Violence in charlottesville in an erratic News Conference prompting more criticism and departures by key Business Leaders. I think theres blame on both sides. I have no doubt about it you dont have any doubt about it either. Only and if you reported it accurately, you would say it good morning its wednesday welcome to another episode of street signs. Want to kick things off with comments coming from the ecb saying that the ecbs president mario draghi will not deliver fresh policy messages at the jackson hole symposium which usually takes place the end of august in wyoming, in the u. S. He wants to hold off on that debate until the autumn. Thats according to sources familiar with the discussion once again, reuters reporting this morning that the ecb president , mario draghi, will not deliver a fresh policy steer at jackson hole. We know jackson hole is usually known forbig policy announcements, whether it comes from the fed or the ecb. A lot of people were expecting for fresh commentary on tapering, on winding down the ecbs Balance Sheet at that conference lets look at how the euro dollar is reacting. On the session it is sliding down by 0. 1 changing hands at 1. 1717 this is a big drop on the back of tho reportof this reuters ret lets get some insight from jeffrey sachs. Did you think we would get huge signals from mario draghi and the ecb in jackson hole . We thought it was possible. Even if we dont, we will have an ecb meeting, at that meeting mario draghi will indicate further tapering the qe program will end a year from now, the first rate increase is a year after that. Even as they taper t will ab gradual progress we look at the chart, we had Short Covering to 1 stnt. 12, ad since then buying. The prospect of tapering has spooked equity markets quite a bit since that famous speech the ecb tried to play down those expectations of imminent tapering and trying to taper the language thats what theyre doing once again today by relaying to tohoe sources that there will not be fireworks at the jackson hole symposium. It seems that the market is not buying the message from the ecb. The ecb is treading a fine line if were too hawkish we get a situation where bonds sell off if they taper four far longer than expected, that will imply weaker growth. At the moment we think equities still look cheap even as the likelihood of tapering increases. Bonds look very expensive across europe well continue that discussion in a bit want to show viewers whats happening with the european markets. Were back to fum trall trades. Yesterday was a holiday for some markets. The stoxx 600 is up 2. 61 were seeing that miners and oil and gas are leading the charge before we come to the sectors, heres a quick look at the european markets one by one. The ftse 100 up by 0. 75 the xetra dax is up by 0. 9 . The cac 40 seeing similar gains of 0. 9 . We have been higher for three days in a row now after that sharp sell that we witnessed last week on the back of the north Korea Tensions lets come back to the sectors as i said, basic resources doing well along with some other cyclic cyclicals. Telecoms, insurance, utilities the relative underperformers but still in the green more Business Leaders are quitting President Trumps Manufacturing Council following the firestorm over his response to the clashes in charlottesville. Aflcio president Richard Trumka and his deputy resigned saying the president tolerates bigotry and domestic terrorism scott paul also left the council. President trump attacked them on twitter saying for every ceo that drops out i have many to take their place walmarts chief executive duck mcmillan is joining the critics of President Trump in a memo he said the president missed a critical opportunity to help bring our country together. But mcmillan plans to stay on the strategic and policy forum lets get back to jeffrey sachs. I know youre not a political commentator, but we have to talk about the impact on the u. S. Equity markets theres a lot of uncertainty about policy and a lot of distraction about what the president of the United States was wanting to do for the u. S. Economy. Does that make you a lot less constructive about where u. S. Equities are headed . No, it doesnt. We expect that the u. S. Growth outlook will be reasonably resilient in the year ahead at about 2 if we get tax cuts towards the end of the year or early next year, that will give further impetus to u. S. Growth that will be reflected in earnings, the recent earnings season that been a good one for the u. S. We think its late cycle, you need to be more selective but theres upside in the market you see that nonu. S. Techities witechit equity also outperform equities over time. Will this happen if you see upside potential for u. S. Stocks we had multiyear underperformance of markets, and we expect multiyear outperformance now the pe multiple discount to the u. S. Is 30 . The underperformance is substantial over the last five years. Were starting to see a turn its the early stage of that process. Inflows into european equities have picked up after nine years of significant outflows. We think that trend will continue where are the inflows coming from from the fairly fickle Retail Investor or the Institutional Investor who is finally coming on board they take longer to make that big tactical change. Its partly institutions. They look at european equities year to date up 18 in dollar terms. Thats only up 6 in local currencies so theres a big euro incentive to add to european equities. Secondly, we have fixed income investors incentivized by european equities. The gap between european dividend deals and fixed income is historically wide at around 3 we also got flows from fixed income investors finally the dividend deals in european equities are high, 3. 5 unusually so for a late cycle period thats encouraging dividend yield investors. Lets talk about some markets you do like in particular. One stood out to me, that was germany. If the cyclical recovery continues, that is a sure bet. Why not. That said, we have the euro strength, which could be a bit of uncertainty are you not worried about where the euro is headed, if were going down the path of tapering . No, we think the quality of European Companies is high a lot of them are value added producers. The havent result season has been strong. We had 85 of European Companies reporting. 60 beat the consensus for net profits. In germany that was particularly so so we think that the multiples have scope to expand further the earnings forecast for europe as a whole is mid teens, which is very reasonable can i take you back to germany . You say thats one of your overweights. I know were a month or so away from the German Federal elections, probably not a whole lot will change. Angela merkel will probably be the next chancellor of germany again. Its not quite going to be the macron moment that we saw for france why do you think there will be further upside for german stocks firstly, with the macron moment we had a discounting of a possible populist victory in france we dont have that in germany. Were not coming off a low what we do have in germany is strong Economic Data the recent ifo indicator, which measures sentiment amongst the manufacturers is the highest its been since it started in 1991 other measures like retail sales, car production, looking strong so the fundamentals of germany look strong. We think theyll look strong through the german election and into next year we spent a lot of time talking about equities what about bond space a lot of guests we have on the show tell me steer clear of bonds at this point. Maybe you want to go into other parts of the bond markets. Certainly not governments. Would you agree with that view yes we are underweight bonds globally, and within europe particularly underweight in sovereign bonds. More constructive in corporate bonds. We prefer high yield over Investment Grade even high yield has not performed that well. We have seen inflows, but the spread between high yelled aield Investment Grade is not that compelling the spread has fallen from 300 basis points to 100. You need to be more selective, but its a benign upcycsigupcyc. Theres still opportunities, and the gain is respectable, and youre getting reasonable coupons if you are selective within high yield. Within the sovereign space, we have an unusual situation. 40 of solvers in europe are negative yielding. Not giving us great value. What is the biggest risk to markets now . Is it tapering the pace of tightening is it something that donald trump says is it china . What keeps you up at night what are your clients concerned about . Earnings is the key risk. Markets at the moment are not cheap. So they need earnings to come through in order to justify the multiples. Were confident they will over the next 12 months all right jeffrey, thank you very much for that you seem optimistic. In other equities news, akzo nobel has reached an agreement with Elliott Advisers in a deal which sees the activist investor end Legal Proceedings against the dutch paintmaker for three months elliott says it will support the nomination of the new ceo, Thierry Vanlancker and two other board members. The two companies have endured a pretty hostile relationship since akzo nobel rejected a takeover bid ppg earlier this year elliott has raised its stake in bhp billiton this allows Ken Mackenzie to take constructive steps for bhp and owners elliott called bhp to exit the shale business and end all parts of its petroleum business. Get in touch with us on twitter, streetsignseurope cnbc. Tweet me directly, carolincnbc. Do send us your thoughts on anything you see on the show and maybe about this coming up on the show, after a short break, runway wars air berlin filed for bankruptcy sparking a Battle Royale for assets well examine who is eyeing what after the short break. And i got robbed. Thats why i started lendingtree the only place you can compare up to 5 real offers side by side, for free. Its like shopping for hotels online, but our average customer can save twenty thousand dollars. At lendingtree, you know youre getting the best deal. So take the power back and come to lendingtree. Com, because at lendingtree when banks compete, you win. Fixodent plus adhesives. Theres a denture adhesive that holds strong until evening. Just one application gives you superior hold even at the end of the day fixodent. Strong more like natural teeth. Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost, so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Welcome back shares of fiat are trading up on speculation that a Chinese Company is considering buying the italianamerican carmaker. A report on the potential deal first appeared earlier this week on the u. S. Based website automotive news. Fiat declined to comment on the report fiat has joined bmw to join selfdriving car technology. The Group Includes intel and continental and delphi it aims to proviews fuduce fully Automated Vehicles by 20 it 1. T 2021. The uk is setting out a plan to avoid a hard border with ireland. There are concerns of inflaming regional tensions. Social democrat leader Martin Shultz has attacked chancellor Angela Merkel for what he calls her zig zag policy on diesel vehicles he says that creates uncertainty which is problematic for drivers and auto workers she recently came out in support of banning diesel cars separately Wolfgang Schauble says the Auto Industry made Serious Police takes and needs stronger regulation but offered no detail. The Campaign Mode by both parties is in full swing now the battle to acquire air berlins assets is underway following a bankruptcy filin yesterday. Lufthansa says it is in talks to buy parts of the Airline Easyjet is also reportedly in talks. Ryanair is heading back to a potential lufthansa deal arguing that a takeover would break competition rules. A quick look at how the airlines are faring lufthansa continuing yesterdays strong gains up by 1. 5 . Yesterday it added on 4. 7 air berlin just a penny stock down, trading at 45 cents. Easyjet and ryanair, even though theres uncertainty about what sort of assets they would snap up, they are trading higher to the tune of 2 to 2. 5 as i said, air berlin stock continues to head lower in the session following from yesterdays sharp losses the main rivals are trading in the green and hopes that air ber l air berlin will cut capacity in the skies. Stephen furlong joins us now who ultimately will be the bigger winner . Is it clear to say it will definitely be lufthansa . Good morning. For sure the biggest beneficiary of air berlins demise is lufthansa if your biggest competitor in your domestic market is going into administration, and youre going to be involved in the solution, and the terms and conditions, favorable. I know the cfo at the havent results was talking about the fact that air berlin had too high costs, too high debt, also potentially cartel issues. I think what happened is the solutions have been found to all those three things, and theyre going to benefit and probably buy the bulk of the assets of air berlin maybe their strategy of waiting for years and years and just criticizing from the sidelines was a very smart move in the longer term talking about lufthansa here it seems like now they wont have to buy the whole company, they can cherry pick and buy the best bits without the double and some loss making issues. No yeah. I mean, i think the minority investor in air berlin are clearly cutting their losses and they are likely to almost jump horse to lufthansa in terms of, i guess, deepening relationships there. It certainly is good for lufthansa. Overall it should be good for the sector in that it helps sentiment in the sector, maybe stocks are rerating a bit on the view there may be a bit more consolidation in europe, which, of course there was in the u. S. Over the last number of years. Anything where theres a bit less capacity in the market is helpful. A lot less capacity is something that we can do with in the European Space thats been putting pressure on prices, rates and overall. You know, obviously italia air, air italia is in administration. It ceases to exist now we have air berlin do you think this is the end of it are the troubled children gone now . Well, theres no, lets say, immediate obvious other candidate. But i think well probably end up with more m a in the sector over the next couple of years. You know, iag under Willie Wallace have been inquisitive over the last number of years. They did the deal where b. A. Merged with bmi. Its kind of similar here, lufthansa and air berlin they bought air liner lingus rey theres other government owned airlines, expanding a lot is norwegian. I think there will be, over time, more consolidation because were not at the level of the u. S in the u. S. Theres four airlines controlling over 80 of the market in europe we have the Top Five Airlines only got about 50 of the market so its much more fragmented than in the u. S. Yet, as you said before, there are always going to be antitrust issues ryanair hit out at that yesterday, informing the Eu Commission of what they call obvious conspiracies, saying that the lufthansa takeover would breach the Competition Laws do you think theres any merit in that . Do you think the Eu Commission who said theyre looking at this will investigate this further and will find something . Well, whether theres merit or not, i dont think they will find something i do think that ultimately this deal will happen because you have a situation where otherwise air berlin will run out of the government loan very quickly the 150 million. So there needs to be a deal happening. And this is in effect a bankrupt airline. I think the reality is that its likely to happen there may be merit in it but i think buying the assets rather than the company, and theres a couple airlines involved, possibly easyjet i think what will happen is that airline berlin have strong market shares in the german domestic market. Youll have lufthansa and air berlin combining maybe a bit less combined traffic. That opens up all the airports in germany who will ultimately want traffic from the likes of ryanair and easyjet. You will see longer term those carriers entering the German Market nearterm good news for lufthansa and overall good news for the sector clearly air berlin what youre seeing is failed companies failing, and stronger airlines prospering. Okay. All right. Thank you so much for that i guess lufthansa only getting stronger, up 1. 5 in todays trading session. Stephen furlong from davy research. Carlsberg has reported better than expected Profit Growth in the first half they saw special profits rise 20 but revenues missed expectations carlsberg maintained the 2017 outlook as the company benefited from growing growth in asia. Maersk said a cyberattack which struck the Company Earlier this year will negatively impact Third Quarter results by up to 3 300 million the danish shipper posted a net loss where analysts expected a net profit reven