tv Street Signs CNBC October 18, 2019 4:00am-5:00am EDT
welcome to "street signs." i'm joumanna bercetche these are your headlines >> reporter: boris takes the battle back home urging lawmakersto vote for hi deal in favor of an immediate brexit on october 31 he has one day to get his agreement through. a super saturday >> now is a moment for us as a country to come together and for
our parliament to get that done. >> reporter: european council tusk talks it up but they leave the door open forex tension. >> renault sends stocks plunging warning of tough market conditions china's fourth quarter gdp grows at a slower pace and war weighing on the second largest economy. our top story, we have a brexit deal. boris johnson has returned from brussels to fight another battle he needs to convince parliament
to reach agreement johnson has urged lawmakers to vote in favor of the deal in a special sitting on saturday to avoid another delay. let's take a look at how the market is reacting the ftse 100 as a whole is down around the flat line rbs around the top some of the names with domestic exposure are doing quite well. we are seeing a reversal of that let's switch and talk more starting with the banks. rbs starting up. barclay is up 2.1%
international exposed banks slightly negative. there you have it, domestic exposed banks outperforming today. there you go with the brexit demand for housing. you can see today taylor up 2.5% and barrett up as well so strong day for home builders. but we have all the brexit angels covered for you today we are live in westminster and brussels let's start with steve does the government have the numbers to push through the vote it doesn't seem like some of the former tory independents have what they need which could be a problem.
>> we've had correspondence on this a lot of people thought it was possible for boris johnson to get another deal he's got a major tick. can he achievethat full backing. given that the numbers could look very challenging. in brussels, he is lauding the fact that it is great for great britain, it takes away the backstop and gives the country as a whole a route forward one that the eu is keen to hear. let's hear from the prime
minister in brussels yesterday >> a very good case for the mps to express the democratic will of the people as we've pledged many times to do and to get brexit done. as i never tire of telling you and repeat, i don't think there is any case for delay. we should get it on and get it done by october 31 >> we've seen quite a few mps here today some saying, of course they are voting against it. this is not the route for them scotland did vote to remain in the eu no surprise to the three different parties including the labor party, then change uk and now liberal democrat and they are voting hard for a
referendum one of the 21 conservative rebels who no longer have the whip if boris johnson is to get anywhere near the 320 votes he needs, he'll need a great chunk of those conservative independents to follow suit and back him donald suit told us he wouldn't back it. >> i would vote for it if the prime minister was going to attach the referendum to it. that's been my consistent position what we are talking about now is so radicily difference than the 2016 discussion. it seems that this ought to be put back to the british people >> that is one vote boris
johnson doesn't have dominic gray saying he thinks there are several others of the 21 who will not be persuaded that could be absolutely crucial in this numbers game over the next 36 hours. dominic saying, yes, i would vote if there was a referendum by the option parties do not want to attach that amendment on to boris johnson's bill. also, i thought it was fascinating what he had to say about the week of turmoil ahead if indeed the prime minister doesn't get his deal through suggest that everyone who is interested take a look at the numbers from the spar tans on one side to the tors and the
members voting with corbin as well it's a mix >> really significant that one of them will not be voting for the deal he said he's got another four beside him let's talk about the european angel. leaders are watching and waiting. the commissioner juncker said there is no reason to delay. other leaders have left the door open to possible extension if lawmakers pass the deal. willem, pass us through the extension. if the bill doesn't pass, leaders will have to go to january but it is up to the eu
to decide the final date >> that's right. we don't know how they'll respond. they haven't been prepared to talk about any of that because they want to maintain pressure ahead of the votes tomorrow. what was interesting based on the statements with officials is quite how happy they were. they made some concessions because they feel like the uk made as many, if not more. the focus throughout this process has been the lively hoods of individuals who had been affected by brexit. >> protecting peace and stability on the island of ireland. the agreement protects the rights of 4.5 million citizens
3.5 million citizens living in the uk and in the european union. they'll continue to live their lives as before. we always put people first >> that is absolutely true if you go back, one of the first things they both agreed to resolve was the future fate that would be affected by both sides of this split. in terms of more recent developments, one of the main concerns has been implications whereby the eu leaves and all the consequences of a move like that that was something the eu council who steered a lot of these was very relieved about. >> the reality is that today we have a deal which is loallows uo
avoid the conflict there for, the european council invited the commission the parliament and the council to ensure that the agreement can enter on 1st of november, 2019 >> all the indications are from the european leaders and parliament and across the continent, there won't be a problem getting this done by the end of this month and there for everything hinges. >> certainly big questions ahead on the response. we are very much focused on the northern ireland's response. opposing the brexit deal and stating that the proposals are not beneficial and undermine the integrity of the union
their report was seen as crucial in getting the brexit deal through. juliana is in belfast. one is that they'll only get a chance to vote on this four years after the end of the transition deal. >> exactly that is the crux of the dup's option that's not it. they have gripes with how this will affect consumers in northern ireland and they will be subject to arrangements the rest of the uk will not. before we get into detail, let's listen to the irish prime minister and what he had to say. he's really emphasizing the difference between this deal and the backstop one thing is maintaining the importance of peace on the
island >> it is a unique solution and one that recognizes the unique geography. different from the backstop. that was never intended to be used it was only to be temporary and sort of an insurance policy. possibly could become permanent but only with the extent of representatives choosing this arrangement into the future. >> that's the view from the prime minister of ireland. let's listen now to the leader of the dup she details why they cannot support this deal. >> ke >> we'll continue to work with the government today, we do not believe it is in the interest of northern
ireland. the border for regulations and goods. we have different vat rules. all of that taken means we cannot support the stay. >> exactly as you said, the real sticking point is around the consent of this new deal the bottom line is not supporting this deal they don't plan to vote for it tomorrow according to the brexit spokesperson, they will try to encourage conservative lawmakers to do the same >> definitely disturbs the picture. let's get back out to steve in westminster. perhaps give us a little more analysis of what may or may not happen today >> that's right. looking at my open notes, going look at your numbers it is true, we are all just
looking at numbers do you think you know the right numbers for tomorrow >> i think it will be close. i don't think anyone thinks we'll get a landslide deal the keys are the dup, labor rebels and the tory rebels and i think they'll probably vote against this again like last time >> how many are those? they meet as a block that is important. >> right my assumption is even the tory rebels that had been kicked out of the party, if they voted against theresa may's deal, i have no reason to think they'll
vote i think the dnl uncertain remainor rebel for me is joe johnson. is he going to vote against? >> the prime minister's brother. >> indeed. we are skirting around the edges here the key metrics are, and do you get really big injuries in the labor rebels you need to get that number up >> i've seen an 1820 figure there. a lot of them are really tricky. maybe they'll keep their seat by going up corbyn has been weakened this week >> yes a number of labor seats have voted heavily in favor to leave.
if you are in a heavily leave voted c voted con. >> being attached to one of the amendments tomorrow. it will bea lot longer debate. why isn't it a shoe in that it isn't being attached to the withdraw bill. surely that's what the option would want >> if you are going to get second referendum, you need an election and policies led by the labors and s&p you need them to win the majority i think also because they've come back with a deal. this is not the no deal and hasn't been completely polarized
yet. it has been more likely. >> too obvious a question to ask you. let's say he doesn't get through tomorrow dominic said to me, wow, what a week we are going to have next week it is going to be a mall strom. >> on saturday, if it doesn't go through or if these amendments go through -- there is very specific wording to go through if that wording is not there if it is amended, then we are heading to an extension and boris johnson is legally required to send that letter thens it up to the european council. if they decide they want to allow that extension -- >> but not up to jean-claude
juncker. it is not up to him, is it >> nothing to do with him. that's one of the big wildcards. are the european council going to say is this the best deal on the table? they would be doing boris johnson a massive favor. that's quite an aggressive move. it is possible they could say we will grant you an extension. >> last cue, we have to go general election this side of christmas? >> i think the problem you've got with the election is that the poles are so against the option party right now however, i do think now you've got a deal and still with the parliamentary dead lock. saying no deal risk will be removed. no excuses they have left, they'll start to run out of
options. >> at least the sun is out richard miles political analyst. i'll hand it back to you in the studio >> turning to the managing director of yoeur-asia group did he assume he would be aible to sway them over somehow? >> i think he's hoping to turn the dup before saturday's vote i think he's decided to call their bluff. eu leaders have been clear they weren't going to negotiate the deal either they were going to walk away from the potential agreement and then sign on the line and then the pressure will
build. >> do you think there is still time to make that happen is there any chance he can flip them in the next 24 hours? >> i think it is likely the dup will vote. more broadly, momentum is on boris's side the get brexit done factor is to his advantage with the key banks they are trying to woe when we are looking at the numbers, it will probably be a narrow defeat. >> as we discussed back in the day. the question then is about the margin of defeat if we are talking about four to five people, how does that affect the outcome to say the
larger defeat and how does that affect what boris johnson does afterwards >> if he does not extend that, that will kick in, the government is mandated that is for three months and then goes on there is discussion about what to do about the extension. if we ask for three, do they say go away, take six? do they really want to be seen to be playing in our domestic politics what we ask for is what europe will grant that is an extension to 31st of january. >> what are the general steps is that likely that gets called before october 31? >> we are moving to general
election the process by which you get there is clear they are both leading in support of the polls that gamble has been in the liv dems at the polls. heading into the option, i think there are cold feet among labor mps. i think the leadership of both parties are keen but there is more concern you do move to an election but it is difficult to see how that comes about and moving in parliament >> that heat is coming from the conservative party >> managing director of the group. looking at the arrivals there at the second day of the summit angela merkel having a chat.
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>> shares of european automakers have fallen after cutting the sales for the year citing key conditions like turkey sales are likely to drop betwee 3% and 4%. they are searching for a new ceo. getting to the head of auto research great to have you with us. are you surprised at the revenue cut and margin cut
>> good morning. we are not that surprised by the revenue cut. we were surprised how deep the earnings is and because they are not generating the free cash flow which is the biggest worry heading into next year >> there are a lot of changes. last year, they said they are looking for replacement. one of the other bigger questions is what these type of earnings the set of negative items, what does that mean for the roughly 43% stake in nissan? >> renault has trouble in many areas, huge trouble with very strategic partner.
troubles with the core business and looking for the new ceo and all that comes with the times which would make life very, very difficult. >> what does it mean for the 43% stake that is valuable we've argued many times with those that had been too large if necessary. it would free up cash that the company needs and rebalance the relationship between the two companies. >> i want to ask you a question that has been hanging over the company. tariffs. the u.s. will make a decision whether or not they will impose tariffs. on a day like today, you see the stock down 2%. do you think autos are really
priced in if it does happen in november >> we have a few things on the macroside. we are probably a bit less worried. we are less worried hopefully on brexit which will be a big, big concern for the auto industry in particular and the section 232 on national security are sort of the last big ticket items on november 18, president trump will have to make the decision whether to impose tariffs on europeans or not if it would happen, it would be a big hit. for the germans, that is a big hit. >> i'll leave you there. thank you for taking time to chat >> also coming up, the slowest
growth rate in 30 years. we head out to find out what more pressure is on china's economy. cascade platinum. it's specially-designed with the soaking, scrubbing and rinsing built right in. cascade platinum's unique actionpacs dissolve quickly... ...to remove stuck-on food. . . for sparkling-clean dishes, the first time. choose the detergent that lets your dishwasher do the dishes! cascade platinum. the number one recommended brand in north america.
>> welcome to this special edition of "street signs." these are your headlines >> boris johnson brings the battle back home to westminster. urging uk lawmakers to back his brexit deal. he has one day to get it over the line >> now is the moment for us as a country to come together now is the moment for our parliament to come together and get this thing done. >> eu officials vow to make that deadline if they get the deal. tusk talks up the agreement but disagrees and leaves the door
open >> shares of renault falling >> ongoing trade war weigh on the second largest economy >> there are plenty of stories contending with the market today. china gdp hung over. very weak trend there. the big narrative today is that on the knock on effects after the deal being announced ftse 100, you can see has nose dived trading below that flat line we've been focused on how some of the banks and home builders there have been performing
hanging in around the flat line and when the u.s. around midnight will start to impose the goods. you want to keep an eye on that. the potential retaliatory tariffs too. >> cac there one one name down about 6% ftse mib also down >> renault down around 12% looking at foreign exchange, we had a roller coaster day yesterday. euro euro is slightly firmer. we head into that super saturday
session. sterling in general since september has been up about 10 points things have really turned around up around 7% the biggest gain since 1982 it has been a very strong couple of days for the pound. >> we've been talking about trade. the imf has called for an overhaul of the global trade session. looking at e commerce. managing director told cnbc she is hopeful for a trade agreement. >> the interest in agreement is motivated by a simple common objective. harmful for economies of both countries. more harmful to china.
more dependent on trade relations. we have then the calculation on what is the impact it is quite significant. by 2020, tariffs all announced would shrink gdp by 0.8% that is the equivalent of whole economy of switzerland so the motivation comes from the world economy is slowing down. >> china gdp is growing at the largest pace missing expectations due to weak factory production
>> the chinese economy is growing at its slowest pace in years. because of weak demand overseas and at home. december data showed a rebound but uncertainty continue to dampen prospects the bureau said china plan to front load government bonds for 2020 to this year and other measures to keep steady the fourth quarter and beyond. saying that a drad deal would help restore confidence stressing that beijing wants all ministries lifted and will fight hard for that. cnbc business news, beijing. >> the u.s. confirms they will
take effect today. 10% levee will be imposed on aircraft items like hiskey, cheese and wine will face tariff. the spanish economy minister said the u.s. is unfairly targeting spain and that the country targets the direction. >> we are looking at other markets. i was very happy to hear the message that china is looking at opening up in terms of service it is lose lose.
we are supportive. finding a better way to deal with each other we are willing to engage in that process. the threat doesn't seem to be a wise solution for me >> working to boost optimism needing that positive energy in the are past month >> speaking about the positive environment. it was warm and encouraging. the friendliest we've heard in a very long time what changed over the last
couple of weeks? >> i think there has been a change more motivated to try and get a deal over the line they recognize and acknowledge that the eu side is also exhausted. there is a sense that this has to stop. >> let's pick up on that the eu council may have to pick up another resolution soon they would formerly have to ask forex tension. it is up to the council to decide what that date would be what is their call cue luis
here everyone is waiting to see what happens on saturday. they will test the temperature assuming it is not contentious, they'll agree to extend. it is a bit complicated. that specifies 31st of january assuming they kick it long and offer six months. >> what about the prospect of the general election if we have a general election,
they would change over surely that would not be in development as well. >> the extension will not be forth coming if it is about discussion or another meaningful vote the expectation will be if the extension is granted that the uk will hold a general election at this stage, that will be more likely >> do you think no deal is taken off the table now? >> no. i don't. i think the outcome is unclear boris johnson may deliver a tory majority he may not that depends on the competition. if you end up with a tory minority government. the no deal risk would again
resurface. the number has come down it is certainly a risk on the other side of the election >> interesting that seems to be pricing in the optimism there also coming up on the show, morgan stanley beating profit but remain caution for the out look on the banking giant. details after the break. my gums are irritated.
talking about the broad based performance here with some of the stronger banks and the weaker ones. >> overall for the banks i think going into last night 14 out of 18 would beat earnings estimates driven by a few things the consumer continues to hang in there in the u.s. that is good credit card and auto loans business you look at the top four, they've all closed branches. talking about the banking side, fixed trading was good for the
whole group. equity overall was slower by fixed was good >> we spent a good time of the year you look at the growth and result out of key investment banks. everything points to a healthy economy. >> commercial loans, business loans not that strong. what is driving it is the consumer wage growth, which has been running 2 to 3% in the u.s if that happens, banks are right. if that happens, the yield curve has achieved a pretty flat shape. net income for the group is falling for the quarter.
>> let's go back to investment banking. goldman sach is up on the quarter. was it just bad luck on goldman's side >> i think it is market consistent that has soured. really about the calendar as opposed to the trend that wasn't strong for the group but muted if you look at the performers. >> what does that tell you they are putting in the numbers
there is pressure on that margin banks outperform when you look at the yield curve they didn't go do great versus the overall market. >> what do you need to see >> right now the market is forecasted that they need to cut in november and october in the u.s. the retail sales it was disappointing. they were down 0.3%. they expected them to be up. there is not a lot of inflation in the u.s there is room for the feds to cut rates. i think you'd need to see the
yield curve stephen a little bit. this week, the curve has stephened. that is a big change >> randy we'll leave it there >> chief investment strategist >> a reminder of what is in the newly negotiated brexit deal the backstop will be moved that means the uk will be able to strike trade deals. goods destined for the eu will be checked it is effectively the customs border in the irish sea. they will be able to vote on this every four years. steve, what is the latest? >> reporter: it has all become a numbers game everything you've read points to
the fact that they cannot back boris johnson in his absolutely crucial vote tomorrow with their 10 mps the numbers game is incredibly tight. the finish line is 320 seats there are some feelings that they could well fall agonizingly short to some department where theresa may failed one key player is dominic grief, one of the 21 mps who lost the whip i spoke to him about whether he is going to be joined by others among that 21 who would vote against that and potentially and get over the line. >> there will be some. i think i can be pretty certain that the numbers are absolutely
concern, there are at least four of us. beyond that, you may well get more these are very difficult individual decisions for people to make if i were not to oppose this there will not be an opportunity tomorrow it is not the right moment to do it under no circumstances, the correct course of action is to vote against this deal >> could be a key intervention that will make it tough for the prime minister going through it quickly if the prime minister gets it through, that will happen on october 31st with the deal and also that it could be an incredible week. everything on the table from the vote to talking on the general election to all kinds of issues and calls.
possibly even a no-deal as well. >> so joumanna, as we get to the sitting in westminster tomorrow. >> will be a big one another factor is the potential extension that could occur another question is how long that would be if they go for it. a quick look at u.s. futures all of the three indices down with the majors trading on the back foot. that is it for our special brexit show. i'm joumanna bercetche "worldwide exchange" is coming up next.
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it is 5:00 a.m. at cnbc. we are hitting the brakes. china's economy shifting to low gear souring sentiment, why the ceo of one of the largest investment banks says he's growing increasingly concerned the clock is ticking uk prime minister on a mission to sell his deal to parliament a possible conflict of
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