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tv   Street Signs  CNBC  October 17, 2016 4:00am-5:01am EDT

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good morning, everybody. welcome. you're watching "street signs." i'm louisa bojesen. >> and i'm caroline roth. these are your headlines. >> since the brexit vote, the prime minister suggests to continue paying into the eu budget to gain access to the markets. and shareholders at unicredit are looking to join to make the third largest vendor.
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>> we want to decide for ourself the future and the future of this big bank. not on the same page. shares of pearson are sliding after an earnings boost. and the iraqi army launches an offensive in mosul even after the terrorist army arrives. good morning, everybody. welcome. fresh start to the week. >> good morning. >> a busy week. last week flew by. this week to come will be the same. we are glancing at the overall markets at the moment. the stoxx 600 drifting a little lower. we have seen a negative session
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in asia. we'll get to that in a bit, but here in europe just drifting a tad. the comments from janette yellen could overshoot the level as people repositioning a tad. and a little give and take between teresa may, the prime minister here in the uk, her comments with the regard to the bank of england and whether their policy is right. going head-to-head against mark carney as well. we'll talk more about that, too. when it comes to the main european equity markets, a mixed picture here that you have been seeing in the last hour of trade. and just glancing at what we're seeing in terms of repositioning, you have basic resources higher. and oil and gas up the most by .70%. they are holding on near $50 per barrel. having had the fourth week of
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gains. let's look at what the yields are doing this morning, we just mentioned those in the headlines. we are looking at germany and the fixed income stateside, we're hitting new all-time highs since the brexit vote when it comes to the british ten-year. and you're looking at the columns that could impact the fx markets because higher yields could mean attraction of foreign investors. >> we'll talk about this with the european head of global markets rep search at tokyo bank of mitsubishi. derek, the rise in the bond yield seems to be the big story in the markets right now. and there's a consensus among yellen and carney that inflation overstayed is okay. is that warranted? >> yes, i agree, there's a shift
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in the strategy since kuroda mentioned the deepening yield curve as a potential positive to be looked at in august. the markets have been moving that way. and yellen's speech on friday fits in with the narrative to push yields higher. well, is it justified? i suppose to answer that, central banks are running out of options. they look to be going back to this idea of pushing forward on the guidance strategy and pushing towards making the markets believe that they can engineer inflation issues, which i must say i'm skeptical about. other things need to take place for that to be credible. in particular, how governments push forward with fiscal policy. if that was pursued over the next 12 to 18 months, it lags. but simply by forward guidance, i'm not that convinced. >> especially in the uk, is it
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the right kind of inflation that we'ri we'rie looking at? because it's not inflation overshoot because the economy is doing so well, right? >> absolutely. again, it's a little bit different in terms of the boj and the bank of england. the bank of england is saying it will happen, but they are going to ignore us. there are specific reasons for that. so the bank of england is saying something different than the boj surge. during this time when they were north of 3%, they were bringing about cognitive easing. >> do you think yellen is changing or the fed is changing the way they are looking at
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inflation? or for a while now how do they indicate to be flexible in the current environments? >> this is the point i have made to our clients today, and that is that the dollar hasn't done anything. if anything it strengthened a little bit. in theory, the central bank is telling you to ignore the inflation overshoot effectively allowing real levels of interest to go lower, should be currency negative. but i think what the market's interpretation of yellin's speech, yellen is confirming what they have been doing, not what they're going to do. the fact they raised interest rates once this year, maybe once or twice next year, they're already pursuing having a monetary policy in place hence the dollar overshoot. >> what do you think is next for the ecb then? if you're telling us kuroda gave us an indication with regards to
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allowing relaxation, we're looking at inflation forecasts. are we going to hear more from the ecb on this? >> this is the interesting aspect if you take the four major central banks. this week with the meeting today, certainly at the press conference on thursday is going to be asked about this. and i think he will give a very strong rebuttal in terms of the idea of the ecb allowing a period of inflation overshoot. i think politically even if he was tempted to go along with that, politically that could leave the ecb open to a lot of criticism. so i think a very strong rebuttal against that and i think you'll be very strong in sending a message of that being something to pursue. >> do you think it will be relief for some of the people concerned about an early taper? that's something the world markets worried about the week
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before. >> if he refutes, rebuts the idea of the overshoot, that rebuts the idea of tapering. but i think he'll give a pretty strong message about that as well, that the current stats of monetary policy is important and inflation remains way below target to justify a continuation. we won't get the explicit signal today but certainly by december we have a plan in place to allow for an extension of the qe beyond march next year. >> apart from the ecb, what are you concerned about? >> well, obviously, we have the final tv debate, but certainly my clients that i speak to have a sense of concern about a trump victory has gone away somewhat. and i think one thing we're highlighting today is the interesting article in the ft about the potential collapse of the canada eu trade deal. personally, i thought that was pretty much done, but the
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balance that took place last week, it looks like belgian, for example, a court case has forced the belgian government not to approve it. and we could go down a road in which the canadian eu trade deal collapses. of course, that fits in with the hot idea of protectionism, anti-trade populism that is growing around the world. and, again, there are implications for the uk in that. the idea is that the uk will be able to create a bilateral trade deal with ease and be questioned in the canadian deal bounces. >> derek, thank you for that. derek, european head of global research at bank of tokyo ufj. at the fed's last meeting, rosengren said he would be comfortable waiting until the december meeting to hike rates. he told newspapers that
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elections shouldn't play a significant role, but a delay of one meeting wouldn't make an economic difference. speaking to cnbc on friday, rosengren said the december rate hike seemed appropriate. >> my views haven't changed. what's changed is the economic conditions. so when we have an unemployment rate that is around 10%, we should be very aggressive in our monetary stimulus. when we have conditions like we have right now, which is we're very close to low employment, the unemployment rate is at 5%. and current inflation is still below the 2% target. those conditions are very different. at this point the concern about overshooting on what is the sustainable unemployment rate. at that point i have to be concerned about whether if we did overshoot significantly on the unemployment rate, whether we would end up tightening much faster and probably short anything the recovery.
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>> now banco popolare shareholders are giving the green light to merge with banca popola popolare. >> this merger has been talked about for months. there are issues regarding the satisfaction with the deal. but it did go through with the 72% of the shareholders approving top merger. 99% of shareholders approve ed
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this deal from banco popolare. it is expect in the next three years to continue with its restructuring, so we'll reduce costs because of the newly e merged entity. overall, it has been a positive bit of news that comes in on the banking sector that has been looked upon with such skepticism as we have many issues that we are facing here with the italian banking industry. but the ceo of the newly merged bank is very positive about what can come from this merger. this is what he had to say. >> yes, we're very happy for the final result. we're very happy for the meeting of today, which was basically with the vast majority of the colleagues, which wanted to be here, wanted to decide for
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themselves the future. >> so while this green light is positive news for the italian banking sector today performing in positive territory with the banco popolare and banca popolare di milano in the green. they could be going for a cash call soon, so certainly the $360 billion in loans that the banking sector is facing is an issue of the day. but we are off to a positive start this monday morning. >> claudia, good to see you. thank you for joining us live out of milan. speaking of banks, deutsche bank is reportedly reviewing u.s. operations ahead of the settlement with the u.s. justice department over mortgage bonds.
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a complete withdrawal would be unexpected but it could involve giving up the investment banking operations in the country. deutsche bank vowed to step up cost-cutting measures across its business to advance its turn-around plan under the ceo john crier at a faster base since investor concerns surfaced over the $14 billion boj fine. we spoke to the chairman howard davies about the regulatory challenges they are facing at rbs. let's listen in. >> the fca is investigating which makes it difficult, because the fca will fairly soon produce their view on that. so it's a bit awkward for the bank to prejudge that, but we have looked at the past carefully at a way in which distressed businesses were handled in the aftermath of the
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recession. we do have a way to de-stress businesses in 2008 and 2009 and beyond. and we accept that in some cases that was not done as well as it should be. the people we communicated to did not know what was happening to them. so we accept all that, but what we don't accept is that there was a systemic attempt to put people out of business for the benefit of the bank. but it's the fca to judge all this and we hope they do so soon. >> why are you worried about the reputation of the bank? in an independent survey said trust is high. do you think it will be reversed by the way it is seen by many customers? >> it is something we take extremely seriously. since the major executive led a culture of change, we removed all bonuses from the branches which we believed was distorting their attitude to customers and
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pushing them into incentivizing them to sell. i think we are the only bank that has done that. is this something that if you were a customer you would be happy to have done to you? so we have been engage in a massive culture exchange. one of the things is the length of time the past errors and emissions and sins if you like take to investigate, you're always kind of -- today you're doing something but dealing with the problems of yesterday. that's a frustration. i agree with you, the bank's reputation is absolutely crucial. >> as usual, e-mail the show, get involved. the address is @streetsignscnbc. @carolinecnbc. >> tell us what you're following. maybe cat videos, hillary
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clinton is into that now she says. >> she does say that. you can find me @louisabojesen. we'll be talking about the election later on in the show. still coming up, a monument tall step forward against climate change. find out how a deal over the weekend could cut the world's temperature by a degree. we'll be back in two. i know you're my financial advisor, but are you gonna bring up that stock again? well you need to think about selling some of it. my dad gave me those shares, you know. he ran that company. i get it. but you know i think you own too much. gotta manage your risk. and you've gotta switch to decaf. an honest opinion, even if you disagree. with 13,000 financial advisors, it's how edward jones makes sense of investing.
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welcome back. you're watching "street signs." we'll get to some earnings news. pearson reiterates his 2016 guidance saying it's in line with expectations. here comes the brexit effect, pearson says if current exchange
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rates persist, the share will increase by nearly .50. and h&m said in september that the weather has negatively affected sales in many of its markets and warned of an increased risk of markdowns in its fourth quarter. sinochem said it had no communication with chemchina over a merger. no written or oral information had been received. this follows reports that the two were considering a merger to create a $100 billion giant to send sinochem shares higher last week. zto express is set to launch the biggest chinese ipo in the u.s. this year raising up to $1.5 billion. let's get a check on the asian trading action, we'll go out to
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singapore. pauline, what is going on? >> first we have our eye on the casino stocks after crown in australia closed down almost 14%. this is after news came out of mainland china that 18 employees of the casino and resort company in mainland china were detained over the weekend. and the chinese foreign ministry said they were detained for, quote, suspected gambling crimes. crown will be trying to contact their employees as they aren't quite sure what the main reason is for the problem. but we're seeing the problem have a domino effect in hong kong on casino stocks there. the hang seng is down .80%. with melbourne international closing down 7%. crown has a 20% stake in melco entertainment. take a look at the nikkei closing up a quarter percent. the weaker yen has been helping exporters with the dollar/yen
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trading at 1.40. tepco is trading down after an anti of nuclear candidate in japan won a regional election. so that puts pressure on prime minister shinzo abe to get nuclear up and running back in japan. louisa and caroline, back to you. >> thank you, pauline. thank you very much. now around 150 countries have agreed to cap their carbon emissions at a meeting in rwanda. including the eu, they have said they will cut some of their gas emissions by 2019 while others agreed to freeze their emissions. they are hoping to beat the competition by coming up with more environmentally-friendly solutions. now the u.s. secretary of state john kerry spoke with enthusiasm about the potential
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environment impact of the deal. >> i'm very excited about it. i think it's a monumental step forward of addressing the needs of the individual nations, but it will give us the opportunity to reduce the warming of the planet by an entire half a degree centigrade. it represents multilateral patience and diplomacy efforts over a long period of time. bank of america merrill lynch is looking for another tool to fight in climate change. joining us is tbeija, tell us wy green bonds are so key in this environment. >> take a step back. these are like instruments that are specifically marked for environmental solutions. so all thisies back to overall
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climate change in extreme weather. so extreme weather now covers roughly 10% of the world at any one given point. 0.01 to 0.2% between the 1950s and the 1980s. so of course the detrimental impact is significant. globally, we believe 1% to 5% of global growth could be erased on the back of climate change. so the investment need for this is of course extremely high. and the financing gap that we currently face for clean energy transition as well as energy efficiency is somewhere between 650 to 860 billion dollars annually between now and the year 2030. so we think that green bonds specifically could be a very good tool in linking private capital for the environmental needs. >> so if there is that gap, how many issues or issuers are entering the market at the moment? are we seeing supply in tandem with demand? >> absolutely. at this point we have nearly 400
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different air issuers coming from 28 different countries issuing in around 24 different currencies. actually, year 2016 is setting up to be the fourth consecutive record-breaking year in issuance. and we had 56 billion thus far through the end of q3 taking the market to roughly $152 billion. so by the end of this year, we do expect to reach the bull case scenario of $80 to 90 billion in issuance, meaning the overall size of the market will double versus where we were a year previously. >> how do we know whether a bond is actually great? how do we know the quality of the underlying bond is? have the rating agencies developed that? do they have a scale on how to determine that? >> a month ago in the g20 meeting one of things set forth was increasing standardization of the overall market. so back in the year 2013, that was the first year where real green bomb principles were
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officially published. however, we are now taking standardization down to the next level. we did have the s&p as well as moody's now formalizing a greener scale within all the self-green label bonds we see here on the markets. we have specific green bond indices being introduced globally as well as exchange lists introduced currently both in europe as well as asia that are listing the green bonds. >> given the hunt for the yield, i wonder where the green bonds fall on the spectrum. how much do they yield on average? is there an average for that? >> generally they yield exactly in line with their non-green counterparts. if you take a look at who is issuing, it's a wide spectrum of the traditional multi-lateral banks, to corporate and municipal banks as well. some has been coming from the emerge markets and the corporates who roughly comprise 57% of the market. within that, financial services has been a number one sector as
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they are a natural conduit for funds, they comprise roughly 60% of overall corporate issuance. >> you're saying china still remains the growth market. >> absolutely. in many ways this makes sense. china requires 2 to 4 trillion worth of annual investments within the environmental space. and the government has been very vocal saying that the max that public spending can really fund for is roughly 15%. so broadly speaking as a country, they are targeting 46 billion of green bondi issuance this year. we think that the yens will likely lead the charge. >> do you know who is a big fan of the green bonds? >> who? >> mark carney. he said it's a great opportunity but roughly represents 1% of the global financial institutions around the world. but he sees a big opportunity there. we'll leave it there.
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baijo ma, thank you for joining us. we need to take a break. check out our blog running throughout the entire trading day. we'll see you in a second.
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welcome. you're watching "street signs." i'm caroline roth. >> and i'm louisa bojesen. your headlines this morning -- >> a report suggests that the uk prime minister gave access to the single market. another step closer to a deal. shareholders at banco populare are looking to merge with banca
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popula populare. the polls widen in the u.s. election rate. a new poll puts hillary clinton ahead by double digits while her rival has to combat more accusations of sexual wrongdoing. and prime minister al abadi is claiming victory against the isis group that has arrived. good morning, everyone. here's a quick peek at the u.s. futures, the s&p 500 up by 7 points, the dow jones could fall to 43. and the nasdaq down by 15 points. this is after we saw a fairly strong end to the week last week after better than expected bank earnings. but for the week the u.s.
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indices were down and the earnings parade continues this week. plenty of companies on tap with their quarterly results. here's what is going on in the european session. the ftse is seeing the tune of 0.12%. the xetra dax is down by 0.38%. and the cac 40 is down 0.31%. here's what is going on in the bond markets, we are seeing sell-off when it comes to the ten-year gilt yield at 1.2%. we have seen huge jumps over the last few weeks in fear because of the hard brexit and also increasing inflation concerns. we have seen all the policymakers like janet yellen and carney speaking about the overshoot on inflation and how they are okay with it. let's show you what is going on
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in the currency space, a lot going on. the dollar is now at the strongest in roughly seven months. and the net dollar positions are the highest in more than eight months. and we're seeing a continuing decline for the cable pair, 1.2164 is adding on to the 2% decline from last week. and last but not least, we want to show you where the euro/dollar is trading this week. hillary clinton maintained a double-digit lead over rival donald trump in the two-way match-up. with just over three weeks to go until election day, donald trump holds the support of 41% of likely voters. 51% of likely voters, meanwhile, support hillary clinton. to put the numbers in a bit of perspective, in 2008 president obama beat john mccain by 7 points nationally. and mitt romney by 4 points in
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2008. meanwhile, donald trump has claimed that the election is rigged against him tweeting, quote, the election is absolutely being rigged by the dishonest and distorted media pushing crooked hillary, but also at many polling places. sad. the tweet came only hours after trump's running mate mike pence said on nbc's "meet the press" that the campaign will absolutely accept the results of the election. nbc's edward lawrence is in washington. edward, we have the issue of the polls widening, whether or not that's an indication of how voting actually will pan out is a separate issue. also, the issue of whether or not this claim that the election is riggeded or the polls are rigged, whether there's any evidence to back that. >> exactly, louisa. this is getting very messy at the moment. donald trump it seems that a pattern emerges, right before a big debate, a big bombshell drops. donald trump as you saw stepping up his claims that the election
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is rigged. he also tweeted out that supporters of hillary clinton are animals because some of them, or he believes that some of them firebombed a gop headquarters in orange county, north carolina. now as the politics turns violent in north carolina, trump is claiming that reporters are helping to go forward or promote that rigged election process by promoting false stories about him. he claimed that he never gave unwanted sexual advances on women. governor mike pence his running mate depended trump saying reporters in the media are missing the real story, and that is the clinton e-mails. pence claims that some of the e-mails show a pay for play politics and also show corruption. in the e-mails released by wikileaks, there's proof. but tim kaine says we can't rely on the fact wallty of the e-mails released because of russian involvement. and hillary clinton has no campaign events before the
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debate as she's preparing for the debate, as she has for the other ones. donald trump is on the campaign trail in wisconsin and colorado before going to las vegas for that final debate on wednesday. louisa? >> edward, thank you very much. edward lawrence villa nbc news. here in the studio we are joined by the vice president of global strategy at pew research center. james, good morning. >> good morning. >> we have been looking at the u.s. electorate and done research. talk us through the main findings. >> right. well, something we do at the pew research center on a regular basis, we are looking at the political landscape of the united states, not just the election. i think what is remarkable about the election, there are many things, but how different the two camps are in terms of supporters for clinton and trump. they really see a different america. trump supporters and e our polls are clearly believing that the country was worse off and the
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future investors think the future doesn't look bright for future investors. >> is this more on what is happening domestically or also about foreign involvement? >> americans are leaning towards focusing on their own problems and domestic issues. that feeling is stronger among trump supporters. on economic issues and engaging the economy, the americans are very divided on that. and the trump supporters are very convinced that the global economy is not a food thing for t them. >> some are frustrated to back
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donald trump and are looking to switch over to hillary. >> we didn't ask about those in regards to donald trump and hillary clinton, but we have asked how strongly people feel in favor of their candidate. the interesting thing is how pronounced negative voting is going to be. the mote vase is much more in line for people they done want to vote for rather than i'm voting for my own candidate. so it is about 3/4 of supporters voting against hillary clinton and 3/4 are voting against donald trump. to your point, it's not clear how easy it will be for people to change their minds in that sense. >> and time and time again we hear this is the most negative companion and negative voting innist hi of the u.s. elections. i want to talk about the so-called media conspiracy that donald trump is talking about
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themming a them being rigged. many do believe what trump is saying. is that a big concern? >> we didn't ask about the media's role in this idea, but we asked directly to voters, do you think that your vote will be counted accurately? we ask this a few week ago. we're very confident their vote would be counted accurately. it was about 6:10. >> you can head to youtube to see the material out there and have asking trump supporters, is the vote rigged and a lot of people said yes. but only rigged if trump losing. when looking at free trade, we're looking at some of the trade deals as well, it seems like people aren't fans of
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donald trump or any international agreements. >> the contrast there is pretty stark. so the democratic party supporters are about 6 in 10. free trade agreements are a good thing for our country. only about a third of the republicans say the same. that's not just trump supporters but a big change for the republican party overall to have that less than engaged. >> how are people responding? is it just really this big divided american population? >> i think it is the negative campaign you mentioned before. we compared our findings to 2008 when we also asked about what was the motivation? are you voting for or against? at that time it was 35% of people said they were voting against obama. now 53% are saying they are voting against clinton.
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it was 25% against hillary. now 25% voting trump. that is really a remarkable change. >> james, thank you. we would love to hear what you think. both donald trump and the gop raised more than $200 million from july to september according to the federal election commission data released on saturday. receiving a significant boost from several business leaders. among the republican nominees is todd donors. a silicone founder investor who will donate $1.5 million to the campaign. also chipping in is billionaire carl icahn and john paulson who brought in lots of money over
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the weekend. u.s. vice president joe biden warned the yigts would respond to russian cyber attacks after the u.s. formally accused the country of waging a campaign against the democratic party in the lead-up to the u.s. presidential election. and in an interview on nbc's "meet the press" biden was asked what the obama administration is doing to respond to the perceived aggression. >> we're sending a message. we have the capacity to do it. >> you'll know it? >> you'll know it. it will be a time of our choosing on the circumstance that is have the greatest impact. look -- >> good enough to get him to back off? how concerned are you that the country is actually in question as a result of this election?
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>> i am not concerned. the reason i'm not is we are working very closely with the department of elections in this country. number two, the american people are pretty resilient. number three, with the capacity to -- rig the election, it's not what people think. >> we were caught by surprise. >> exactly. meanwhile, the russian president vladimir putin says the u.s. response to russia's hacking is only rhetoric and only confirmed that the obama administration develops their own threats. he hopes bilateral relations with the united states will improve after the election. demonstrations were held yesterday over the trade hour between the u.s. and canada.
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our first guest was talking about that. protestors urged lawmakers to reject the ttip and ceta deals saying they would destroy european farming and allow genetically modified produce. now scotland's first minister nicholas sturgeon stays it's likely there will be another referendum on scottish independence before 2020. a second referendum will be called protect scottish interests if necessary. and ahead of the uk brexit vote, boris johnson called it "semi-parodic." this was just days before he decided to back the campaign. a sudden change in heart there.
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>> you're also allows to write your thoughts on paper and see which one appeals more to you. before you go public, take a stand. you can do that in private in your diary. now the iraqry army launched an offensive on the city of mosul. it's seen as the capital of the isis caliphate. the offensive is backed by the u.s.-led coalition and is expected to be one of the largest military operations in the country since the 2003 offensive. >> we will raise the flag of triumph and there will be no place for unrest among us. all attempts --
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>> meantime, iran's deputy oil minister said opec's decision to limit output is a baby step in the right direction. speaking to reporters this morning, he said the exact levels of production by each country would be negotiated the. a quick check on the oil markets, brent crude is off by .05%. are we going to see more? we'll see more coming up on "street signs."
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hi, everybody. welcome back here to "street signs." tesla is say iing they have a major announcement to unveil on wednesday. they could be planning to debut an updated version of the at-home storage devices. the german government is wanting tesla to stop using the word autopilot saying that the carmaker's use of the term is dangerous. this comes after a tesla driver was killed in florida earlier this year when his vehicle hit a trailer while in autopilot mode. the indian prime minister is calling the country, quote, the mother ship of terrorism. he was speaking at the summit in
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the indian province of goa. here is a wrap-up of the emerging market of leaders. >> the discussion here was global terrorism and global security-related issues. in fact, at the beginning of the summit we saw the prime minister modi talk about how pakistan sponsored global terrorism. in fact, without naming pakistan, he said there's a neighboring country which is the mothership of all terrorist activities. with his interaction with the media after this meeting was over, mr. modi mentioned that many countries have adopted principle, any country that supports terrorists actively of any kind, it is as big a threat as terrorists. however, we did not see him succeeding in putting the blame on pakistan in a joint statement. we saw the mention of condemning terrorist activities in how the
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world needs to cooperate to stop these activities. >> our response to terrorism must therefore be nothing less than comprehensive. and we need to act boldly individually and collectively. selecting approaches to terrorists, individuals and organizations will not only be -- but also counter productivity. >> in addition, we did not see more on what the definition is for how to combat global terrorism. india seeks $500 billion in intra-brics trade by 2020. also, we did not see movement on proposing to have a brexit-sponsored credit rating
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agency. we understand that china was not very supportive of this proposal with more discussions going forward on this. there's no substantial outcome from this here, but we only saw increme incremental positions being taken on issues of their interest. with that, back to you. let's move on despite economic and geopolitical uncertainty. the latest ey capital barometer survey forecasts m&m activity to pick up in 2017 with a record of 57% of respondents saying they are actively pursuing deals in the next 12 months. the global vice chair of ey is joining us around the desk. good morning. >> good morning. >> 57% are looking at m&a. what type of m&a? >> it's mainly smaller deals.
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most of the respondents are looking at deals in the $250 million to $1 billion range. so there will be mega deals as we have seen in the past. those will come and go. but we do see a trend towards smaller deals and that is driven by technology, driven by the blurring of sector lines and companies trying to maintain competitive advantage. >> or is it driven by the fact that the companies simply can't loosen the toggle by themselves because they have run out of steam in a position of weakness? >> nearly half the respondents are telling us organic growth is important to them. 50% of them planning a deal. look, everything has changed for ceos expect expectations around stake holders for growth and profitable returns. so when you look at what has changed, it is lightning fast technological advancement. it is uneven geographic growth. and it's political nationalism
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that we haven't seen before. and with those kinds of uncertainties, you would normally expect a decline in deal activity. but in fact we're seeing the opposite because technology, for example, is driving companies to acquire, protect and gain market share. geographic growth, uneven geographic growth is causing companies to stretch across borders to grow their businesses. so m&a is an essential part of the tool kit. >> sounds great except if you're sitting in the uk. we're falling out. the uk is falling out of the top five places to do m&a with the brexit vote really hitting. >> i think you have to look beneath the results. the uk fell from two in our previous survey to number seven in this survey. so that is not an enormous fall. and if you look at u.s. respondents, the uk fell from number three to number four with u.s. respondents. it feel from four to six with chinese respondents. so i think you have to look at all the surveys with a grain of salt. if you had looked at a survey
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that happened the week after brexit, you would have seen more negative results. i think the executives are taking the medium to long-term view and expect the uk to be back in the top five the next time we take the survey. >> so in a year? i mean, a year will make that much of a difference? >> oh, i think within the next six months to a year, yes, you'll see the uk creep back into the top five. you have already seen a number of big deals, nice deals, household names post-brexit and i think that will continue. >> is it because of the low currency? because it is a lot more luring or because the uk has very good, very sound businesses? i mean, we saw that big deal, soft bank and arm, maybe that was a once-in-a-lifetime deal. >> it's because the uk has great assets, great technology, great talent. it is not because of currency. currency can change timing of deals on the margin, yes, maybe, but deals are done for strategic reasons, not to take advantage of currency. >> are deals done to grow the
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sector that companies are in or the expectations to come? or is it to jump over into another sector by taking over another company? >> well, i would define it as expanding your core business as opposed to jumping sectors. so effectively what's happening with technological change and disruption is you see a blurring between automotive and tech n technology. you see blurring between consumer and different times of consumer, industrial products are becoming more aligned with technology. so are the deals jumping outside sector? it may appear that way on the outside, but it's really expanding their core business to take advantage of how those sectors are blurring. >> steve, thank you very much. steve from global vice chair of the transaction advisory services at ey. >> thank you. and now banco populare just flashing through here in my ear.
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and we are looking at banca popolare up by 4% or so. shares are being halted. let me grab the latest on this. triggering an automatic suspension due to the merger approval we were just talking about with claudia consulting in milano. this merger was approved. they have been indicated higher and now seeing a suspension in the shares. before we leave you, a quick look at the u.s. futures looking softer across therd into. that's it for today's show. i'm caroline roth. >> i'm bojesen. have a good day. we'll see you tomorrow. greatow we're talking within a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates. save money on your phone bill, invest it in your small business. wouldn't you love more customers?
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not so fast, elon musk is pushing back a product deal. and the race for the white house, a new nbc news/wall street journal poll gives hillary clinton an 11-point lead nationwide. it's monday, october 17, 2016. "worldwide exchange" begins right now. good morning. happy monday. welcome to "worldwide


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