Takeover by veolia brexit back lash nancy pelosi says there is no chance of u. S. uk trade deal warning britten ain to break the divorce treaty a warm welcome. Lets kick off the show with a look at the markets. Extending gains after the rally. We have turned negative. You can see all four of the Major Regions are trading lower. The ftse down a half a percentage point the dax has turned negative now. The big event for european investors, no doubt that ecb meeting coming out later today and reacting to the turn around we saw in the u. S. Markets yesterday. We did see major indices recoup the selloff. The positive momentum not enough to continue to todays session looking to the break down and the best performing parts. Food and beverage and travel and leisure also rebounding. Noting every sector et cetera travel and leisure advanced. Now one of the better performing parts of the market. Chemical, utilities and auto the worst in contrast are the Banking Sector down about 1 down sharply in focus with the ecb meeting. Weak inflation will be a part of that meeting, looking to hear how madam lagarde looks to frame. Oil and gas down, basic resources and telecoms. Looking at the u. S. Futures after the rebound on wall street nasdaq with the best day since may boosted by microsoft the dow looks to drop about 100 points and the nasdaq to pull back about 90 basis points speaking to cnbc, druckenmiller issued a stark warning over market volatility. Right now, we are in a ragingmania. We have commentators on your network Encouraging Companies to do stock splits and going up 30 and 40 . I think the merging of the fed and treasury, which is effectively what is happening during covid sets a precedent we have never seen since the fed got their independence it is creating a raging rainia and has not spilled over to main street the ecb council will hold a policy meeting amid concerns a stronger euro could pull into a deeper territory madam lagarde expected to keep rates steady instead getting out to annette with a special guest to set us up for todays meeting. Thank you it is a bit of a tricky situation right now. We have more disinflationary pressure that means, thats the only mandate they have to act at one point. This today remains to be scene joined by the head of macro research, thank you very much. We are just saying there is a lot of pressure on the ecb to act today. I dont think we want to do anything today i still love to digest or assess what does the new fed strategy mean and how significant it is to drop it more factors are behind it let me ask you why you think the inflation rating was so low . Thats part of the story. Summer sales and more volatility and coinflation over the next couple of months this is indeed part of the environment. We are in the midst of a big recession recovering the level is slow. We could see more pressure coming through that would imply the inflation changes for the ecb. Lets talk about when will the ecb react. Given what weve heard might be quite clear, right we think in december, theyll announce an increase of purchases again. To make sure everybody understands they are ready and willing to stand in space for the governments to do the heavy lifting. It is much more effective to sustain growth december, they get new numbers and projections and it is a good time to announce that. Speaking of the stimulus, we have to talk italy clearly that debt will skyrocket at some time with a looming Credit Rating downgrade, how much of a concern is it to ecb it is never going to be a concern, of course it is important there is not a spread widening that would impulse to every country at the same rate. I do think it is important to signal to the market even though italian debt will go up 20 or 30 . We stand ready to refinance and make sure any issuances ready, well absorb so probably yields are not going to rise even though there will be more debt coming. Youll see a risk with that all of these to go up and to happen if inflation goes lower, it is hard to see how Interest Rates will rise anytime soon do you think youll do more for the Banking Industry now the second part of the corona crisis coming with more might get a problem. The governments need to respond to that but the ecb should respond to that. It is part of the menu in this banking crisis as it was in 2008, 2009 theyll play its part there do you think that tried to influence the market no. Weve seen interventions in the past it was a concerted effort she will try to talk down later today. Sound dovish and make sure they have met us for the inflationout look if you were to keep rising at another rate cut will be seen to stop the momentum there. Another way to go forward with part of the strategy here but then covid happened. The discussion restarted but it is still in the early phase of the discussion it will be interesting to see whether she shows some sympathy and if this could be something as well. The French Central Bank governor has already said he would be in favor which would be like the new fed strategy, right . The fed has a new make up strategy if it had in the past in the principal, they already have the target that had been made clear you could have an inflation target around 1. 9 or 1. 8 it is not the same of what the fed has done. Do you think the 2 is at question here . Within quite a few that would impose that significantly. How do you think that came out recently, right . I think hes not the same but doesnt see the need at this stage. If the recovery were to falter or change dramatically, they would offer support or it would be a different kind of view. Thank you for your time today. It will be an Interesting Press conference even though it might be ecb talking the talk and not walking the walk as of now december might see more action thank you for bringing us that interview make sure to join us for special coverage offed toos meeting beginning with the ecb set to begin its update at 13 45. Can you follow us on twitter and tweet me directly cnbc julianna coming up, the eu threatens legal action after a british lawmaker admits to intentionally overriding and breaking international law. Offers investors a broader view. We see companies protecting the bottom line by putting people first. We see a bright future, still hungry for the ingenuity of those ready for the next challenge. Today, we are translating decades of experience into strategies for the road ahead. We are morgan stanley. If i could, baby id how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Welcome back local lockdowns cannot be ruled out in france as over 8,500 new cases were revealed on wednesday. The second highest daily number since the pandemic began the eu is considering legal action against the uk for violation of the brexit agreement. The block said it would have clear justification and could bring a case even before it is passed by the parliament the Prime Minister said it is a priority to find a legal safety net. My job is to uphold the interrogate of the uk and also to projekd ttect the northern i peace process. We need a safety net to protect our country against extreme or irrational protocol which could lead to a border down the irish sea which i believe and i believe members would agree would be prejudicial to the goo friday agreement nancy pelosi has made a statement. Going to our reporter. The withdraw agreement, where do we go from here knowing how the uk commission has responded and how they feel about it the tensions between both sides have escalated over the last 48 hours or so. Boris johnson has to answer questions with this internal market as you mentioned, the trade negotiations with the eu are currently at risk. We look at the details made by the government yesterday in that bill, there is a clear override of the withdrawal agreement. Agreeing and legislated the agreement that would allow to pave the way from the eu it says that the data given by the uk government above the threshold that would impact the goods against Northern Ireland and the rest of the eu would have to give approval by the commission this market overrides that and gives the uk government the power to decide not to apply that specific article of the withdraw agreement thats why different lawyers, policymakers as well as the actual government have said that this market will breach international law. In this context, analysts have already changed the forecast and are now expecting the no trade deal lets see what will come out of these negotiations here in london tomorrow, we are expecting to hear from both sides lets see what theyll say today, it is the short term to monitor the emergency meeting happening at lunch time to see where do we go from here thank you for breaking it down do stay with us. First, lets look at the ftse 100 stocks the index down 0. 7 . Right in line with the broader market, which is retreating after the gains we saw yesterday. Great to have you, henry to help us try to make sense of what these brexit headlines mean for the uk markets Boris Johnson altering the agreement with the commission which would violate the law. Youve got nancy pelosi weighing in saying you could say goodbye to a u. S. uk trade deal. How significant are these for the uk hugely significant. I think youve seen brexit as the only issue for the uk now. The asset class has been the most redeemed of the Asset Classes with regard to the under admitting. Id say recent headlines are very easy to make them override the rule of law. Speaking very, very well saying our rule of law and our word are critically important as we go further into this conversation this week, it will be clear that our demands being in and around will make a change to issues that could cause disruptions for the united kingdom. With regard to the trade talks, we could thrust our mind back to the other parties. The best perspective i have for today is when you look back at 2016 wra eu and canada talked about the trade deal then it was all over by the end of the month, it was a signed deal. That will give us reasonably good insight well speculate that this deem is 100 off. That is actually reasonably close to 100 as well. A large few weeks and as active managers, we need to be on top of and ready to look to opportunities. Good morning. You mention that episode from back in 2016 if what we are watching here is just negotiating tactics, what does that mean for the near future i think youve seen it unfold weve had a very difficult back drop there is a makeup that has worked against it via oil and markets. These are uncyclical things. Some of the fantastic market franchises we have listed here in the uk in financials and Consumer Staples are unusually cheap. Youve seen the discount baked in you can compare it with international and our guys just trade really, really cheap by the middle of october, you could have open clarity. It comes in two forms. If you need to move on, you must move on. Either way, they would enjoy the certainty. The valuation of the uk equities goes back 100 you have to go back to find equities this cheap. To say those are discounted in the market is wrong. I think they probably will i expect a little volatility and those to go higher and be felt most acutely with regard to shares as we sit here today. How do we extinguish between brexit and the policy perspective when you talk about the discount when we trade against the rest of the world . We look to compare each and every company with the closest peer we could find in europe or asia we compare that with Financial Performance in like for like sales in revenue, profit, et cetera with that, you can get a clear score card those are things we are trying to value i think history would say that you cant just keep selling an asset class forever. When the fund starts to come back, well pick off the best values that are cheer versus international peers. If we go back to a possibility of a notrade agreement with the eu and uk, could there be some sort of upside for the major uk companies . Absolutely. The history less on would say you expect steriling to be weak. It has been weak persistently since 2016 clearly, i would expect in the short term, a modest amount of weakness that you would talk to at all looking overseas like glacxko which are usually cheap. That is in tratd one, those would be the benefits. Those would be domestically with the deal or no deal. Weve had an unbelievable period of companies brexit was the end of 2018 2019e another. Then they can play either way, we get certainty by the end of october it will bet also write off even in the event of no deal you talk about what if we start to see the funds flow through the uk we are monitoring this selloff taking place in the u. S. In the tech selloff here. Are we at the beginning of the major rotation out of some of those winners that have ridden the rally higher or driven higher could that be the focus if investors sierkle some of those gains into the market . That relative valuation has only been here two or three times before mid70s or 80s with a big snap back in the World Markets and u. S. Market. Weve seen the value makers and the absurd names that asset class could be behind us through october. Then it is so, so important for us to feel the money behind us if you can get asset flows in, that really helps. We are just starting to see the emerge ens of the m a as well i think that shift is incredibly vital it is important for the mind shift that are borlsz. In that shift, that is hugely welcome as well. Coming into this crisis a clear message thank you for joining us this morning. Coming up, well look at two asian debuts as hong kong and south korea see new listings with different outcomes. More when we come back welcome back to street signs. These are your headlines european stocks turn negative despite a threeday losing streak the nasdaq posted the best session since april. The ecb expected to hit further stimulus brexit backlash, House Speaker pelosi said there is no chance of a u. S. uk agreement if the good friday agreement is undermines and warns against plans to break the divorce treaty President Trump says he intentionally played down the virus. Joe biden accusing him of derliction of a new book lets get a check on european markets things have quickly turned negative weve got red across the board so under performing broader europe the dax losing a bit of steam down 0. 15 and the ftse mib does follow pressure. The main benchmark rallied 1. 6 , every sector participating in that rally we are seeing a little profit taking after yesterday we are not seeing positive momentum fx markets, we are seeing a bit of strength trading up nearly zero percent sharply in focus ahead of the ecb meeting today well see how madam lagarde frames the euro strength and how theyve spoken aboutthe strength in recent weeks weve got red on the board for wall street. Fairly modest compared to the magnitude of these if losses hold shares in yum china are lower on debut trading the company which operates kfc and pizza hut raised over 2 billion after going public in new york in 2016 shares in south korea as kakao games more than doubled. The group, which is a spinoff of mobil messaging operator has benefitted from increased demand from lockdown. Lets get shery to join us two different stories here yum china essentially struggling but different story for this Gaming Company out of south korea. What more can you tell us . So my observation at least coming from these two listings ive watched today, perhaps Growth Stocks are getting more love than value stocks that was really how our information and using this platform of kakao mobil messaging chat they are duping themselves as the tencent, which is the daily limit of the markets that is a smaller ipo compared to the ones we would see in recent months in hong kong but did raise 323 million u. S. Dollars. The valuation close to 3 billion u. S. For this game developer. Well see how this goes. A lot of the covid lifestyle is something people are talking about to explain this price action when it comes to this yum china, its an Old Fashioned household name its number one in china 675 billion u. S. But a fragmented market. When it comes to this year, its really about Going Digital i think thats the reason why theyll use the net proceeds for the net shell secondary listing in hong kong to expand their network of restaurants and go more digital even with their supply chain as well when it comes to this price action and closing down more than 5 , something we are not used to seeing on the day of in hong kong because we are used to seeing the listings here at least on the first day a couple of the commentaries i got. First of all, the global restaurant sector is under pressure with covid19 highly leveraged Retail Investors could freak out. They wanted to dump their shares in order to protect their capital. And in the resent sellout of the show and in hong kong as well as in shanghai. And perhaps some liquidity distortion going on as well. Thank you for the latest in breaking those day for us. Cnbc has learned bytedance is in talks with the u. S. Government over ways to avoid a sale of tiktok sources say bytedance is ready to hand over control but wants to maintain ownership of certain assets it remains unclear whether washington or beijing will back such an agreement. They have until september 20 or face a possible shutdown there netflix coceo addressed uncertainty around tiktok and his own strategy with china. Tiktok has done a phenomenal job on short form entertainment. There is always room for innovation i would never count anybody out. It is a wide open market you mentioned tiktok, there is a real question about the future of tiktok and more the relationship between United States and china and a market youve tried to get in im curious the implications of what is happening with tiktok may or may not be your ability, netflixs ability to enter that market we got turned down by the Chinese Government several years ago. We have not been spending any time on china in the last couple of years there is so much opportunity for us in asia, the rest of asia, i india, korea and latin america so we are focused on that. It is a pity from a longterm perspective of the u. S. chinese disengagement. We are focusing on entertaining everybody else ive got fresh comments i think everybody will be interested in listening to these are from astrazeneca ceo after news that the vaccine m