early stages of the review in the time frame of where that will come out he says they are looking to try and be best practice of all of those efficiencies in which Business Units they might divest they are very much in the dark at this stage. Moving from jp morgan, what are they doing right in your view, how much of that is down to the strength of the u. S. Consumer versus some of their Trading Operations i think jp morgan has a strong move across the board deposit growth are developed up to 5 showing the strength across the u. S. As well. Showing the mitigated impact only one quarter decline credit quality remains very good too. Youd have to say, jp morgan performing very well because of what theyve done and helped by the consumer they do have the same consumer but isnt performing as well more of a quarterly exposed bank what does that tell you about the global consumer. I think that that is performing well in mexico, they had a bit of recovery thats been a little less convincing still growing midsingle digits that is quite healthy. They have multinational franchise as well. That will help their trading revenue on the fixed side. Similar to jp morgan on that side when you look at that, do you think would your advice and analysis indicate in three months from now, would created performance in all of that work. From a seasonal perspective, q 1 is the strongest quarter you wouldnt expect such a strong q 4 next year in 2020 you are being cautious there having said that, if you get a thor in the u. S. china trade relations. That will help as well dont forget, they are also taking market share from the banks. We expect that to carry on in those businesses what is your big take away from what youve seen . U. S. Consumers continue to do very well. Well see upgrades, partly on the growth probably more so on the provisions side. They are seeing the better quality. That should give better quality and you should see some upgrades from those do youexpectto see anything different when it comes to goldmans performance and bank of america expect them to have pretty strong numbers in that space i would imagine they would be surprised on the upside today. Looking at the consumer franchise with 31 in the last quarter. Bank of america is similar very good cost control and strong earnings growth, i would imagine that side of things, expecting good results from both of them. What arguments do you put forward not just in the last few months but last few years. Weve stepped back from the crisis and how theyve addressed the crisis in the first place to make sure they are capitalized quickly and paid back quickly and off to much safer footing. If you look to the european banks in 2012, a lot of concerns around capital and they continue to be some what capitalized and they look to rebuild 10 years after the crisis if you look at that from the financial strength perspective tharks allows more in businesses, they will allow more in defense as somebody pointed out, the top banks in the market in all of the u. S. Thank you for that. U. S. Financials at Atlantic Equities bank of america and goldman sach up next blackrock also releases its latest numbers before the bell and separately, it was a mistake. Joe biden said he should not have voted for the iraq war. Candidates spared with senator sanders over Foreign Policy. Sanders called the Bush Administration 2002 decision to go to war with iraq, quote, the worst Foreign Policy blunder in u. S. History adding last minute evidence to President Trumps impeach case including phone records and documents from florida businessman and his role setting up a meeting with giuliani and the president of ukraine im happy to say tracie potts joins us live now from washington how important is the delay when you look at the idea that new evidence could get introduced to the senate trial that wasnt available at the moment the house voted for impeach . How important is the delay . Probably not significant once the case moves to the senate, the focus is going to be, are there any witnesses and how do they consider this new evidence, the evidence from the giuliani associate that the president was very directly involved in this Pressure Campaign on ukraine. We now know the trial is expected to start on tuesday theyll take care of swaring in senators and jurors next week. The official transfer of the articles and the naming of the house managers happens this afternoon. That is significant because the house managers are essentially the prosecutors that will make the case the big question is will there be any witnesses in this trial republicans have resisted that saying the fact finding is the job of the house of are especial representatives. The plan is for them to wait until after Opening Statements to make that decision. Thank you for walking us through that complicated tight rope live for nbc news in washington. Lets look at u. S. Futures before we go a bit of a soft open for all three markets. Dont miss the interview coming up shortly thats it for todays show Worldwide Exchange is up next. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. It is 5 00 at cnbc Global Headquarters here is your five at 5 00. A big beautiful monster. President trump says hes set to sign this highly anticipated phase one agreement today. Release the bulls. A bold new call this morning from bridgewater that may get gold bugs buying up. How elon musk is inching closer towards locking in on one of the largest bonuse