In the mix. Watch it closely. Yesterday, we saw outside losses versus the european markets for the futures. Similar picture this morning. Its on the back of the bounce sterling after the High Court Decision and commentary for the boe. One sector in positive territory, that is Household Goods. The rest trading weaker. Toward the bottom, outpaced by health care. This is what we saw stateside, too, technology and health care. 1. 2 on. Dont forget the clear election risks. Many of the companies are reporting that, concerned about a less friendly environment stateside no matter who wins office. Rio is weaker. Insurance stocks are trading south. 7 down, just outpacing to the downside. In terms of the others, teleco is weaker. Some of the safe havens, food and drink are ten 10 . Industrials just accelerating and Household Goods. Where you are seeing green, half a per cent north, electrolux along with montclair. One of the best performers, 6. 8 higher. The response out of the gates. Take a look at this. By comparison, we are trading weaker. The ftse on the losses. Its the one that fed better. You are seeing this in a twoday window after sterling accelerated up to the 124. 6748 as a result. 210 on the south. We are seeing the gentle market flash. Right across the board, trading lower. They say they are on track to achieve the Fourth Quarter target after the increase in court earnings. They are growing by at least high single digits. The stock up 2. 3 . Keep in mind, this is a stock. Virtually nowhere over the course of the year, up 2. 5 if you look at the performance today. Lets go to carolyn for more on the reaction. What do you think of the news this morning . You said the stock has gone nowhere. A year ago, we saw the merger. It was 70 franks, now closer to 5067 50. Over the year, theres been price depreciation. They are skeptical of that behemoeth. They can be delivered. The cost cuts they are promising are way too ambitious. A lot of people said this is a firm, the big firm is not nimble enough in a market dogged by overcapacity and where they have been too over invested. The last couple quarters has been a show me quarter by eric olson the new ceo of that group. They are on track to fulfill very ambitious promises. Look at the Third Quarter sales. 7 billion swiss franks. One important area is pricing. Its where we are seeing improvement. Pricing us up the Third Quarter. The ceo told me pricing will continue to increase. We saw plenty of overcapacity. He told me before, the bottom terms of pricing was hit in 2015. We are well past that level. The other big factor i want to talk about is shareholder returns. The company repeatedly said once we get that down to a sufficiently low level, that is around 13 billion swiss franks, we are going to start returning capital to the markets for shareholders. What form is that going to take, dividends or share buybacks . Take a listen. You made a merger to generate more cash flow and we are going to make good on that commitment. We said that establishing solid Investment Grade ratings was important and having our ratios in the right place. We set a target of 13 million of net debt by the end of 2016 and well be there. Once we are there, we will make good on our commitment to return value to shareholders. They were cautious on the stock. J. P. Morgan is. They say the emerging markets will take a hit once the fed starts hiking Interest Rates. That wont be positive for la falgeholcim. They are triting at a 15 premium to the historical average. Its not necessarily cheap at this point. I dont know what you think, steve. I think we are all looking for evaluations. We saw the fact that they are growing deal after deal after deal. Ill go after the fact that i have been around a while. 2001, big deal, blue circle. 1997 to 2001, he was the ceo, said no, no, no to quote megan trainer, then he said yes to lafarge. The point about this company is it is growing through acquisiti acquisition. Its grown through organic as well. They are not cheap anymore. They are not cheap. I want to look at whether these companies, which in europe are good, solid, well companies. Its hard to argue lafarge isnt. You are paying 17. 4 for a cement company. That is tough. Is it supported by earnings . Im going to this excellent piece of research about european earnings growth. Ill do a couple, then look to the panel as well. European companies are doing well on revenues, earnings and growth. Your point taking out some of the dogs. Im looking at core europe. I think its a fair exercise to do so. If i can do that, revenues are up a respectable 8. 1 and e. P. S. Is up. Lets celebrate europe numbers. We beat ourselves up. Let me finish up. Im going to give you context. Ill get you back in, i promise. The u. S. Equivalent is for revenue, 2. 5 . They are outpatie ioutpacing eu that. 1. 9 and 4. 1 growth is better than many expected as well. Europe is outpacing in terms of blue chip. Its very tight, i agree. We are outpacing by a significant margin. I think thats something to talk about, if not celebrate. Lets put it into context. More context. Six years of negative earnings revisions for europe. For six years, European Countries have nothing. If you put the banks in, it doesnt make it worse. This quarter, 68 of banks reported and have beaten, not necessarily the revenue line, but the earnings as well. Very strong. If i look at earnings forecast next year, do i think it could be any worse . No. Do i think the banking could be worse . No. Then i should be achieving somewhere between 5 and 7 growth in earnings before i put gdp inflation into that picture. When people say to me, michael, theyll never get to 13 earnings growth. For the last six years its been 13 . Yes, i agree last year, that was entirely wrong. Thats why we were short. That next year, i think it might actually happen. If i get to 7 or 8, it will make the market move and revalue the market. You are doing the numbers. Everyone is. Quietly doing all right at the moment. Its not the big story on the demise of european equities. Its not the same as a couple years ago. I love that. Im taking it back to the states. However you pronounce that, awesome. The numbers, i think the biggest story told is the numbers are good. If you look at the global economy, including eurozone, its coming on the back of policies. People havent taken into account to buy corporate debt and how that worked. Its showing up in the pmi numbers. They have that combined. Its on the list of ones you can buy. What would mcdonalds do . Theres a mismatch between the narrative you are supplying about earnings improvement and the message from the central banking community. You continue to point to reasons not to increase the cost after capital at this point. We look at the banks and the policy assumptions are terrible. The feds have been telling us they are raising rates only to backtrack. Now that they have given up and they are calling for two rate hikes, now its accelerating. The key is, theres so many folks that are investing, its different this time. Lower for longer. Its the term, pushing on a string. The Central Banks are pushing on a string. Its not going to work. That was the first fed governor. Every cycle, we dont think the fed is going to work or bank of england or the ecb. Is a matter of time. Im going on something that is going to burst my balloon straight away. Look at it in a few moments time. Its not a great story today, i do not believe. Im afraid to say. There was an issue. Well do it in a moment. One of the sectors you threw out of the basket, commerce bank, front and center, the restructuring story thats been playing out. This tells a story. No appetite despite performance for october, not participating in a huge way. The stock down 37 . The legacy its beaten forecast with more than expected loss in the Third Quarter. Structuring costs, low Interest Rates weighed on the bank. Generally the second largest lender confirmed the expectations for a small, fouryear proffer. Its down 7 . Its not doing much to move the needle on the stock today. You are completely right. I think everybody is aware of the outlook. Theres no real reason to buy into that stock. Look at it without any rose glasses on. It is a restructuring case. The bank is undergoing the biggest overhaul in the last ten years. There are going to be only two divisions, another big round of job cuts, 9,600 full time positions are going away from the bank. So, essentially, nobody really knows what that means in terms of impairment losses going forward. Essentially, its not cheap to get rid of so many people, mainly here in germany. Bottom line from the q3 numbers is the focus is, of course, on cost cutting, shrinking the bank, once again. Also the focus is on making retail bigger. They want to gain 2 million more customers by 2020 in a move to increase their market here in germany. Many people are, though, saying this strategy has actually a lot of Downside Risk as the Retail Market in germany is very, very competitive. Its not easy to make a lot of money here. So, the positive from the numbers is as well that the capital ratio increased to 11. 8 . Ironically, it is higher than the capital ratio of the bank. Having said that, i think the focus is really on where should growth come from for the shares and that is one of the Big Questions im going to tackle in exclusive interview with the cfo later today. Ill bring it to you roughly at 12 00 local time. Back to you. Thank you very much. Pressing questions coming his way. Banks performing badly. Sector down 1 so far. Not compared to what the stocks put on over the last two weeks. This is the point. Its a correction. You have such a strong rock. Very quickly, let me give you the spanish pmi numbers before michael. Pmi inches lower to 54. 6, the lowest since july. 54. 7 in september. New business pmi falls to 52. 6. That is the lowest since november, 2014 from 55. 8 in september. The spanish are going to have a gom government, but does it indicate the momentum is slowing . Pmi picked up in spain is firm and continues to firm. The services side, we expected it to be weaker and that picks up at this point. The government is really important in terms of the Wider Service sector coming through. One of the most attractive areas of the moment is something the spanish media has is absolutely slammed here. I fancy the ibex, but its not going lately. Only with two or three stocks. You have the two banks. Obviously it is dominating the ibanks. There are Fabulous Companies at the present moment in time. One of the ceos, i think is absolutely fantastic ran a brilliant business growing simple acquisition. Then look at the Property Companies that come out, nothing, out of nowhere, out of the ruins of spain and people created cash Property Companies, which for me a clearing. Yes. Dont you find it interesting we are talking spanish numbers slowing from the mid50s, versus being negative . The world trades like we are in a global recession. Theres a fear you are going to fall back into this global recession and having a slight slow down in the services pmi that is still a robust number. I look at where we are in the base. Im going to put in Spain Unemployment rate. I agree. Things are great, they look good in the pmis. 22. 7 is the base unemployment. Still horrendous. So, is that good or bad . What that gives you is opportunity for improvement on an economy showing a degree of improvement. Thats the story, Central Banks, to your point earlier, pinned with low rates while the economy is accelerating, increasing long rates. Im going to shout out, below 20 . Just want to say, we have double box up, a tv term. We are showing you swearing in the new cabinet. Swearing in the new cabinet. Where is the king . I know that. Since its what we are doing, i thought it important we go live to madrid. Its a minority government, which is going to be able to pass very little, but give you stability for three years because it doesnt want to go to the election or psoe. Party socialists dont want to go to election, either. Not much reform. Headline news, spain has political stability for three years because they have a government that cant do a lot. This is great. We come back to the unemployment issue, which was driven by the construction sector. It went down to 6 . Its not coming back then moving around. Monetary policy. Time is up. Its up to the government to come up with dramatic reforms. Doesnt need it. Spain is an economy thats it, end of game. Spain is an economy that will surprise you over the next five years. Increase in tourism, will not be in there. Then we know we can lift Monetary Policy away from the ultra low setting. Come back. Im stumped. As we all are. I have a question. It comes from the comment steve made that we didnt get quite to explore, but the issue. I just want to come back to that. I think its very interesting. There are some noises coming out of the appetizing market that are not positive. The facebook announcement that advertising revenue is going to start to slow. The growth will slow, anyway. At the margin, you see some suggest that maybe appetizing numbers will be down for a number of platforms. Isnt that like banking, a life blood story . If ad spending comes down, ceos are less confident about marketing to buyers. Great question. Especially in the u. S. , theres seven years of economic recovery. Theres a feeling like you are too long in the calendar, i dont want to spend too much money, you are about to embark on a recession. The calendar doesnt dictate it so it should pick up. The recession is dictated by credit. The credit markets are wide open. Globally, they are wide open to the point the ecb is buying corporate debt and negative yields in europe, which is still insane, sounds insane. But there is. Its very stimlative. You really need a shutdown of credit to end up in a negative economic backdrop. When you had a slow down, you had ceos spending more to detract the product. It hasnt worked like that. The make up of advertising changed, too. Internet advertising versus tv advertising. I dont want to pretend to be an advertise i advertising expert, but its changed. Its growing quickly. The outdoor traditional side is not growing. J. C. Deco is weak. That is for them. If you take the overall picture, we have in a trough for advertising. If we are right, things are improving, the corporates will be back next year, but do it different. Think about this, has donald trump got more advertising from going on abc, cbs, nbc or twitter . It doesnt cost a thing. He tweets something and everybody covers it in a news. Traditionally in a president ial election weighing in on the radio about how hes getting the vast amount of traffic is about trump at the moment and the traditional polls are underestimating the power he has on social media. The person who pointed this out correctly called brexit and the uk e lelection as well. Theres a concern on the democrat side. He absolutely nailed it. Hes killing it. You wouldnt expect that. The millennials and more computer literal are on the democratic side. Kind of a grounds eye view, not saying which candidate i support, they are both awful. When going through the u. S. And drive by houses, people typically have signs in the lawn. I have not seen any Hillary Clinton signs. You see sporadic trump signs. There really isnt any sign. You have not seen a lot of prohillary signs. The interesting thing about this election, what you are seeing from the exit polls from those that voted already, they dont want to vote for the candidate they are voting for, they are just so against the other candidate. That creates an environment that is not right for major legislative change. We are going hold on to you tony. Lets get into the detail of jc. Thanks, jeff. The stock looks terrible. The billboard they produce. If you put the stock on the bill gork, downwards in the Stock Movement that led to a weak per formansz of 29 down and today, ugly performance in the stock as the shares hit a twoyear low. All this on the back of the french Outdoor Advertising company. It would turn on the quarter and the Global Economic slowdown. The revenue fell to 1. 5 down from 3. 4 in the previous quarter. A significant revision. Another sector, look at the gambling side of the business, 3. 3 higher. Upgraded the fouryear guidance. All this, thanks to the weak british pound. They said they are benefiting from better than expected numbers and held by favorable sporting results. Meantime, investors are seeing the worth in loreal sales. North america being a standup performer as the shares spike 3. 5 . I give this to michael, he called it this morning, 6. 1 higher announced the retirement of the ceo and cfo. The swiss watch maker has a decline in First Quarter profits. Big question i have is whether the bounce in the stock is due to the change. I blame it on strategy for the performance of this company or is it about a change in the trade for the company . Steve . This is an amazing company. Its owned so widely across the board. It is a blue ribbon in many ways. This is the blue ribbon. The problem with being the blue ribbon is your argument in the resources when we talk about materials. I know you like it. I worry about the price. Where is the leeway. Up 2. 53 . Its not a lot for the number one shareholder. Gardner, 2. 2. Actually the top ten shareholders own a small portion of this company. It comes differently from the one that is family dominated as well. We argue about evaluations for a long time. Ill say this point quickly. I know we have to move on. Trade 25 times a sector. Down to 1617 times. 24 times. Where is my wiggle room . Where is my wiggle room . Can i bring up what the chairman brought up . He said the trend is not improving. The part you brought up is done. Can you look past the trends . The starting point in these businesses is to clear out, get it back off the retailer. Get down low. Then you are starting to produce on a lean basis for demand. Then you find, over a period of time, i cant say definitely tomorrow, but the demand in supply come to light. Some pricing flexibility with that business. Therefore, thats where you start the transition. If you pay over 20 times at the bottom of the cycle for business like this, which could grow over the next decade, 5 to 8 . Tha