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tv   Street Signs  CNBC  November 5, 2018 4:00am-5:00am EST

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welcome to stre"street sig." european equities struggled to make gains hopes of a trade truce fade. the director general of the wto tells cnbc china's approach to negotiations is encouraging. >> i think it was very much welcome by the international community. i certainly saw it as a very positive speech in the context that we're living today. british banks are the surprise under performers in the europe wide stress test, but the
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italian lenders feel the pressure as two of them trade in the red despite passing their health checks. the republicans and democrats hold a final flurry of campaign rallies as polls suggest that polls will outstrip previous mid term elections. >> this is one of the most important elections of our lifetime this is a very important election i wouldn't say it's as important as '16, but it's right up there. it's right up there. it really is >> and iran goes to defy u.s. sanctions by continuing to sell its oil calling the measures psychological war as washington speaks with eight major crude importers. happy monday, everybody. "street signs" is back let's check in on how markets have been doing over the last 48
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hours or so. starting off with what was a very soft end to the weeks for u.s. markets again led by weakness in the tech sector with the nasdaq down about 1% that weakness has continued into the asian session. some of the major forces there also trading in the red overnight. what we see for europe this morning again is a bit of a dim start to the week. the stocks here at 600, trading down by .2% at weaker on the session already. we're just about one hour into it you can see across the different forces there is weakness in almost every single index this morning. ftse 100 down about 1/10 of a percentage point here again more brexit hopes more discussions over the weekend. will they? are they nearing a deal? all of these are questions investors are asking there's a little bit of optimism we'll get to that shortly. you can see the other majors, germany and france ftse mib, italian index, we're priced at the start of the eco
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ten meeting in brussels. this is the second time we need th that see how the narrative evolves there. what we do get is the impression that the leaders there pretty much doubling down on their bid to keep that budget at 2.4% for 2019 so no real progress there. moving on and let's take a look at where some of the leadership is this morning. up at the top telecoms are at 1% half a percentage point. again, some of the defensive sectors outperforming this morning. on the down side we've got industrials down .9% also financial services down .7% as well. what's not showing here are banks and banks have been front and center given we did have the european banking results on friday more on that later as well and a quick look at asian markets, i was looking at some of the weakness overnight.
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we've seen that really mostly transpire, the nikkei, the japanese index is down more than 1.5 percentage points. that is actually not the full truth because we did get some full results out of soft bank. the profits almost doubled from a year ago within the prodder market strong km flurry. shanghai, the chinese index is down .4% this is even though xi jinping has given a talk this morning. in that talk the president promises to reach tariffs and saying that the chinese markets are open he promised to cut down on intellectual property theft. the director general robert roberto acevedo is talking about
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the impasse. >> there are complaints about behaviors of different companies all the time in the wto the favorite sport is to point the finger at somebody else and saying, you're not complying. china, the world's largest trader, it's not surprising would have some finger pointing too. of course, i think the essence is to engage, be as fair as possible, engaging in consultations, conversations and have a frank and honest conversation about, you know, china's own practices like everybody else does in the wto that's the healthy thing to do. >> how do you get both china and the u.s. to the negotiating table to have those conversations because it looks as though both sides are digging in their heels. >> it takes a while. trade negotiations and these kind of tensions, they are easy to raise but they are very tough to scale back.
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there's a lot of politics involved in all of this. i think the way forward is to find different channels. those channels will pop out in different ways clearly bilateral is the way forward. >> there are other ways of having conversations regionally or in the case of the wto, a more robust format because that allows for different perspectives in the conversation if it's strictly bilateral it's often a win-lose situation i win, you lose, this is good for you, this is bad for me. when you have a more open conversation with more countries involved you tend to have a more productive and more cooperative conversation but it's also difficult. >> i think president trump would argue the opposite because he's been arguing that the wto and other multi-lateral organizations don't seem to be
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equipped or effective enough in trying to deal with a country that is seen as reaching the spirit of the global trading system so how do you do that? how do you make sure that everybody's abiding by the laws? >> like i said, you cannot exclude any channel so bilaterals, yes, absolutely. it's important bilaterals are usually good if you're trying to trade market access on a trade deal bilateral is easier, for sure, and more effective and quicker. if you are dealing with the kind of tensions we have now, it's tough to do it on a bilateral format because there are more countries involved. >> wto director general there speaking with our colleague about china and said multi-laltism. moving on to banking, more brazilians, that is the verdict calling the ecb's latest stress test all 48 of europe's biggest bank
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passed the ratio of 5.5% on the reverse stress scenario, but british banks, barclays and lloyds scored 6.73% and 6.8% respectively italian lender banco ppm is another one. unicredit scored 9.34. let's bring in the lead analyst of italian bank ratings. good morning to you, sir. >> good morning. >> i have to say i don't think i'm the only person that's surprised in the european bank stress test. i think most of the scrutiny was on the italian banks but what we
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got was lloyds and barclays. >> yes good morning, everybody. well, in general we are still in the process of reviewing all the different data information that we gathered from friday night after the publication of the stress test results. all in all i would say that results were pretty much in line with expectation and the main conclusion that we can garner from these exercises that banks are more resilient to withstand adverse scenarios. improving capital is definitely paying off when looking at the performance by individual country, it's true that we have seen some weaknesses in the u.k. for the british lenders, and this is probably true for the macro economic assumption. probably for the u.k. the assumptions were a little bit tougher than the european average. indeed, if you look at the cumulative deduction and then some gdp and falling real estate
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prices, those assumptions were higher than the european average. so, therefore, you know, credit losses and from the corporate, sme and retail were the key contributor to the british lenders. >> let me ask you about the scenarios that they're testing for. the macro scenarios are a lot worse than 2016. they're doing more than an 8% shot to the economy. crucially the sovereign spread widening test is not as adverse as it was back in 2016 that seems a little bit counter intuitive especially given the scrutiny on italy, italian banks and on the periphery spread widening we've had in the last couple of months >> this is a valid point so we can definitely say that perhaps the sovereign spreads were -- the assumption of the sovereign spreads were softer given, you know, the performance that we
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have seen especially with regards to italy it's true that the sovereign spreads were significantly below the level that some countries have experienced in 2011 and 2012, but it's also important to say that european structure has completely changed and today we have some instrument that talks about financial stability that we didn't have at that time. >> do you think out of today's results we're going to see -- are there any implications for what we saw in 2012. is it going to have any implications for a couple of these banks do you think >> yes, that's a possibility we have to see because the results of the stress test and the adverse scenario will be used by
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the supervisor to define the true guidance in the next requirements for 2019. so what we can say is that the higher is the drop rate in the adverse scenario and the higher is the likelihood of tougher supervisory expectations so for certain banks, the regulator might ask additional action in terms of corporate governance, risk >> sir, given you are the lead analyst on italian banks, i can't let you go without asking you about how you're thinking about the italian banks here given all the political noise in the back drop and given that yields are so much higher than they were a couple of months ago before this government was formed. >> yes i would say all in all the italian banks are in line with expectation so clearly difficult to convert these results to work we have seen in 2016 for various reasons.
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clearly different methodology, different assumption as you say, in the version of 2016 we scored the lowest with a negative value which triggered a precautionary capitalization this year we didn't have that but we had banco bpm which is a result of the immersion. clearly whether i the eu bank in the adverse scenario was coming with credit risk responding to over 500 basis points. it's true that the italian bank in the adverse scenario, 2020, they scored below the european average, but if you look at the job rate, what was around 400 basis points is in line with the european average
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so if you look then at the individual performance of the banks, they reported the highest equity ratio in 2020 fully loaded debt risk scenario and the lowest score was reported by banco bpm. >> all right, sir. thank you very much for joining us today on the show lead analyst of italian banks and dbrs ratings. also coming up on the show fierce campaigning in the u.s. ahead of the crucial u.s. mid terms. we will have the latest when we return don't go anywhere.
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welcome back to "street signs. with just a day to go until the u.s. mid term elections the democrats hold a 7 point lead that is down from a 9 percentage points lead from last month according to the latest nbc news wall street journal poll president trump went to georgia for the finalpart of his campaign while former president barack obama told supporters in
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indiana the only check on the behavior of republicans is this week's vote. nbc's kelly o'donnell has more. >> reporter: a megawatt match-up made by these unpredictable mid terms. today two presidents on the trail, 45 -- >> this is like being at a georgia football. >> reporter: and 44 back in action. >> i've been doing a little campaigning, but i'm a little out of shape. >> reporter: president trump putting some distance between himself and the fate of house republicans as he left the white house. >> the difference is i can't campaign for all of those house members, there's so many of them. >> reporter: but claiming he has been an asset to republican senate races. >> i think i've made a difference of five or six or seven. that's a big difference. >> reporter: the former president in gary, indiana, today a state he carried once in 2008 and where trump won in '16. barack obama trying to keep a senate seat blue by helping
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incumbent democrat joe donald. >> when you vote you can be a check on bad behavior. when you vote, you can choose hope over fear >> reporter: democrats, many both confident and concerned, that voters who have appeared motivated for months will follow through with the polls. >> everybody is encouraging us to get out and vote. >> reporter: president trump making stops in georgia and tennessee today scrapping to make sure republican held seats stay renchtsd so if you want more caravans and more crime, vote democrat. it's simple. >> women are the most sought after mid term voters. >> for me it's security, jobs, economy. >> there is a lot to unpack here i'm happy to say phillip bobbin from columbia law school joins us take a step back this mid term election is a
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referendum of president trump. what do you make of former president obama being so actively involved in the last couple of weeks. >> i'm glad he's doing it. he's presents quite a vivid contrast in style and the public wants to see that contrast >> all right so if we take the polls for granted, and obviously it goes with a pinch of salt because they have been very wrong in the past, everything is pointing to the democrats retaining the house and republicans keeping the senate what do you think that means for the second half of president trump's term if that was the composition of the congress going forward? >> well, if the democrats take the house and the six or seven points up in the national poll doesn't really assure that they will because, as you know, this is a jurisdiction by constituency, i would think the first order of business would be
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to protect things and the second order of business would be to issue subpoenas or testimony before the house about the president's campaign and about his behavior since being inaugurated. a lot of energy is going to go into that arena entirely apart from legislation. >> and dare i bring up the i word, you've written a book on this, impeachment. there's nothing that has come out of the mueller investigation so far there's no evidence yet that the president can be indicted. if damning evidence were to emerge and in a situation where the house is democrat, the senate is republican, what does that mean for these proceedings? you still need to have the senate on board? >> that's right. impeachment is another word for indictment the house can do that with a bare majority and i wouldn't be at all surprised if something
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like that happened you're quite right in saying though that the mueller investigation has been remarkably free of leaks we don't know what's in that report and it may be -- >> maybe nothing is in the report. >> the real issue is whether or not after the mid terms if mueller is dismissed or if he sends a report to the attorney general who refuses to release it, whether or not the congress and the judiciary committee can pry even a summary of that report loose if the president asserts executive privilege, it will go to the courts. it's not clear we will ever see what's in the mueller report if you don't ever see what's in the mueller report, then there will be no conviction, it goes without saying. >> look, taking a step back, i'm not american myself, but watching it from afar, you get the sense that the country is extremely polarized. there's literally no common
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room, no dialogue going on between the democrats and republicans because they're sitting at completely opposite ends of the spectrum is there any room for there being compromise in the second half of the term >> i'm not sure compromise is true of the parties. the republican party will be a trump party for the foreseeable future and solidifying trump's base whether or not they can cooperate in the congress i think is going to be a very difficult question, but the country itself, my sense of it, is really not that polarized there's a large center group that's just tired, just exhausted by this -- all this quarrelling. >> you say that, but then 90% of the trump base don't want to watch mainstream media
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the same thing goes for the liberal media. they don't want to watch the same media that represents the trump philosophy on life there's a lot of distrust out there. you hear it, the rhetoric is extremely angry. you have several incidents over the last couple of weeks with the pipe bombs, mass shootings the country seems to be in a very dire strait at this point in time. this is an opportunity and the economists are meeting with us this weekend, saying this is an opportunity for this to change and for that to actually be healed do you see any optimism coming out of these elections that this actually may happen and maybe to something more positive for the country? >> it might have happened if this was what was known as a wave election. i think what you'll see instead, just as you said, dpemocrats may be picking up one or two seats and it continueswith gridlock on capitol hill. i wouldn't extrapolate from what
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happens in washington to the larger public. my sense of it is that a great mass of people, even if as you say we watch the things that reinforce our own prejudices and opinions, i think the great mass of our people are dispirited in the government but not dispirited in the country and the direction. >> phillip, i'm going to have to leave it there professor from columbia law school i also want to talk a little bit about iran today as well because oil prices are trading lower as u.s. imposed sanctions on iran officially kick in washington has granted wavers to four importers meanwhile, thousands of iranians march over the weekend demonstrators were marking the anniversary of the seizure of the 1979 islamic revolution.
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they said they were opposed around the globe president rouhani was defiant saying iran will continue to sell oil and break the sanctions. also coming up on the show, the red summit kicks off find out what to watch out for this year when we come back. (vo) 'twas the night before christmas and all through the house not a creature was stirring, but everywhere else... there are stores open late for shopping and fun as people seek gifts or even give some. not necessarily wrapped with paper and bows, but gifts of kind deeds, hard work and cold toes. there's magic in the air, on this day, at this time. the world's very much alive at 11:59.
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welcome to "street signs." i'm johanna versace and these are your headlines european equities struggle to make gains after a weak asian session and hopes of a trade truce fades, but the director general of the wto tells cnbc china's approach to negotiations is encouraging. >> i think it was very much welcome by the international community. i certainly saw it as a very positive speech in the context that we're living today. british banks are the surprise under performers in the europe wide stress test, by the
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italian lenders feel the pressure as banco bpm trade in the red despite passing health checks the republicans and democrats hold a final flurry of campaign rallies as polls suggest turnouts will outstrip previous mid term elections. >> this is one of the most important elections of our lifetime this is a very important election i wouldn't say it's as important as '16 but it's right up there it's right up there. it really is and iran vows to defy u.s. sanctions by continuing to sell its oil calling the measures psychological war as washington wavers to eight major crude importers. all right. we're just getting some data out
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of the u.k. in the services pmi numbers, and the numbers are not good coming in at the lowest since march. that is the lowest level in seven months all sector pmi came in at 52.2 versus september's reading of 53.9 and they've also cited business expectations that are coming in at 63.1 versus september 66.4 that is a three point drop the lowest since july 2016 so, again, as ever this is something that was discussed obviously at the bank of england meeting last week on a forward looking basis. a lot of these companies and businesses are getting nervous about the outlook and we're beginning to see that in the numbers. a bit of a disappointment there both as a spot number and also forward looking number bit of reaction. you can see briefly we traded through 130 early on in the session. now we're just a tad below that, 129.90ish. it is all about the politics though at the office of british prime
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minister has dismissed reports of a brexit break through on the issue of the northern irish border the sunday times reported that the government had negotiated a deal that would see an all u.k. customs union avoiding the need for a hard border. may's office called the report speculation. separately the u.k.'s financial services minister john glenn has said in the last hour that he is, quote, extremely confident on reaching a deal on financial services imminently. meanwhile, brexit secretary has reported to the british prime minister has warned against withdrawing from any irish back stop deal in three months the plan is an attempt to provide insurance that the u.k. would not be caught indefinitely in the customs union the reaction in sterling has been a little better than over
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the last couple of sessions. it's very close to the 1.30 mark mrs. may will be meeting with her cabinet tomorrow and perhaps that will set the stage for a november summit in a couple of week's time. that is the theme for sterling you can see a bit of weakness. just a smidge weaker, about a tenth of a percentage point, not even dollar yen, that currency fairly unchanged. moderate moves in the currency market switching to european forces and here we're seeing a day of weakness that has actually turned around in the last half an hour or so. this after very heavy asian session. we had the indices trading very deeply in the red. footsie 100 back up about 6 points higher. the german and french indices are higher ftse mib continues to be the under performer today down 1/3 of a percentage point ahead of the eco fin meeting in brussels.
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let's talk about u.s. markets as well we did have another weak close to the session yesterday with nasdaq underperforming pushed down by some losses in apple and you can see that today the mood again is a little bit soft as we kick off the trading week. dow is seen opening up 62 points lower. nasdaq about seven points lower as well. it was also a big week for tech and also big day for tech today as we got results from softbank. they have reported on the back of vision fund investments quite a big day for softbank results. >> reporter: yes, indeed its operating profits marked a record high for the first six months softbank's operating profits rose 60% to $12.5 billion. less than half of that profit
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comes from the core business of providing telecommunications services in japan and the rest is due to softbank's $100 million investment fund invested by saudi arabia. the fund's ties to saudi arabia has become unease since the murder of jamal khashoggi. it was addressed today saying he had spoken with the crown prince and they said it will not be released until this has been resolved there have been no rejections so far and that the fund had made a $1.1 billion invest nmt view, a california maker of window glass. so that's all from the anything
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kay. back to you. >> thank you, makiko for bringing us the latest very strong results out of softbank. moving onto the confident italian government he said his spending plan is a recipe, he didn't say a recipe for what though. oh, for the rest of europe in an interview with the financial times he said next year's report will show that it's a policy. it rejected rome's expansion naryury budget they were optimistic saying thi will resolve all issues. let's see about that in france, marie lapan's party has overtaken the opinion polls. the party known as national france gained 20% of voting
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attentions while the president's centrist party only secured 19%. also the people of the new caledonia were in a french territory. they voted 56% in favor of remaining under french control in what french president described as a vote of confidence in the french republic and moving on nicely to our sports segment unbeaten boxer floyd mayweather is making a shock return to fighting after signing a deal to fight with a mixed martial arts fighter on new year's eve. didn't he retire and isn't the person he's going
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to fight a kick boxer. >> yes everything in boxing and floyd mayweather come with a caveat. there is always one more pay day. if you're floyd mayweather, that is a pay day he signed a deal with the mma. it's similar to the ufcbut ver much in its infancy in japan now employed mayweather who has fought all 50 of his fights in the u.s., he's going on the road he's going to japan. what's brought into this you can speculate it is probably money but -- >> no. >> -- no telling exactly what it is he's held a news conference in tokyo where he formally announced the fight speaking quite ee vase civilly i would
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say about questions directly relating to what's motivated him to do this he says it's for fight reasons he says it's to bring something new. for a man who's done so much in the sport and interestingly, we can hear from him now. i just want to bring him in because the rules of this fight aren't set but when they are set may weather is pretty confident he's going to be the one that ends up victorious. >> people on my team, i'm pretty sure we want to be on the same page i mean, you know, one thing we have to do, we have to -- we have to have rules there's rules and reg gu lalgss to everything we do in life so i'm pretty sure once i speak with the guys from my team we all going to get on the same page so we both can go out there and do what we have to do. >> jomana, you're quite right he said he was retired. speculation has been rife that he was going to have a mixed
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martial arts fight >> there was a whole controversy over that. >> they've both beaten connor mcgregor and now they think they should fight each other. maybe this is an interduktd try fight. >> okay. so he record tedly earned $270 million for one fight. this is a stupendous amount of money. >> he's fighting he's a promoter as well. he's very good at self-promotion when it comes to his own fights. he's obviously stepped into the promoting side of things for others for that one fight, yes, you have the lion's share of the money on that. connor mcgregor made $100 million on that fight. it could be a fight between floyd mayweather, if he comes through this unscathed, he is a
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kick box jerks the rules haven't been stipulated. if he's kick boxing, may weather might be in a career of boxing a lot more money. >> that's right. >> thank you for bringing us the latest. if you as viewers have any views on what we just discussed, also on something which we haven't discussed which is very important to me, the spice girls reunion, you can get more details on that later, tweet us @"street signs"cnbc we'll preview the upcoming week in european and earnings as they move away from cyclical stocks more after the break rebekkah: opioids has taken everything and everyone i've ever loved away from me. everything. i blew my ankle out and i got prescribed pain pills by my doctor.
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welcome back to "street signs. some company news for you. gam has reported to slowchroders gam turned down the offer.
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schroders said we don't comment on rumor or speculation. and in banking news deutsch bank's asset manager dws has offered to buy 15% steak in neil technologies they said they will have digital asset management services in the middle east and africa. semens health care has reported q4 revenue which is higher despite currency headwinds. they're expected to grow 4 and 5%. earnings season is expected to roll on this week amid fragile investor sentiment you've been taking a look at how the european earnings season has
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been shaping up and what to watch out for this week. >> indeed. so in terms of the earnings season, it has actually been a slightly more positive season than the narrative we've heard around the markets suggest a decent number of european companies beating on earnings and revenue expectations in terms of the absolute level we're seeing on earnings and revenues, still pretty healthy obviously investor sentiment remains very fragile that has manifested itself in a pull back in european stocks in october. the stocks 600 down including a nearly 2% rally. >> shocktober. >> absolutely. what we saw in investor trend was a rotation out of cyclical stocks into defensives that corresponds to negative earnings revisions for those cyclical stocks. that is in terms of where we go from here, that is the key focus. for the first time since september 2017 we saw negative earnings revisions for europe that means 3% lower
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cyclicals have been hit the worst. one sector in particular worth highlighting is autos. autos suffered steep cuts. sentiment wise autos are probably the most hated sector in europe and this earnings season has vindicated some of those bears who were nervous around downgrades coming through. key question now is is the broader cyclical sector oversold are there more downgrades coming >> certainly that is the picture for european equities charles cara joins us. good morning, charles. >> good morning. >> i was reading some very interesting statistics that you put out in your notes. right now we know that 75% of the s&p has reported the ratio beats to misses is 3.5 to 1 so far the performance has been good there's been a lot of beats and yet post earnings announcement, the performance has been
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terrible the average reaction is to trade down minus 1.8%. what is going on >> what we see here is a problem about liquidity. so while companies are reporting often better results, there is concerns about the guidance and with issues about liquidity, we're seeing a rotation into safer stocks we would focus more on low volatility, low beater stocks and we are seeing those outperforming the high risk stocks. >> what are the main concerns being cited in some of the earnings polls what are companies most worried about now on a forward basis >> one is cost so we're seeing signs that there is labor inflation coming through, wage inflation. that is hitting the costs. secondly, with bond yields rising there's a concern about interest charges at the moment we're still on a sugar high from the tax reform
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leading to a lot of this earnings beat but when we look at ebita type measures, we can see those are tracking downward rather than upward at the moment there's a concern that we've hit peak earnings growth. >> i want to pick up on your point about hitting peak earnings growth because this argument has been central to earnings for the last several quarters >> yes. >> it feels like every quarter people try to call the top and we have another strong quarter so are the indications actually much worse this time around where people feel that much more strongly that we have, indeed, hit the peak >> i think you can look at it mathematically because you can think of tax reform as a one off 20%, 10% increase in earnings. it's very hard for companies to grow that. we are seeing 2019 earnings forecast are lower or growth rates are lower than 2018. >> to your point, what i thought
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was interesting as well in your notes, i read your notes very extensively, but i thought you said sales growth is only 1% higher from a year ago whereas the bottom line you have eps numbers 13% higher. >> yeah. >> what's happening is because of the tax cuts the bottom line has obviously exhibited a big growth but actually the top line which is just normal sales in reflection of the economy or whatever hasn't been growing as fast. >> exactly. >> which on a forward looking basis tells you once you have the tax cut effects, the numbers won't be so positive. >> exactly you're hitting the nail on the head we don't see tax reform as having changed the underlying growth rate of the economy one sign of this is the fact that investment rates have not accelerated. >> and in terms of rotations, something julianna was talking about in europe, are you seeing that happening as far as european investors are zmernd we
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talk about tech stocks last week tells me it's a heavily positioned sector. >> yes yes. the growth value trade where tech is effectively growth, value is effectively financials, that has seen a bit of a rotation back towards the value part of the market but when we look at our factors on a quant way, you see it's on a low volatility the higher quality stocks are outperforming. we're seeing a rotation into there less than away from tech it's more into high quality and low beater. >> i want to touch on some of the markets rally very strongly. the fact that we saw such a massive move there suggests that the market is not pricing in a deal should we get a deal between the
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u.s. and china, does that dramatically change the earnings picture? >> yes, that does help the earnings picture some of these stocks have been a bit oversold, but what we see is that withdrawal of liquidity, which is coming through, higher bond yield, higher interest rates from the fed, that is going to act more as an underlying driver of the stock market than the short-term hit from better trade. >> let's see about that. charles, thanks for coming on the show and the berkshire hathaway company spent $928 million on share buy backs in the last quarter. just as an aside to put that into context, apple has been spending more than $20 billion a quarter. there you have it for context. that is after warren buffet's firm reported a doubling in third quarter operating profit but said it was struggling to find suitable value investments.
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meanwhile, uber has promised to change the self-driving car program in the first safety reports since a fatal crash. they've promised more extensive training and it has changed the way software response to people and objects around cars. elon musk has said tesla's new pickup truck will be, quote, like something out of "blade runner." last year musk announced a truck. in an interview musk added the truck is the product he has called personally most fired up about. now karen joins us with more live from the web summit karen, what do you think are going to be some of the major themes that will be coming up this year at the conference? we've talked about self-driving cars what else is on the menu >> reporter: jomana, there's a lot coming out today
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you can see a bit of rehearsal going on at center stage events like this quite key for investors because keep in mind, no one really saw the impact of privacy concerns and what that would mean for increased spending or research and developmental gore rhythms not to mention regulation. investors were very late to the party. could have a huge impact to some of the technology companies. it's quite important to be up close and important for the next big event for investors. taxes will be one of those issues for 2019. keep in mind all of this year we saw it sown up and taxing some of the members at the source of origin this is owning it. member states still have to debate the rules, but in the meantime because this is such a long-term reform, european commission wants to go after an interim digital attacks.
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there's a big issue with navigating u. schblt president donald trump german industry is concerned that if there are measures trying to equal a playing field on tax revenues based in the states, the u.s. president might react with retaliatory tariffs which is why digital tariffs have stalled in 2018 they are coming. there was an issue that perhaps they were going to go after. they are coming in 2019 for a number of jurisdictions. that's a big issue the other thing i want to flag out is whether they can tag monopolies stick behavior. they talk about facebook and google and that's 3/4 of internet traffic you think of all of the data with oversight and how much is being sold to marketing and advertising companies to try to
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generate revenue there is an important conversation coming up with tim bern ners lee and he talks about how he wants to reinvent the web. a couple of big items that investors might want to pay attention to i see you'll be sticking to that we'll catch up with you tomorrow that is it for today's show. i'm jomana versace "worldwide exchange" is coming up next. we'll leave you with the markets and how things are doing there
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♪ call on me brother ♪ when you need a hand ♪ lean on me, when you're not strong ♪ ♪ and i'll be your friend ♪ ♪ i'll help you carry on ♪ ♪ lean on me ♪ mmm... ♪ lean on me... ♪ mmm... ♪ lean on me.
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i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome.
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it is 5:00 a.m. here in new york here is your top five at 5 asia falling again overnight iran's president says he will defy new u.s. sanctions and sell oil around the world amazon's hq2 the tech giant reportedly one step closer to aiming a second home warren buffet betting on himself. berkshire hathaway bought back its own stock. 24 hours and counting. we'll let you know how the balance of power could impact your money it is monday


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