Expires and the bank sees a dismissal of charges. And going higher, they do not expect to incur any losses good morning, everybody. It is december 11th, two weeks away from christmas and perhaps a snowy monday to be expected. Lets take a look at how markets are doing this morning so, asian indices were firmer overnight with nikkei with another strong session up more than 5 . And of course, last week we also saw u. S. Equities end the weej a smidgen higher new highs posted for dow jones, the 65th record close for 2017 the picture in europe looks a little bit firmer this morning, trading slightly above that flat line lets switch to indices. Of course, this is a big week for indices. Weve got lots of Central Bank Meetings coming up, the fed, of course, but above and beyond that, weve got the bank of england, ecb, not really expected to do much this week in terms of decisions, but as you can see, the picture looks fairly safe for the italian index, ftse mib, which is struggling a little and down 0. 1 lets look at how the sectors are doing this morning as well you can see up 5 , bank continuing to perform strongly after very strong week last week, up 0. 5 . The laggard this morning, technology telecoms, again, in line with recent performance, struggling a little bit with some of the announcements that came out across the pond with regards to u. S. Tax reform, but well get into that a little bit later. But one of our main stories today is about bitcoin the Bitcoin Futures have surged after launching on the cboe overnight, at one point jumping more than 20 . Demand was high, prompting the cboe to warn the websites may be temporarily unavailable. It triggered short trading halts, in line with Exchange Rules during sharp price movements. Users hope the launch will help legitimize the currency and attract larger Institutional Investors. The launch of futures may have sent the price higher, but bitcoin prices may vary depending on where theyre traded dominic chu reports. Reporter there is no centralized trading or consolidated tape that tracks all of the transactions across all exchanges and posts them, unlike the stock market we deal with every day this past week, we saw coinbase show prices at record highs, above 19,000 per bitcoin. Meanwhile, coindesks average highs showed just above the 17,000 mark on that same day. Coinbases platform shoulders a lot of the volume for bitcoin trading. Its based in San Francisco and is popular among many retailoriented Digital Currency traders here in the United States prices of bitcoin on coinbase have been higher than other exchanges, at least in recent days another San Franciscobased exchange is crackin, which is one of the bigger volume exchanges when it comes to trading in other kurnsiony like euros or Canadian Dollar and ukbased bitstamp trades not just bitcoin, but other cryptocurrencies like ripple, bitcoin cash, et cetera. A lot of these platforms trade different currencies each platform has its own, different nuances. And forget everything youve heard about a. M. Ninonymity whet comes to trading bitcoin those that are most established will do something called kyc, or know your customer the accounts will in some ways need in many cases name information, address, bank information. Some even want photo i. D. S and proof of residency they may even require tax identification numbers if youre doing a lot of trading so its something to watch out for and remember to check and see what those differences are between all the different kinds and locations of bitcoin and other Cryptocurrency Exchanges for cnbc business news, im dominic chu. Now, south koreas finance minister has said he is in talks with the relevant ministries on the regulation of bitcoin trading. The move comes as the cryptocurrency draws in a greater number of retail investors. The south korea Prime Minister recently warned that bitcoin could push young people into illegal activities now, ben gutter yij is joining me on the show good morning. Good morning. On the subject of bitcoin, it feels as though the advent of the futures has facilitated participation from Institutional Investor sides as an investor, how are you thinking about not just bitcoin, but the cryptocurrency complex as a potential asset to investment in the future well, youre right, the Futures Exchange will legitimize it as an option for institutions, so we must work hard at understanding the fundamental drivers and how to value it, but at this stage, its very difficult to get our models together that are going to determine what is the fair value of this particular cryptocurrency, bitcoin. So at that juncture, at this stage, youre really buying into the idea that there is to a degree a frenzy and that other people are going to buy it off you at a high price somewhere down the line. Dont you think the Actual Technology of Digital Currencies is going to be with us clearly, there is an appetite for it theres been a lot of demand for bitcoin. Some of it is on the back of speculative demand and speculation that the prices will continue to rise, but also people are seeing it as a storage of wealth value somehow. I think it is seen as another storer of wealth amongst this sort of period of extraordinary monetary policy, but at the same times, there are lots of regulatory uncertainties out there surrounding this currency, how its going to be treated at a taxation level, which providers are going to accept it as a means of funding for a transaction. So you know, there is a lot that needs to be worked on. At this juncture, its pretty clear from the price chart alone that buying into something speculative now, it doesnt mean it wont go any higher, but fundamental analysis isnt dominating the bitcoin price at the moment. One thing that does come up a lot and that will probably last with us is the technology that underpins it, the Blockchain Technology and what youre seeing is increasingly numbers of banks are introducing Blockchain Technology youre seeing different firms introduce it as a means of recording transactions in a ledger format and in a format thats essentially immutable when you think about blockchain as separate to bitcoin, is that not an area that you would look to invest in, given that numerous types of investors are beginning to look at it as something thats going to be with us for a very long time no, youre quite right. The technology is grounded in something really quite structural, and im sure that it will prevail, but the investment choices, need we necessarily go straight into the most talked about cryptocurrency at this juncture i mean, some of the banks would be able to harness some of this technology, of course. Many of the Tech Companies that are already out there are going to be beneficiaries of the cryptocurrency proliferation and of course, many businesses themselves that will transact in the bitcoin will be beneficiaries. So, there are many ways to take advantage of technological improvements, and of course, the growing use of cryptocurrencies. The most speculative elements need not be the ones we encourage clients to pursue at this juncture. Deutsche bank has warned bitcoin rates could pose a real risk to the Broader Market next year for more on that, head to cnbc. Com. Now on friday, the u. S. Added more jobs than expected in november with 228,000 extra people on the payroll. The Unemployment Rate stayed at 4. 1 , holding at almost a 17year low. Speaking to cnbc, white house economic adviser gary cohn said the Trump Administration is concerned about the lack of wage growth in the economy. It feels like a good number to us. Well continue to grow jobs. If you look at whats going on in the manufacturing sector, thats a sector that you know President Trump cares a lot about. Were at a 17year low in manufacturing at 2. 6 unemployment were continuing to drive people back into the labor force, but as you point out, were still not growing wages in this country. We do believe that tax reform will help us drive real wage growth in the United States, which is something really important for the administration were just not seeing that. No. Wages up 2. 5 , labor unit costs earlier in the week. When you talk about wage increases, over what time period and on top of that, when the president talks about growth going to 4, 5 or 6, is that something you think is in the universal of possible . We know American Workers once this tax bill is passed, theyll start seeing their paychecks change early next year when the withholding tax charts change, so theyll see a change in withholding tax. Then as the economy continues to grow and we bring more businesses back to america, well create more competition for labor, so well continue to see more wage growth over the next cycle, over the continuation of the next four or five years of this cycle so we think we are in for a long period of wage growth, starting the beginning of next year, which is something we havent seen for the last eight or ten years, and thats really important to us. I wanted to follow up on something you just said. You just said big business will come back to america as a result of the tax cuts reform i understand why we might stem the tide of those wanting to leave and the move to a territorial system as well, important there, but why do you think theres going to be any that actually come back . Well, look, when you look at the competitiveness of america, were not competitive today. Weve got a 35 worldwide rate when youve got a 20 territorial rate and youre looking to invest capital, the first thing you look at when youre making a Capital Allocation decision is your aftertax rate of return were now going to have an aftertax rate of return that competes with the rest of the world. Its going to make us competitive again. Its not just big business if you look at the nfib numbers this week, optimism in the small business, in the passthrough business, is at alltime record highs as well, so Small Businesses are hiring as well because they see the growth in the economy. Right go ahead. To your point, we keep asking ceos, what would you do with the potential tax benefit. You were at a wall street journal conference where john busy asked ceos to raise their hand very few did were getting buybacks from home depot and timo and bank of america. Is that what its going to look like i think were going to see a combination of everything. I think youre going to see a lot of Capital Investment as well i was at a big meeting this weekend with a lot of Business Leaders from all size businesses, and they were all very excited about the opportunity to grow their businesses were seeing a lot of applications for permits through the system to expand and build businesses look at whats going on in the l g business, look at whats going on in some of the other businesses where you need government permitting. Weve got a huge backlog of permits. When those permits get granted and this administration is really expediting that permitting process, were going see enormous amount of capital and job creation in those areas. Now, Ben Gutteridge is still with us. Ben, going into this year, many people were positive on reflationry trades and many people expected this year, 2017, to be the year that inflation makes a comeback hasnt quite happened. Do you think it will eventually happen do you think 2018 is going to be the year of reflationary trades . Well, i think perhaps in the first half as we move into 2019, theres a lot of reason to think reflationary pressures can build. The labor markets are clearly tighter than where they were 12 months ago the dollar has been weak, so that should be inflationary, certainly, for the u. S and also, we have this tax hike thats seeming im sorry, the tax reform, tax cuts, that are seemingly going through as we move into the new year and with the Global Economy in decent shape, perhaps better than this time last year, these are good for growth and inflationary pressure, so we would see these inflationary pressures building, but there are reasons for caution. Theres still secular and structural pressures, downward pressure on inflation, you know, robotics and lots of other demographic issues that have been long discussed. So, with that in mind, do you think next year will be a good year still for equities . I mean, we saw equities this year, like tesla, whatever happened, they kept going up would you still be looking at equities and thinking we get that much of an outperformance going into 2018 . Youre quite right, its been a forgiving year this year, given whats been thrown at the markets. I think ultimately, equities should be rewarding in 2018. The Global Economy is in decent shape. But were also moving from a period of Central Bank Offering very easy policy to easy policy, so that is actually, you know, that is a tightening of policy, even though policys not going to be tight, its tightening, and we think that would inject more volatility into the equity markets. So we would expect 2018 to be rewarding for stock markets because the Global Economy is still in decent shape, but for volatility to pick up as Central Banks take away some of the punch bowl, if you like. Can i ask you how youre thinking of fixed income here . Again, 2017 was a year where everyone had the same view, that reflation would be back and that this would be the year where treasuries could finally sell off to 3 . Were still around 2. 4 . Weve been there for a very long time, almost unchanged relative to the beginning of the year its been a tough trade to hold. What is your view on fixed income and also the Corporate Bond complex, because thats even more interesting, given how tight some of the valuations are in that spectrum as well well, i think youve been almost generous in the question. I think the markets been probably utterly dreadful at predicting where bond yields are going, and on that basis, given that the consensus thinks theyre going higher as we move into 2018, we should probably par back those expectations. I think the core view is they move higher, but it would only be very modest there are some cyclical inflationary pressures, but really, given the deflationary pressures that prevail, as i said, robotics, perhaps labor force that isnt particularly confident enough to ask for wage increases, you know, the amazonian effect you know, we can find prices cheaper online and the Technological Advancements means i just dont think Inflation Expectations are really going to go anywhere out of reach, and so that should keep longerterm bond yields well compressed, and therefore, while its not going to be a great return in fixed income markets, we do not see at all a case that it would be a blood bath in that area. Reading through your notes, i see youre also optimistic on europe going into next year as well i think thats shared by many people looking at the markets. Indeed, many forecasters have revised upwards of forecasts for europe next year, but how do you play it . Well, thats a worry that everyone sort of thinks that, so that is a concern. We would almost sort of say its a year of two halves we see going into 2018 the Global Economy in decent shape, but as those inflationary pressures come through, perhaps Central Banks take away a little bit of that Interest Rate generosi generosity, particularly in china, but some of these growth conditions may be less bountiful. And of course, europe is inextricably linked to merging market demand given its mercantilist nature. Therefore, as we move into the middle to second half of the year, we would expect that european trade to come under a bit of pressure, but were anticipa participating for now. Ben, thank you. Head of Fund Research at brewindolfin, Ben Gutteridge you can email the show or tweet us, streetsignscnbc or tweet me directly coming up, stocks rally and two Companies Work to gather the fallout from the retailing scandal. Details after the break. 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