Transcripts For CNBC Squawk Box Europe 20161103 : vimarsana.

Seeing this morning. So across our markets, youve got a rotation thats happening, and investors questioning some of the trades that have been very strong in october. In particular, banks and oil is where youre seeing some of the pressure points. But more importantly than that is some of those interests, sensitive sectors, youve seen this in the states, theyre being sold as well. Real estate, telecoms, the bigyearolds, particularly on markets that are seeing ground lost in this selloff. Now, basic resources, though, this morning, opens up as the weakest sector. Youve got one sector positive, which is household goods. So basic resources trending down. Curious, because dollarss been on the offensive. Typically, dollar should be weaker. Thats not happening in this bout. Goes back to questioning some of those sectors that have done particularly well, whether its been justified, and perhaps you want to take some of those profits and lighten up the portfolio load, in what is a risk off those. Construction, utilities, the third weaker sector here in europe as we start out the trading day. Insurance stocks, chasing reaction to rsa, which has been reporting today. Its lower by 0. 6 . Food and drink, about 0. 1 down so far. Food and gas, its a mixed profit. A buildup in inventory certainly causing some weakness. So too is this fatigue around opec can really bring around a production cut, as we come up to a key meeting in vienna. The oil and gas trade is a fraction measure. Travel and leisure, gains in the sector. It is the weakest, down near on 3. 9 . Household goods on the flat line, the maker of mens ties, a little higher. Not sure whose household basket that goes into. Retail, that is the top performer this morning. Morrisons putting in a slight improvement on the back of its numbers. Well jump into that in just a bit. But the overall tone is slightly positive this morning. The ftse is now closely hugging the 6,800 handle as we drop another 0. 2 or 13 points this morning. The french stock market, 4,400 is the level its sitting at, about a third of a percent south. So a modest lightening up if you look at the eindexy level. Banks have been challenging after a strong october. It leaves us questioning whether these valuations are worthwhile now and whether the sector has moved too aggressively. Credit suisse is a great example to that. The stock was up 1. 5 and has dropped 3. 7 out of the gates. Its surprised investors with 141 million profit for the quarter, well above analyst forecasts of a 120 million loss. But its not moving needle on the stock today to the upside. The swiss bang also upped its litigation provisions by 357 million francs. So lets get more from caroline. Reporter im quite surprised by the drop right out of the open. We were expecting a slightly higher start to the trading day for shares in credit swiss. Some of the negs you might want to point to is the increase in litigation provisions to the tune of 357 million swiss fransc in this quarter. Theres still the question of the Mortgage Backed securities and the selling of that. Very similar to what we see going on over at Deutsche Bank and we still have no visibility when the settlement could be forthcoming. Of course, we know its now going to be after the u. S. Elections. But that is still one major overhang, litigation as it is for many other banks. Then, of course, Credit Suisse continually warning about very tough environment, very challenging, for the banking sector, given the tough market and regulatory environment, but also the low Interest Rate. And of course, subdued activity when volatility is too high. We know that in the investment bank, yes, that did get a boost from some of the bond trading activity, also, equity and Debt Capital Markets were quite strong for credit swiss in the Third Quarter, in part because of the brexit volatility. But there comes a point when volatility is too high. When theres too much market uncertainty. And we know that the equity business at credit swiss didnt do so well in the Third Quarter. I do want to point to a couple of positive aspects, though, because this quarter by and large, this was a Strong Quarter on many fronts. When we take a look at the Wealth Management, its a 9. 2 billion swiss francs in the Third Quarter. Half of that is coming from asia. Thats a very, very healthy pace and thats where the bank wants to pivot to. That is one of the main pillars of the overhaul of the bank that was announced roughly one year ago. A stronger focus in asia, towards the Wealth Management business, and away from the very risky activities in the Investment Banking unit. And that seems to be paying off. Also stronger than expected capital ratios of 12 , in terms of the equity ratio. Thats up 20 basis points from the last quarter. But lets hear from the man himse himself. We have continued to implement the strategy we find a year ago, which is to really focus on execution, a big focus on cost. Youve seen the costs coming down. We believe weve taken out 1. 5 billion of cost at this point already, out of our cost base, from january. We have continued to push growth in our chosen areas. So if you take, basically, asia, international and switzerland, we collected 30. 9 billion of assets in nine months, which is a very strong rate weve ever had. The highest ever in asia. And preferred strengthening our capital position. A year ago when we met, we had a cte of 12. 2 . We had a leverage ratio of 2. 8 . Were hitting 3. 4 this quarter. So really, reducing costs, growing where its profitable and strengthening the capital position, it is really the heart of what we do. And its another quarter of progress. Talk to me about the Investment Banking side of things, though. Because what we saw with u. S. Banks, some of the european rivals. They benefit hugely from the postbrexit trading environment. Was that visible to you, too . It was visible to us, but remember, we said we would right size investment bank. So we have cut the investment bank. So if you cut our numbers, youll see that pure credit is up 59 . Its down 24 . We cut the capital, 28 . And equities has been under pressure, but its a tale of two cities. America is doing very well. So we have not lost market share. Its up 1 in america, quite a strong performance. But we have been under pressure in europe, or to be frank, we had a bad quarter in the equity. Reporter and look, its been a very tough operating environment for many of the banks, as i alluded to before. Thats something you continue to hear across the board. Theres very little visibility on when things might improve. Of course, were waiting for a higher Interest Rate environment, but also for client activity to pick up sustainablely, not just for one quarter, not just for two, but for activity to be permanently higher. Shares in the bank have been settled off quite aggressively, in part because people thought the capital buffer that was too low, because of the litigation issues, but shares have dropped more than 40 yeartodate. Thats versus a 20 drop for the broader european banking sector. So what theyre hoping for is also for sustainable return to a level north of 20 francs per share. Back over to you. Carolyn, thanks very much. If you have unfolding here is one of the worst performers here in europe today. So it tells you about how bearish the reaction has been to the numbers today. The stock, as you can see, continuing to come off some of the highs that were posted in october, when you look at the shortterm trading window. But ive been tweeting out about this. Better places to look, if youre chasing bank reaction. Stock ing, both reporting very, very nicely. Stock gen is noost near the top, as it reported a 39 jump in income, thanks to a pickup in fixed income. There were weak parts. And the french lender reported weakness in the domestic Retail Division and warned with of a challenging environment. Nancy spoke to the deputy ceo and asked him about the impact of low rates on the companys bottom line. This quarter has benefited from a strong activity in rights, credit, but also in a new demand in investors. We dont expect a change in the environment for the next period of time. And this, of course, is helping to offset some weakness in the french retail side, given the low rate environment. How concerned are you about low rates for longer, when you look at Central Bank Decisions around the world . With a specific situation in you eurozone, not in france, on negative interest, our global sensitivity on negative interest is limited to mainly our french activity. So there is a pressure on the revenue side, due to negative Interest Rate in france. If you recap the commercial dynamism, a number of, its still very positive. Its an industry question today. On the first nine months, our Net Interest Margin has been under pressure and the net income decreased by 3. 5 for the first nine months in the french retail. We dont expect significant improvement for the next period of time. So reaction there to societal gen. So some of the earnings reactions are hoping that the picture on stock market, ing in particular is the largest bank in the netherlands. It has reported an underlying result for the quarter of 1. 3 billion euros. That was ahead of analyst estimates. And high loan growth and increased commission helped to boost revenues for the quarter. Earlier, we spoke to Patrick Flynn and asked, what is driving the number. Our Small Business in belgium is up. These are markets where were growing. We are selective, but were continuing to grow in the markets where we have a strong proposition. Okay, joining us from the desk now is chris wiley, who is the chief Investment Officer of connor broadly. And of course, our guest host is here today. Its been quite a while. I cant believe its been over two years. Look, in terms of how you see these markets, we were having a brief conversation about chris binodi, who is famously bearish on the value of the uk stock market. Youve had a look at his fund, what are your thoughts . Fondly enough, we have made an investment in this fund just recently. Not because we agree with him in actual fact, its because we rather disagree with him and see him as a hench to our broader portfolio, which is actually been getting more positively positioned, really since just before the referendum. So weve been moving in a more positive direction. Look, i mean, we know the risk factors out there at the moment. Clearly, theres this big Political Risk overhang. We know that growth is still pretty sluggish and lacking impetus, but we dont have a significant margin of comfort in terms of the growth rate between where we are now and potential recession. However, i think all of those risk factors are pretty clearly understood by marcus. And what has been happening in the background is that the Downside Risks to growth have been dissipating. And sentiment in markets is very negative and i think thats quite a lot of a fair amount of cash, particularly amongst professional investors. Everyones sitting on the sidelines. Actually, we do see the potential for markets to rise a bit, as some of these risks are mitigated. Let me i think the bears, wherever you speak to them, the uber bears, the i think theyre incredibly compelling when you listen to their argument, but the destination of Market Analysis is were going down 30, 40, 50, 80 potentially as crispin said in terms of valuations. Do you not look at what they said and say, you know, i really understand where theyre coming from. Or say, i just have it as a hedge . I get the impression you think were going up . I respect them profoundly. They tell a good story. Theres an old stock market saying is that the bears always have the best arguments. And one of my favorite sayings or adage is how bull markets climb a wall of worry. And i think were more in that environment at the moment, the way were putting it to our investors, is having been cautious actually for the last 18 months, up until the early summer, weve now moved from cautious investing to careful investing. We dont think its a time to be pushing the boat out and to be gung ho. Because the risk reward tradeoff doesnt point in that direction. But the risk reward tradeoff is now reasonably balanced. And therefore, you should stick with it. It takes a bit of guts at the moment, but be fully invested, because we think the upside is there. We are cognizant of the downside risk. But you know, i dont think thats going to really crystallize until Interest Rates become unanchored. I would make two points so weve been through two years where the growth news was generally very, very weak. But over the last month or so, we have had some were tbetter n. If you look at Global Manufacturing pdis, theyve been across the board better. Thats something thats waking up investors. But we have a new risk event just around the corner. The u. S. Election was not supposed to be a risk event and now it is, because its getting so close. And investors didnt know what the trump policy is, but we can see from the price action, the uncertainty is certainly moving markets, like stock markets are definitely going down. So theres sort of this tension between, okay, maybe the growth news is getting globally a bit better, but we have a new risk event on the horizon that is really dominating in the very shortterm. Fabulous. Gentleman, well leave it there. But in the meantime, these markets eking their way upwards to the flood line. Hard to tell whether were going to be a leader in this Global Market with breaking some of the red ink were seeing across markets so far today. Weve been down for eight straight sessions so were trying to shake it off. Youre seeing oscillations on this chart. But we are seeing patches of green in the early parts of the session. I want to take you to one stock thats not defying any of this big move. Its been discard eddiscarded, an old pair of shoes. The stock got to a peak and has fallen very aggressively. This is in context with the falls youve seen at the start of this month. Its down 4 . Rose to 387 million euros. That topped analyst estimates. The german Sportswear Group said it would take a oneoff cost in restructuring its reebok brand, as well as measures to strengthen future growth. So messy numbers is what the takeaway message has been for analysts. In terms of what were seeing elsewhere on the german market, vonovia raised its earnings target at the end of the summer. The german Real Estate Company said it saw funds from operations, its key profit metric 29. 8 . The company says it will also ramp up investments in the domestic property sector in 2017. To me, this is a fascinating conversation. We have the cfo today talking about the fact that they are hoping to pick up on this brexit effect, as money retreats to a safe haven market like germany. They say theyre only seeing this as an undercurrent of markets, not so much with customers, but with shareholders. I wonder if youre tracking capital flows across europe on the back of the brexit vote. Meantime, let me take you to another stock that weve been tracking for you very closely today. Beiersdorf. The organic sales rose in the first months of 2016. The stock is bouncing strongly, more than 5 . The Global Climate agreement reached in paris is about to come into effect and the impact on Energy Markets will be closely watched by investors. Nancy is in paris at the New York Times energy conference. Youve got another guest for us, nancy . Reporter thats right, steve. And the cop21 agreement officially coming into force tomorrow, but now the tough works begins when it comes to implementation and action. Lingering questions around that one especially when you look at this lowgrowth environment, whether or not corporations are willing to get onboard with the commitment that the politicians have made. For more on that one, im joined by our next guest that is the secretary general of the International Chamber of commerce, mr. John denellovich. Sir, thank you for speaking to us this morning. You are at this conference talking about companies, the fact that they need to get onboard this renewable charge. But in this environment, do you think theres some reluctance still among corporates to implement some of the initiatives weve been talking about . Nancy, the International Chamber of commerce is the Worlds Largest organization for business. We have over 6 million members. And by and large, both large and Small Companies are very much onboard with regards to the implementation of the actions they need to take to move forward on the agreement that was reached last year in paris. As you very rightly said, tomorrow, the 4th of november, is the date this accord enters into effect. Our companies have been taken active steps to implement various aspects of the agreement, not only with regards to infrastructure and health care and with regards to a number of programs, energy, that will affect their bottom line in a positive way. The cost of Climate Change is estimated to be over 700 billion if action is not taken. Its a win for business. Although its a daunting prospect, its something which theyre more than happy to engage in. And how do these corporations view the corporate political environment . Because, of course, the deal as reached, cop21, requires global coordination coming at a time when we see many countries building borders, building walls. Youve been in diplomat services for quite some time. Is this a real concern, not just for cop21, but for other multinational deals. With regards to the climate accord, 87 of 197 countries have already ratified that. Most importantly, three major emitters, the three largest emitters, the european union, the Mortgage Backed<\/a> securities and the selling of that. Very similar to what we see going on over at Deutsche Bank<\/a> and we still have no visibility when the settlement could be forthcoming. Of course, we know its now going to be after the u. S. Elections. But that is still one major overhang, litigation as it is for many other banks. Then, of course, Credit Suisse<\/a> continually warning about very tough environment, very challenging, for the banking sector, given the tough market and regulatory environment, but also the low Interest Rate<\/a>. And of course, subdued activity when volatility is too high. We know that in the investment bank, yes, that did get a boost from some of the bond trading activity, also, equity and Debt Capital Markets<\/a> were quite strong for credit swiss in the Third Quarter<\/a>, in part because of the brexit volatility. But there comes a point when volatility is too high. When theres too much market uncertainty. And we know that the equity business at credit swiss didnt do so well in the Third Quarter<\/a>. I do want to point to a couple of positive aspects, though, because this quarter by and large, this was a Strong Quarter<\/a> on many fronts. When we take a look at the Wealth Management<\/a>, its a 9. 2 billion swiss francs in the Third Quarter<\/a>. Half of that is coming from asia. Thats a very, very healthy pace and thats where the bank wants to pivot to. That is one of the main pillars of the overhaul of the bank that was announced roughly one year ago. A stronger focus in asia, towards the Wealth Management<\/a> business, and away from the very risky activities in the Investment Banking<\/a> unit. And that seems to be paying off. Also stronger than expected capital ratios of 12 , in terms of the equity ratio. Thats up 20 basis points from the last quarter. But lets hear from the man himse himself. We have continued to implement the strategy we find a year ago, which is to really focus on execution, a big focus on cost. Youve seen the costs coming down. We believe weve taken out 1. 5 billion of cost at this point already, out of our cost base, from january. We have continued to push growth in our chosen areas. So if you take, basically, asia, international and switzerland, we collected 30. 9 billion of assets in nine months, which is a very strong rate weve ever had. The highest ever in asia. And preferred strengthening our capital position. A year ago when we met, we had a cte of 12. 2 . We had a leverage ratio of 2. 8 . Were hitting 3. 4 this quarter. So really, reducing costs, growing where its profitable and strengthening the capital position, it is really the heart of what we do. And its another quarter of progress. Talk to me about the Investment Banking<\/a> side of things, though. Because what we saw with u. S. Banks, some of the european rivals. They benefit hugely from the postbrexit trading environment. Was that visible to you, too . It was visible to us, but remember, we said we would right size investment bank. So we have cut the investment bank. So if you cut our numbers, youll see that pure credit is up 59 . Its down 24 . We cut the capital, 28 . And equities has been under pressure, but its a tale of two cities. America is doing very well. So we have not lost market share. Its up 1 in america, quite a strong performance. But we have been under pressure in europe, or to be frank, we had a bad quarter in the equity. Reporter and look, its been a very tough operating environment for many of the banks, as i alluded to before. Thats something you continue to hear across the board. Theres very little visibility on when things might improve. Of course, were waiting for a higher Interest Rate<\/a> environment, but also for client activity to pick up sustainablely, not just for one quarter, not just for two, but for activity to be permanently higher. Shares in the bank have been settled off quite aggressively, in part because people thought the capital buffer that was too low, because of the litigation issues, but shares have dropped more than 40 yeartodate. Thats versus a 20 drop for the broader european banking sector. So what theyre hoping for is also for sustainable return to a level north of 20 francs per share. Back over to you. Carolyn, thanks very much. If you have unfolding here is one of the worst performers here in europe today. So it tells you about how bearish the reaction has been to the numbers today. The stock, as you can see, continuing to come off some of the highs that were posted in october, when you look at the shortterm trading window. But ive been tweeting out about this. Better places to look, if youre chasing bank reaction. Stock ing, both reporting very, very nicely. Stock gen is noost near the top, as it reported a 39 jump in income, thanks to a pickup in fixed income. There were weak parts. And the french lender reported weakness in the domestic Retail Division<\/a> and warned with of a challenging environment. Nancy spoke to the deputy ceo and asked him about the impact of low rates on the companys bottom line. This quarter has benefited from a strong activity in rights, credit, but also in a new demand in investors. We dont expect a change in the environment for the next period of time. And this, of course, is helping to offset some weakness in the french retail side, given the low rate environment. How concerned are you about low rates for longer, when you look at Central Bank Decisions<\/a> around the world . With a specific situation in you eurozone, not in france, on negative interest, our global sensitivity on negative interest is limited to mainly our french activity. So there is a pressure on the revenue side, due to negative Interest Rate<\/a> in france. If you recap the commercial dynamism, a number of, its still very positive. Its an industry question today. On the first nine months, our Net Interest Margin<\/a> has been under pressure and the net income decreased by 3. 5 for the first nine months in the french retail. We dont expect significant improvement for the next period of time. So reaction there to societal gen. So some of the earnings reactions are hoping that the picture on stock market, ing in particular is the largest bank in the netherlands. It has reported an underlying result for the quarter of 1. 3 billion euros. That was ahead of analyst estimates. And high loan growth and increased commission helped to boost revenues for the quarter. Earlier, we spoke to Patrick Flynn<\/a> and asked, what is driving the number. Our Small Business<\/a> in belgium is up. These are markets where were growing. We are selective, but were continuing to grow in the markets where we have a strong proposition. Okay, joining us from the desk now is chris wiley, who is the chief Investment Officer<\/a> of connor broadly. And of course, our guest host is here today. Its been quite a while. I cant believe its been over two years. Look, in terms of how you see these markets, we were having a brief conversation about chris binodi, who is famously bearish on the value of the uk stock market. Youve had a look at his fund, what are your thoughts . Fondly enough, we have made an investment in this fund just recently. Not because we agree with him in actual fact, its because we rather disagree with him and see him as a hench to our broader portfolio, which is actually been getting more positively positioned, really since just before the referendum. So weve been moving in a more positive direction. Look, i mean, we know the risk factors out there at the moment. Clearly, theres this big Political Risk<\/a> overhang. We know that growth is still pretty sluggish and lacking impetus, but we dont have a significant margin of comfort in terms of the growth rate between where we are now and potential recession. However, i think all of those risk factors are pretty clearly understood by marcus. And what has been happening in the background is that the Downside Risks<\/a> to growth have been dissipating. And sentiment in markets is very negative and i think thats quite a lot of a fair amount of cash, particularly amongst professional investors. Everyones sitting on the sidelines. Actually, we do see the potential for markets to rise a bit, as some of these risks are mitigated. Let me i think the bears, wherever you speak to them, the uber bears, the i think theyre incredibly compelling when you listen to their argument, but the destination of Market Analysis<\/a> is were going down 30, 40, 50, 80 potentially as crispin said in terms of valuations. Do you not look at what they said and say, you know, i really understand where theyre coming from. Or say, i just have it as a hedge . I get the impression you think were going up . I respect them profoundly. They tell a good story. Theres an old stock market saying is that the bears always have the best arguments. And one of my favorite sayings or adage is how bull markets climb a wall of worry. And i think were more in that environment at the moment, the way were putting it to our investors, is having been cautious actually for the last 18 months, up until the early summer, weve now moved from cautious investing to careful investing. We dont think its a time to be pushing the boat out and to be gung ho. Because the risk reward tradeoff doesnt point in that direction. But the risk reward tradeoff is now reasonably balanced. And therefore, you should stick with it. It takes a bit of guts at the moment, but be fully invested, because we think the upside is there. We are cognizant of the downside risk. But you know, i dont think thats going to really crystallize until Interest Rate<\/a>s become unanchored. I would make two points so weve been through two years where the growth news was generally very, very weak. But over the last month or so, we have had some were tbetter n. If you look at Global Manufacturing<\/a> pdis, theyve been across the board better. Thats something thats waking up investors. But we have a new risk event just around the corner. The u. S. Election was not supposed to be a risk event and now it is, because its getting so close. And investors didnt know what the trump policy is, but we can see from the price action, the uncertainty is certainly moving markets, like stock markets are definitely going down. So theres sort of this tension between, okay, maybe the growth news is getting globally a bit better, but we have a new risk event on the horizon that is really dominating in the very shortterm. Fabulous. Gentleman, well leave it there. But in the meantime, these markets eking their way upwards to the flood line. Hard to tell whether were going to be a leader in this Global Market<\/a> with breaking some of the red ink were seeing across markets so far today. Weve been down for eight straight sessions so were trying to shake it off. Youre seeing oscillations on this chart. But we are seeing patches of green in the early parts of the session. I want to take you to one stock thats not defying any of this big move. Its been discard eddiscarded, an old pair of shoes. The stock got to a peak and has fallen very aggressively. This is in context with the falls youve seen at the start of this month. Its down 4 . Rose to 387 million euros. That topped analyst estimates. The german Sportswear Group<\/a> said it would take a oneoff cost in restructuring its reebok brand, as well as measures to strengthen future growth. So messy numbers is what the takeaway message has been for analysts. In terms of what were seeing elsewhere on the german market, vonovia raised its earnings target at the end of the summer. The german Real Estate Company<\/a> said it saw funds from operations, its key profit metric 29. 8 . The company says it will also ramp up investments in the domestic property sector in 2017. To me, this is a fascinating conversation. We have the cfo today talking about the fact that they are hoping to pick up on this brexit effect, as money retreats to a safe haven market like germany. They say theyre only seeing this as an undercurrent of markets, not so much with customers, but with shareholders. I wonder if youre tracking capital flows across europe on the back of the brexit vote. Meantime, let me take you to another stock that weve been tracking for you very closely today. Beiersdorf. The organic sales rose in the first months of 2016. The stock is bouncing strongly, more than 5 . The Global Climate<\/a> agreement reached in paris is about to come into effect and the impact on Energy Markets<\/a> will be closely watched by investors. Nancy is in paris at the New York Times<\/a> energy conference. Youve got another guest for us, nancy . Reporter thats right, steve. And the cop21 agreement officially coming into force tomorrow, but now the tough works begins when it comes to implementation and action. Lingering questions around that one especially when you look at this lowgrowth environment, whether or not corporations are willing to get onboard with the commitment that the politicians have made. For more on that one, im joined by our next guest that is the secretary general of the International Chamber<\/a> of commerce, mr. John denellovich. Sir, thank you for speaking to us this morning. You are at this conference talking about companies, the fact that they need to get onboard this renewable charge. But in this environment, do you think theres some reluctance still among corporates to implement some of the initiatives weve been talking about . Nancy, the International Chamber<\/a> of commerce is the Worlds Largest<\/a> organization for business. We have over 6 million members. And by and large, both large and Small Companies<\/a> are very much onboard with regards to the implementation of the actions they need to take to move forward on the agreement that was reached last year in paris. As you very rightly said, tomorrow, the 4th of november, is the date this accord enters into effect. Our companies have been taken active steps to implement various aspects of the agreement, not only with regards to infrastructure and health care and with regards to a number of programs, energy, that will affect their bottom line in a positive way. The cost of Climate Change<\/a> is estimated to be over 700 billion if action is not taken. Its a win for business. Although its a daunting prospect, its something which theyre more than happy to engage in. And how do these corporations view the corporate political environment . Because, of course, the deal as reached, cop21, requires global coordination coming at a time when we see many countries building borders, building walls. Youve been in diplomat services for quite some time. Is this a real concern, not just for cop21, but for other multinational deals. With regards to the climate accord, 87 of 197 countries have already ratified that. Most importantly, three major emitters, the three largest emitters, the european union, the United States<\/a>, and china, have ratified the deal. Theres huge commitment Going Forward<\/a> on this, 87 out of 197. And although it may not sound like were getting close to 197, in fact, in terms of international agreements, were way ahead to have the game. When it comes to the rome statute or nonproliferation agreements, those usually take years and years and years to come into force. Whereas the momentum behind the climate agreement is actually very strong. Reporter yet it does remain politically sensitive. And weve heard from one of the contenders for the white house, donald trump has spoken out against the climate deal. In fact, in some ways threatened to cancel it. Is that unhelpful . No, its not helpful at all, and its very disturbing, not only with regard to climate but with regard to trade. These are hallmarks of where we are in the 21st century. These are our insurance policies Going Forward<\/a>. So to bash these internationally agreed upon accords is very counterproductive. To extricate ourselves from the Paris Agreement<\/a> would take four years. Its not an easy process. So, its something which has to be considered very seriously. I would also think, regardless of Donald Trumps<\/a> comments, that there would be such an uproar, were this to come about, that that would not succeed. Also talking about trade, how about brexit . Because that has sparked many fears, talking about uk trade with the european union, as you sit with the companies you work, are they concerned about the hard rhetoric coming from french politicians here . The companies we deal with are very concerned about this. As you know, theres a Huge International<\/a> presence in london. There has been now for several decades. It is really an international metropolis. And it thrives on that. The brexit vote was a shock. And companies are still reeling from that and trying to deal with what the implications of the brexit vote are for them. Its not an easy prospect. To move your offices to another european venue, whether it was paris, geneva, amsterdam, dublin, whatever it may be, and theyre all making a big pitch in this regard, is not going to be a simple process. Some say new york will be the major beneficiary of the brexit vote. It remains to be seen. But one thing is for sure, its going to be extremely complicated. Do you think, then, the french government is risking backlash in this big push to take jobs from london . Perhaps their going too far, if, in fact, we see a pivot to new york . No, i think the french have every right to move ahead in this regard and why not make a pitch. Paris is a beautiful city. And if they can offer the proper working environment for American Companies<\/a> and international companies, then why not. And just finally, you are an american living here in paris. What is the view here on the ground about the u. S. Election . I understand theres a lot of talk around here. What are people expecting and what are they looking at . Its been a dramatic process over the last year, as we know in the United States<\/a>, as well as in europe, i think the europeans are stunned to find the United States<\/a> in this particular position. Theres always been sort of an underlying cynicism and sarcasm about the United States<\/a>, but theres always respect and admiration. And were now in a phase of our political evolution, at least in this particular campaign, where the rhetoric and conduct is unbecoming of american politics. And so its a disturb iing procs for the europeans, not only with regard to nato and trade, but these organizations are hallmarks of our transatlantic partnership. They are pillars upon the strength of our governments rests. So to have those threatened by vitriolic rhetoric is something that is very dangerous. Thank you very much for bringing us that perspective. That is john danilovich, the secretary general over at the icc. So guys, yes, the focus here on energy, on the push to renewables nearly one year after the cop21 agreement, but a lot of talk on the sidelines about the u. S. Election just days away now. Back to you. Nancy, thank you very much. Appreciate the conversation. Very interesting takeaway messages as we all chase the oil trade. And air france is one that warned today about some of the strains in the business, revenue being pushed lower. Impact from oil exchange, but getting some savior from the fuel price. Saying it does not see the pressure easing into the Fourth Quarter<\/a>. The airline cited terrorist attacks in europe as keeping u. S. Travelers in particular away from the continent over the summer. The revenues fell 6. 5 for the quarter on a Constant Currency<\/a> basis. Can we get back to the u. S. Election, if we can . How the market i mean, the pollsters, good luck, because lets face it, they mucked it up badly on this side of the atlantic. In terms of how the market reacts, the knee jerk, is that going to be different what you think the longer term is . Because it has been very different on brexit, for instance. Yeah wing the indications are that if we get the null consensus result, ie, trump, you would get a knee jerk reaction from markets, which would be a fall. And if we doubted that before, i think weve had the confirmation of the last few days, as the possibility of a Trump Presidency<\/a> has increased, the markets have fallen. The real question is what happens after that. Is it going to be the brexit temp plait, we get a sharp shock, in that markets find a flaw, which is a higher level than the lower level of the selloff but theyre to tnot getting same support from a diminished selloff. But it wasnt just the uk that rallied from that. All markets did, which didnt have the currency boon. I think the technical picture from the markets is encouraging. Were actually into rising trends in most markets. What dupg given everything youve said so far in terms of valuations and the kneejerk to the u. S. Election . I think the hardest thing to do at the moment is stick to your knitting. The first piece of advice wib, would say, is dont fall into the bearish trap of having too much cash. First piece of advice is to stay pretty well invested. Diversifie diversified, of course. Were warming up to japan. Ten seconds to get your reaction . I agree with the point that obviously we dont know exactly whats going to happen after the election, and that could lead to bounce maybe, but trade is one area trump has been very clear he wants to change thing. So what are the transportation stocks in this game . Well try to come back to this. Chris, see you in a little bit. Maybe slightly before then. Chris whiteley, great to see you. Okay, coming up, halloween may be over, thank goodness, but there are some men in disguise gathering around the bay area. Is that jeff . Is he in disguise . Anyway, stay tuned to find out what cola whats he have on . What kind of mask. Well be back after a short break. Happen all by itself. It needs to be earned every day. Using wellness to keep away illness. And believing a single life can be made better by millions of others. As a Health Services<\/a> and Innovation Company<\/a> optum powers modern healthcare by connecting every part of it. So while the world keeps searching for healthier were here to make healthier happen. Tax taking its tolls on Credit Suisse<\/a>, sending the shares currently down 4 exactly. That surprised profit from the swiss bank. Telling cnbc the macro environments remain challenging. Its a tale of twos cities. America is doing very well. Up 1 in america, its quite a strong performance, but we are under pressure in europe where we had a bad quarter. Socgen is up 4. 2 as we speak. Its rallying on a solid set of number numbers. The ceo telling cnbc, Political Risk<\/a>s remain a key concern in europe. Predictability is really what we dont like in our environment. And down mirroring Credit Suisse<\/a>, investors are fretting over a oneoff reebok cost, which overshadowed a very solid set of numbers. And air france issuing a gloomy forecast, saying it does not see the pressure on revenues easing in the Fourth Quarter<\/a>, as the airline cites terrorist attacks for keeping u. S. Terrorist s travelers away from europe. This is a look the map here in europe, as we move into the trading session, 30 minutes has transpired. Weve got an uneven day unfolding across europe. The dutch market, up about half of a percent. Weve got about a tenth on the ftse so far. But some other markets are actually still posting losses, which is giving us a very split view of european markets, and as to whether were going to shake off some of the red ink. Weve been down for eight straight sessions, along with other markets, globally, along with the u. S. Market, which has been tracking much lower on volume. We have a market thats trying to push a little higher. Nearly 0. 2 higher. If you look at some of the individual markets, i want to show you the sectors we had, that is going to grow. The spot price has recovered a little bit. Retail is solid. Banks up about 0. 7 and retail nudging higher by about 0. 8 . And lets delve into the individual stocks. Earnings are really moving the needle on some of these on the topline. Inmarsat on the back of a News Announcement<\/a> has signed a deal with aig, the owner of british airways, to install highspeed internet on short haul aircraft. G genmab has bounced 8. 8 . Dufry, 7. 9 higher on the market. And meantime, tate lyle saw 6. 1 . Very strong reaction to its numbers. Randgold resources down 2. 8 . And its not really improving as we move into the session. Its been very negative on the swiss bank, 4. 3 south, currently, on the markets. Thanks very much, indeed for that. Its super thursday for the bank of england, which means we get an update on rates, minutes from the last meeting, as well as the quarterly inflation report. But there is another line coming out, and its about inequality and its about the banks and governments to be in collusion. Are you talking about brexit . Im talking about jeff and his next guest outside the bank of england, jeff. Because there is an alternative line out there . And i think your next guest and the likes of professor steve keene are tapping into it. Yeah, absolutely, steve. I mean, we are obviously waiting on the bank today to give us updated forecasts on growth and inflation. And of course, well be looking to the bank also to give us a nod on the direction of Interest Rate<\/a>s. But what are we, eight years since the Global Financial<\/a> crisis . Weve had all this action from the Central Banks<\/a>. And yet, a lot of people are still very unhappy and say that this has not dealt with the issues of inequality and society. It is purely funneled money into the pockets of the bankers and the corporates, who quite frankly, dont need it at this stage. And qe, as its currently operating, is really not working in the interests of the people. And im very pleased to have with me, fran voight, who joins us from an Organization Called<\/a> positive money, that has a different view on how qe should work. Fran, good to see you this morning. Thank you for coming on the program. So, what is wrong with what the bank of england is doing and why are you here protesting today . Thanks for having me on . Yeah, the bank of england after brexit announced a new round of qe, so creating 70 billion pounds of new money and funneling that straight into financial markets. We know from the banks own research that thats going to make the rich richer, previous rounds of qe made the top 5 in the uk richer by 128,000 pounds. And with this new round of qe, were also seeing 10 billion being used to buy Corporate Bonds<\/a> of Companies Like<\/a> apple, at t, and theres huge corporations coming out with an alternative. And thats being called various names. Were here today saying its qe for people. Were saying, the bank should be creating money for a stimulus, but we need to get that money directly into the real economy. And theres a couple of ways we can do that. Ones been floated called helicopter money. Its about getting cash transfers to citizens. And another way is to basically, essentially get it into Infrastructure Spending<\/a> through the government. So were here not just calling on the bank, but calling on the government as well, that they can Work Together<\/a> for Monetary Policy<\/a>. The bank could turn around and say, we understand the transmission mechanism very well. It is the existing banking system. And what weve done is weve brought Interest Rate<\/a>s down and weve used qe as a way of forcing those rates down, because the banks themselves know how to distribute money into the real economy. Whats wrong with that model . Well, that trend mechanism really isnt working. We can see since the crash, we had low Interest Rate<\/a>s, and theyve produced one of the slowest recovery sessions in history. So people dont want to borrow. People in businesses already have a very high amount of debt. And the issue is demand in the real economy. And thats where we need to get money injected. Many economists are basically saying that Central Banks<\/a> are in an intellectual crisis. Qe, low Interest Rate<\/a>s dont work, and we need Monetary Policy<\/a> to be working with fiscal policy to create a more balanced and fair economy. Why is the bank of england the right target here . Shouldnt you be standing outside of downing street telling theresa may and the chancellor that they need to issue more guilt for fiscal poli policy. Were talking about the problems with Monetary Policy<\/a>. Theres been a consensus that we leave Central Banks<\/a> to get on with it and let them decide whats right. We feel like the bank needs to be the target saying, what youre doing isnt working and they care and youre going to have some public pressure on you as well as the government. Frank, thank you so much for that. Frank voight with us from positive money. And i think a number of phrases coming up there. Helicopter money. Thats one that will send tingles down the spine of any central banker. But as we know, with the very slow growth rates we have, its not completely off the agenda, as far as the Monetary Policy<\/a> conversation is concerned. Its just a question of how that Monetary Policy<\/a> is shaped. And obviously the message here outside the bank of england its going into the wrong pockets. Back to you. And in many ways, though fran is coming from a different point than we do, theres a lot of similarities from those who espouse capitalism saying, it aint working. Ocean, decision time is with louisa from 12 50 time cte. To the u. S. Election, a new reuters poll Shows Hillary<\/a> clinton extending her lead over donald trump, back to six percentage points. This returns to the same margin that clinton held before the fbi announcement last friday. The democratic candidate is campaigning in nevada and arizona, while her republican rival is focusing on florida. Lets get out to tracey potts from nbc news for more from washington. Tracie, i cant say this would be comfortable territory still for the clinton camp, because surely they must be worried about complacency. Reporter and theyre also worried about that fbi email investigation that we may not have any results from before election day. Five days from today. Now, you were talking about the latest national polls, but were also carefully watching battleground state polls, because they can make a big difference. Right now, clinton is leading in wisconsin and pennsylvania, donald trump is now leading in nevada, which was another tight state, but things are still very close in florida. Trump will still be in florida this morning, before heading to North Carolina<\/a>. Clinton also in North Carolina<\/a> as they continue to hammer th e battleground states. Clinton now making a new argument to imagine a Trump Presidency<\/a>, talking about things like immigration and muslim ban, which hes backed off of. Meanwhile, trump arguing that theres momentum with his campaign in these final days. By the way, clinton is now seeing some trumpsized crowds. 15,000 turned out for her rally last night in arizona. Tracie, thanks for bringing us the latest on the race. And thats the point. You dont think that people have even started to think about a Trump Victory<\/a> in the markets . No. I think on friday, people are actually preparing for, okay, whats going to happen when the uncertainty is eliminated and in fact, the opposite happens. So i think the first thing people always do when something surprising happens is to hedge portfolio. The easiest way to do is hedge the index. I dont think this has filtered down into individual stocks. You can look at Global Market<\/a>s. Okay, the thing thats really moving is the mexican peso. But if trump is really focused on shaking up the whole trade relations, theres other currencies that really should be moving. I think its sort of quite narrow, how the market has moved so far. I think if the polls continue to tighten, its going to broaden out into other assets that ha s havent moved yet. The fed is very close after the u. S. Election. What do you do if you get a little bit of pop on markets to all Asset Classes<\/a> start to sweep higher on a clinton victory, the way that the polls are going at this point. Do you start to see an improvement, but some sectors dont perform down the track . What do you do . Keep some of the protection right up until christmas this year, because theres clearly more big risk than just the election at this point. Yeah. Well, i think, one thing thats important is that the event itself is such a certain point in the calendar, right . And some people will postpone decisions until that information has come out. So i think, even if we dont know what the policies will be, just knowing who will be president will be a uncertainty and potentially could lead to a recession in itself. And i think i speak to a lot of investors who say, were not going to make any Big Decisions<\/a> until that election result is out. And what the actual policies will be, that may take another six months, but the election result at this point is crucial. Its very difficult to trade this if you have a Trump Victory<\/a>. Because the market has had an undercurrent, almost, of a temper tantrum unfolding, where any of the yielders have been under pressure. But presumably, this is where the dialogue has gone. If trump takes the white house, you wont get the fed rate hike in december, which means potentially the temper tantrum is the wrong trade. If you look at whats happening in global bond markets over the last couple of days, two days ago, we started to price ecb rate hikes with some probability. Thats a long time since weve done that. That shows, i think, exactly your point. We had a little bit of a euro temper tantrum going on. But that has now been overruled by the election certainty in the United States<\/a>. And well come back to you after a very short break. But we need to issue a clarification with regards to our coverage of manny roman taking up his role of ceo of pimco on tuesday, when saying pimco has downsized 70 over the past three years, we should have specified that this relates to the assets under management in the total return fund only. And mr. Roman is the second, not the third ceo, since bill gross left the firm. Lets take a quick look at how we shake up across european markets, because 30 minutes in, it looked as if markets had improved slightly, but youre still seeing a fairly uneven trading day. Were up about a quarter of a president on the ftse, slightly firm on the cat, barely going anywhere on the german market, but strong gains for the dutch market today, up 0. 6 . Stock share up 600. The chicago cubs have won baseballs world series, holding off the cleveland indians, 87 in extra innings of game seven, to end the longest title draft in American Sports<\/a>. The world series mvp ben open riis broke a tie with an rbi double in the tenth inning after a rain delay for chicago, fans to wait nervously after the cubs gave up a 3run lead. Finally, chicago reliever, mike montgomery, got Michael Martinez<\/a> to ground out and cubs fans celebrated, the first world series victory in 108 years. I dont know if Nbcs Jay Gray<\/a> is a cubs fan, but hes on the ground in chicago. And im sure the atmosphere is fantastic, jay. Reporter hey, look, steve, you dont have a choice to be a cubs fan when youre here. It has been overwhelming this city overjoyed. As youve talk about, its been over a century since the cubs have celebrated a world championship. The game went into extra innings, the party here may never end. Weve seen an army of police out here. Weve seen street sweepers to come and try to clear out these crowds, but really, all its doing is moving them around. Its like a moving celebration here and its likely to continue well into the Early Morning<\/a> light here, as you can see, some of the officers that are patrolling and right behind them, more of the cub fans. They cant stay away from wrigley. At the height out here tonight, tens of thousands celebrating the dramatic win. Now, i would say its in the thousands, maybe, but again, its very spread out at this point. This city has a parade to get to, at some point, to welcome this team home, to celebrate their champship. And im not sure anyone will sleep until then. We dont have a date at this point. Its still fresh, but there are a lot of people that are going to make sure they celebrate this win for a long time. I think, today, a lot of businesses may be without some employees, at least in the Early Morning<\/a> hours. Slightly hung over employees, perhaps. Just tell me the importance for our international viewers, and for me as well, jay, im not a massive sports fans, but i support different sports. Where does baseball fit in with the massive American Sports<\/a> . Is it bigger than nfl . Is it bigger than the basketball and hockey . Where does it fit in in terms of the hierarchy . Reporter you know, its interesting, because the nfl is still the sport that garners the most attention in the u. S. It is handsdown the most popular sport. And baseball struggled throughout the years, but this championship between these two teams, the cubs, which have kind of become Americas Team<\/a> here, the cleveland indians, which havent won themselves in 68 years, this really captured the attention of the nation, and its really been a good boost for baseball, which is battling with the nba, with basketball, to keep the number two spot. So, it will be interesting to see if theres a carryover effect from this championship, if it does drive up viewership and attends for baseball. Its something that sport desperately wants and really needs, steve. And jay, how lovely to see you, not standing in front of a storm for a change, whether its matthew or something. Its nice to see you celebrating a really popular story. Absolutely terrific and jay, ill revisit you in 2124, another 108 years, right when they win . Ill be ready. Well be cryogenically frozen, but well be there. Always blown away by the big news stories. Normally jay is Like Fighting<\/a> a force 10 gale in front of matthew or katrina with big waves in the background. Great story. All right, fitness device maker fitbit shares fell aggressively, really aggressively, in afterhours trade after reporting a disappointing Fourth Quarter<\/a> revenues. 29. 66 . The Company Reported<\/a> a 43 decline in Third Quarter<\/a> net income, low in its guidance for revenues for the holiday quarter, well below analyst estimates. Facebook fell more than 7 in extended trade after warning that it cannot sustain its run of Revenue Growth<\/a>. The social media giant posted Third Quarter<\/a> revenue of 7 billion, a 56 increase over last year, topping analyst estimates for the sixth straight quarter. On the investor core, though, facebook cfo david waner warned that Revenue Growth<\/a> would slow quite meaningfully, as the company has reached the limit of ad frequency on users news feeds. Its been staggering, all these numbers that have been printed in the Third Quarter<\/a> have been astonishing. How bad could the slowdown be now after what has been a significant period of disruption . I dont think investors are concerned at all, karen. In fact, i was just speaking to the analyst saying, this is something facebook does every q3. Ad loads, the amount of ads they can shove into the newsfeed. There is a limit to that. But there are new areas that facebook is investing in. One is video. That has been flagged by Mark Zuckerberg<\/a> as a key area to boost engagement and also potentially new forms of advertising. I think theres a longterm play here, which investors are betting on. Do you think theres any snigering around the video ad . Because there was a bit of a scandal a couple of months ago where they overestimated the amount of videos from 60 to 80 , which is quite a significant overestimation. A lot of that stemmed from what they considered three seconds of video, which isnt very appealing to advertisers, but thats one area facebook will need to improve on. Its how do you tell advisers that this is a compelling ad product, and that might mean the way it counts metrics and advertising. You know, this is another apple stunt as far as i can see, with the valuations. And look, im not talking about the valuation stuff. Im talking about these analysts. If i want a choice out there, i can get a choice on most stocks. If i want a choice on facebook, i cant get one. Ive got 29 buyers, 16 strong buyers, three olders and one seller. Theres no balance on this one. Its, everyones got the same view. That doesnt strike me as a good market. Absolutely. Its a oneway trade. But there is one alternative. An analyst i spoke to this morning said, this is it for facebook. This is as good as it gets. And the reasons he said, basically, this quarter, theyve had the u. S. Elections to boost them and the olympics to boost them, and advertisers running away from yahoo . Saying, this is as good as its going to get now. There are only so many ads that facebook will be able to put on, as they have warned. Lets assume weve all got perfect information on, which is a very debatable point. Lets say everyone has the information they need on facebook, hence the price of the market is beautifully priced. That should mean that people think this stock could go two ways. Its like everyones got the same information. We will say, its a great company, trading 25 times forward. Wheres the twoway view. I can like a company and still think its going to go down. For instance, fit bit win loved the product but hated the shares, day one, hated the shares because of the valuation. Why are we not getting a twoway view on a lot of this stuff. I think the problem is that were saying, we dont know what other businesses theyre going to enter. Have been buying other companies that are really on the way up. Its expensive. But theyve been successful in these acquisitions. I dont think we know whats up the sleeve in terms of other areas. Temper expectations . From what . 56 growth in revenue. As one of the investors who has been looking at the stock, how Many Companies<\/a> worth 360 billion can come up with growth double digits at 56 plus strength. Its extraordinary growth. And a key point about that warning from the cfo is that this is on the core facebook platform. Remember, they have messenger, whatsapp, instagram. This is a really area theyre focusing on instagram, this user feature called instagram stories, a new product, thats supposed to directly compete with snapchat, which is seen as a rival to facebook for ad dollars. Now what happens with things like messenger. What kind of capabilities can they bring in in terms of payments and other advertising. So theres some run rate here, i think, investors are hoping for, in some of facebooks other portfolio of products. The problem, too, if youre a fund manager and you have a stock like this and you want to sell it, youve got to replace it with Something Else<\/a> . What do you replace it with . Is facebook still a better bet than some of the other Tech Companies<\/a> that you could replace it with . Its been a performer, its been a constant performer. Therefore, do you give it the benefit of the doubt . Absolutely. I think if you look at the social media space in particular, twitter, weve seen very disappointing in recent quarters. They havent been able to grow users meaningfully in this experimenting with new styles of products. I think investors are just looking at facebook saying, this is whos going to steal ad dollars from a quick segue into yuans. Ive got 30 seconds left on china. Okay, so, theres a lot of thix going on on the calendar, a u. S. Election and bank of england today. The other thing i would emphasize is, theres tensions around china. Were very focused on that. They might show a big drop. So its got away from the news headlines, but it might call back again. Look on the bright side. Dont be despited with 30 seconds. Thats ten times ad time on facebook originally, right . Love you. Safe journey back to manhattan. Thank you for the event data. For karen, myself, and jeff, have a great day. Good morning. No lights for facebook. Shares of the social network droppi inping on growth concern. Earnings alert, three european banks rolling out better than expected results today, but not all the stocks are trading higher. Well tell you why. Plus, the cubs bury the curse. Chicago bringing home its first world series title in 108 years. Its thursday, november the 3rd, 2016. 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