Market for the uk. Ab inbev plunge as the Worlds Largest brewer misses Third Quarter estimates and wonders continue for the rest of 2019 kering shares surge after a slow down from the unrest in hong kong. Uk Prime MinisterBoris Johnson says hell allow more time for mps to discuss his brexit deal. We are being very, very reasonable we are saying if you genuinely want more time, you can have it. Here it is but the continue for that is that we all agree to go for a general election on december 12. A very warm welcome to street signs and happy friday. Lets kick off the show with some fresh german data we got those fresh october pmi numbers. The efos survey showed german business moral was unchanged the index came in the 97. 8 versus a forecast of 98 flat the Business Climate index came in at 94. 6, which was a touch above the expectation of 94. 5. Weve seen a little revision to the september numbers. The index was revised. The expectation for the index revised to 90. 9. The message is that the economy is stabilizing so very interesting that the numbers are suggesting a bit of stablization that was interesting given when we saw yesterday lets bring in a little more on this survey and the latest numbers. Thank you for joining us it looks as though some signs of stablization have come through have we hit the bottom in germany. Good morning. We do see a stablization we are finally seeing an improvement in manufacturing which is a key sector for the economy. What we dont know is whether this is a turnaround it is too early for that we do see a stablization this is a good sign. This is consistent the growth rate will be Something Like 1 . To achieve that, well receive that stablization. Yesterday, we got the pmi flat numbers which are considered forward looking how do you reconcile that data with what you are seeing in the search results today we see different results. The index is based on 10,000 answers. It is much broader the assessment from the Current Situation continues to be falling even if it is not falling as quickly as before what we see is indicators with different signals here it is solid. It is the second month now we are seeing stablization. It is true that some companies have announced reductions in employment in industry, employment is shrinking but the Services Sector in construction, the picture is very different. Sir, digging deeper, you have a traffic light indicator that talks about the possibility. What is that showing right now the probability of recession is declining some what we are still in the red but it is improving the possibility of expansion is still very low it is at about 30 still improved and consistent with stablization and not yet turn around. So it looks like there has been some stablization and positive signs would you say we are edging towards a situation whereby your forecast may be at the risk of an upgrade in the future it would have to continue strongly i think we are currently in line with the forecast. To get a positive growth rate in the Fourth Quarter in germany and next year, we do need to see a stablization here if the ifo index continued to fall. I dont think we are moving to an upgrade thats too early what do you think this means as the possibility the pain threshold hasnt been high enough to trigger a change in attitude. It sounds like this data works against that work on that basis. We shouldnt forget there is fiscal expansion the government has spent significantly more we do see expansion in germany we dont need and dont know the indication of a massive stimulus this is not justified by what we see. It seems that this massive stimulus, bond buying, further cutting Interest Rates is a bit like using a sledgehammer to crack a nut here thank you for those details lets talk about some corporate earnings barclays shares are hitting a Third Quarter high after posting a 67 rise in earnings the british bank posted a 1. 4 billion charge and a warning that beating the profit targets will be tough. The ceo outlined the concerns facing the bank. The tax up some 16 a return on tangible equity or capital return this is six out of seven quarters where our profit level is just over 9 . A good print at 13. 4 . It is a good quarter we faced some head wins in the uk and our consumer and Small Business bank. It held up reasonable well had a strong year over year performance in our Investment Bank our corporate and Investment Bank was up some 18 that was strong as well. I just want to dwell on the thick income that has been an area of concern as investors have looked at the space. Up 19 looks very respectable. Could you take a little about what that tells us about the underlying market behavior and investor behavior over the Third Quarter and whether that represents some turning point as we look towards year end and early 2020 i think the Third Quarter for the markets business was overall reasonable many had very low volatility overall on a dollar basis, the u. S. Investment banks were up roughly 6 as were we. We stayed in line with the u. S. Banks. We did particularly well in the fixed income and the credit space. It was a good quarter. We do look forward to a little more volatility in the markets down the road. Ive been drawn to this very robust return on tangible equity from barclays as well. Can i assume from this that brexit is a little bit of a red herring if you are turning in 17 to 19 from your uk business for sure, it is still a very profitable business for us we have a strong uk credit card business impairments have been reasonably manageable we were able to slightly improve our net Income Margin and increase our balances in our mortgage portfolio there are some head wins the profitability is quite acceptable to recognize even with brexit, we are in a benign market for the uk we have a high exposure and need to keep our eye on it. We have beenquite prudent in our unsecure lending in other corporate news, ab inbev has cut a full year guidance saying it will face additional head wents. It comes as they post a Third Quarter profit that missed expectations due to decline of beer shipments to china. Unrest in hong kong has taken a toll on retail sales two luxury lines have absorbed the hit. Gucci which is kerings crown picked up property italian jacket maker moncler overcame a 40 sales decline in hong kong. Wpp has overcome a sales point thanks to new contracts. It expects sales and operating margins to fall siting twists and turns ahead. The french rival publicity cut its target worried about falling demand from u. S. Clients and ubisoft slashed target. The french game maker announced its operating income, a far cry from the forecast of 480 million euros. The company known for assassins creed franchise. That stock is down 22 today a major share price reaction. Well take a short break coming up, it is all about monetary policy. Mario draghi calls for fiscal b etg us as he holds his final ecmeinas president do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. What are you doing back there, junior . Since were obviously lost, im rescheduling my Xfinity Customer Service appointment. Ah, relax. I got this. Which gps are you using anyway . A Little Something called instinct. Been using it for years. Yeah, thats what im afraid of. He knows exactly where were going. My whole body is a compass. Oh boy. The my account app makes todays Xfinity Customer Service simple, easy, awesome. Not my thing. Welcome back to street signs. Ftse 100 down about a quarter basis points all eyes on that, the Political Developments there it certainly stalled some of the rebound we had well talk about that in a short while. In dax, down about a tenth of percentage point today is also very heavy earnings day retail is up at the top. Auto is leading some gains this morning. At the bottom, food and beverage is down. Abi bef ab inbev is down and ubisoft is down. A day of earnings rather than the macronarratives that have been playing out all eyes on that as well the Ecbs Mario Draghi used his final press conference as president to call on eurozone countries to boost spending. Draghi said looser Purse Strings will help accommodate the stance regarding fiscal policies, the stance is currently providing support to the Economic Community in view of the weakening economic out look and prominence of down side risk, governance should act in an effective and timely manner. Draghi also used the ecbs use of negative Interest Rates the overall assessment is very positive it is a very positive experience negative rates have stimulated the economy. All in all, we are exactly in the direction we wanted them to be lets bring in head of rates and Credit Research at commerce. Thank you for joining us this morning, we got some fresh numbers out of germany, actually showed some stablization weve seen strong reaction in the euro this comes after yesterdays ecb meeting where mario draghi defended the use of the rates. What do you make of this data out of germany does this give you signs of hope or optimism around the projectry of the eurozone . We are still at very low levels close to the lowest levels in nine years it is a welcome stablization but the broader picture, especially the german manufacturing already being in quite a deep recession hasnt changed that pressure also to provide more accommodation besides the countrys fiscal space will stay high even though no changes are expected short term but next year, this will be coming back to the markets we know that quantitative easing will commence do you think the bond markets are fully priced for that or could we see some risk that could start and little more detail is released on how they will be buying and spreading those bond purchases it will be interesting next week when the measures will be rolled out from wednesday, from settlement, we should start to see the ecb in the secondary market. Perhaps a bit further in primary. That will be interesting given the very low run rate that the ecb has, we dont expect large movement especially in the Public Sector program. More implications could be seen in the private Corporate Bond program where the supply, demand will be different. The gross volume will be quite significant. Were you surprised the price was not pricing in any further rate cut also surprising on the back of this tiering mechanism which gives them the cover to cut Interest Rates more if they had to why are they taking a different read from it that is right that is the different thing next week the tiering will go live next wednesday. In terms of what we see like repo and money market, the bigger story is whether the tiering does work. This would mean the rate cut expectation could come back to a larger degree. That could signal that could cut rates further. We are faced with a risk sentiment. If you look at the hard brexit risk and trade impact out of germany. This is bad and why they are reducing rate cut speculation. The other factor is the deep rift in the governing counsel with that already being very vocal. She will be keen not to deepen that rift and sounds more compromising and not as dovish and ready to roll out new rates because of this option a lot of the push back to negative rates and Policies Center around what this is meant for profitability for banks. Weve seen a lot of cost cutting efforts. Do they really have a lot to show for it . Margins do remain under pressure this is not just related to the negative rates policy and also the tiering will make a big difference when you look at the markets, theyve been stable at low levels for quite some time the bigger impact on Bank Balance Sheets is not just the negative rates, the general low Interest Rate environment which compresses the margins they have a lot of homework to do in terms of cost cutting and more consultation in the sector to turn things around. Thank you for weighing in head of rates and Credit ResearchCommerce Bank meanwhile, in the uk, Boris Johnson pushes for an election on december 12 as the eu 27 ambassado ambassadors meet this morning. Never a dull moment. Lets talk about the westminster angel, willem. What are the steps for us to get to another election. They would need twothirds support in the election on the 12th thats right. Hes saying, look, you want more time ill give you time in return, on monday, i need you to support it. Without support, he cant get to that majority. He doesnt expect anything other than the extension he would prefer a shorter one. He seems to be the lone hold out left who is pushing for that opportunity. He has said he would stable that option on monday not all that unexpected. He reissued that message take no deal off the table and i support an election. This country needs one to deal with all the social injustice issues but no deal must be taken off the table. Not clear what that means is that october 31st or january 31st or the end of 2020, no deal has to be taken off the table. That leaves him the necessary wiggle room. Could we be in a situation where the government holds a vote of no confidence in it self . It is not beyond the realm of possibility. It could be one of the smaller parties that say they dont want to give him an election on his terms. They dont want to have a christmas era. In ireland, scotland, very dark and difficult to make a voter turn out why did he make that push before hearing back from the eu . Good question you have this slightly circular situation where the eu want clarity and Boris Johnson says it will depend on what the eu says after that meeting, well find out whether theyll grant three months or two weeks and at that point, in theory, they then have to respond they wouldnt want to be seen as meddling in uk politics thank you pleasure to have you on set. Well take a short break coming up on the show, could jeff bezos lose his crown as the worlds richest person more when we return. Welcome back to street signs. Im Julianna Tatelbaum and im Joumanna Bercetche. These are your headlines barclays with a Third Quarter high thanks to a 67 jump in earnings but ceo tells cnbc brexit will make it tougher to hit markets we had a reasonably rough quarter. Recognize even with brexit, we are still in a pretty benign credit market for the uk hard to swallow. Ab inbev plunges warns tough Market Conditions will continue for the rest of 2019 kering shares surge after posting double digit growth of gucci. Defying fares of the protest in hong kong. The retail giant issues soft guidance for the Holiday Shopping season. It is all about earnings this friday morning. Looking at the big picture here. Fairly mixed moves the cac 40 and the ftse mib just a slight over the flat line. They are trading over. Putting it all together, the stoxx 600 is in negative territory. This comes as a strong day the stoxx 600 gained about 0. 6 . A little retreat but this comes after a really strong run for stocks earnings front and center, a raft of Companies Across the sectors. We are seeing positive signs coming through this is not as bad as the market had feared lets take a look at fx markets. We did have a bit of data coming forward from germany suggesting the contrast to the negative pmi numbers the euro is trading 0. 13 . Boris johnson seeking a general election on december 12. We are waiting to hear back from the eu it has pulled back around 1. 2842 taking a look at wall street, what can we expect from the u. S. Open is fairly mixed start. Fairly muted moves there s p 500 and nasdaq are looking at a slightly weaker start and the dow looking at a slightly positive start the key report, amazon shares dropped about 9 in after hours. Exactly, lets talk about amazon shares. They missed Third Quarter profit expectations it is the first time profit fell year over ear sinyear since 201. Lets bring in the Senior Analyst from fit solutions and elizabeth who has been traveling all over the world talking tech. Pretty sharp reaction in after hours trading. Do you point that down to the earnings or was it more about the out look i think it is a little bit of both the earnings was of interest a lot of that is because of this investment cycle amazon is vesting very heavy in this one day shipping program. It guided that it was going to vest 1 billion in that quarter for warehouses and product and that is going to weigh on costs. We did see margins do down a bit. The other crucial piece is revenues for cloud that was slightly below the estimate of 1 billion that is brother of 35 thats knots bad but tgs a slow down from previous quarters. Some thinking that maybe competition from others like microsoft and google are starting to show up. I want to talk to you about the key side of the business clearly, they have been spending a lot more clearly that will eat into profit it is paying off from a sales perspective. I notice their sales are actually up 25 . Is it not a positive sign of the future that yes, they have this outlay now but is that increasing the market share . Thats what they do they vest to the market share. That is a bit surprising that the market reacted the way it did in terms of profit theyve been doing that for years. They always vest a lot into shipping and warehousing and digitalizing the services. For me, it is the fact that q 4, the expectation is weaker. Between 80 to 85 billion, so in recent brother but lower than expected for many different reasons. Amazon has always been vesting at lower profit and lower profit competitions for tech competition. It feels as though looking across the tech space that the major tech giants are competing with each other more than ever if you see the missions, they are fairly in line with each other. What are the implications of them all moving in the same direction . When you have four or five players. We are talking about the Cloud Business microsoft and google competing with amazon. Streaming, apple and amazon competing. We are talking about the smart home and google and alexa. Facebook trying. They have their own issue. Those are competing with each other in the same market because their core market, they are not going to see that much growth they need to diversify into Something Else that would be circulation as well the focus on this advertising, when we talk about competition, this is another high margin business if this is an indication that maybe they are losing ground on cloud, which currently represents about 4 billion. Clearly is a big opportunity especially given the focus on prime services and digital as well is this also because of the margin i found this out yesterday as you say, cloud is only, what 10 of evenues, it is 50 of the operating profit the margins are so high. Clear liam zon identified that to elizabeths point, want to be in the areas of the juicy profits. E commerce is the margin because they the cloud, the more consumer you put into it, once youve done the basic investment they do it and google and facebook has held big too. Amazon is kind of the same thing. Less content alongside which is very important s subscription is very big the next big one will be health care theyve bought another company this week. They want to be the next disruptor. Theyll need an investor in that as well. One topic we havent reached is regulation. You had an interesting observation that in the conference call, there wasnt a lot of focus is it just a matter of time before amazon comes under scrutiny and regulation comes on the stage. I think what we are seeing is that there is two levels of regulations. In the 2020 regulation put it that way before everybody goes after them and something more across the board in u. S. And europe, which is the selling third party goods. What do they do with the data . The u. S. Are looking into it another layer is on the city level. We are seeing seattle and new york and cities kind of looking at the tech company and be a bit stronger by the way, Companies Facing the most scrutiny still up double digit gains so far, not showing up in the stock prices here. Not a lot of worry nothing happens until people become fix ated on that. They trade like teflon thank you for weighing in sticking in the tech space, twitter shares slumped by just over 20 after the tech Company Reported worse than expected Third Quarter revenue. And flagged technical glitches the social media group cut the out look to be low wall street estimates. Product improvements helped strive daily active usage. 21 intel shares popped after posting better than expected Third Quarter earnings they got a boost from the data center unit which returned to growth over the trade related slow down. They upped the revenue guidance. So bucking the trend from what we had out of texas instruments, it was slightly better speaking with the intel ceo. Semiconductor related stocks seeing gains well go to tokyo for more the nikkei index rose for the fifth consecutive day. Semiconductor related stocks given a boost after intel raising forecast easing concerns about slowing command. Screen holdings climbed 2. 6 chip maker soared 11. 5 . After the firm had reported earnings from the april to september period and lowered the net profit forecast. In other news, continuing to surge up over 8 it had hit the daily limit high after confirming that biogen would produce plans for approval for drug trooemt and stocks as well back to you. Thank you for that color live from tokyo coming up, well hear as the drug maker warns strong momentum in china cant continue more after the break british Authorities Say all 39 people found dead in a refrigerated truck were chinese citizens investigators are looking into one of the most dangerous cases of human smuggling people are leaving flowers where they were found. Police continue to search the site for fingerprints and other evidence it is believed the truck crossed in on a ferry from a port in belgium. They say the trailer arrived at their north sea port and left for england a short time later it is not clear if the 39 victims were put into that container, possibly sealed and refrigerated the 25yearold truck driver is being held on suspicion of murder but has not been charged. Where did that truck originate, when and where were those victims put inside and where were they headed the latest on an on going discussion from a tweet from Houston Rockets manager supporting Hong Kong Nike promotes itself as a socalled social justice champion when when it comes to hong kong, it checks social justice at the door some of the nba players and owners lose their voices when it comes to the freedom and rights for the people of china in siding with the Chinese Communist party and silencing free speech, the nba is acting like a wholly owned subsidy. China has fought back saying beijing is indig nant about his speech describing his comments as irresponsible and urged the u. S. To focus on its own problems including gun violence cast raw zeneca rose revenue overall to 6. 4 Million Pounds i spoke to the ceo about the pharmaceutical companys out look in china. The other element relates to china and Second Quarter result that the government is now putting pressure on the prices the good news is they are innovating pressure faster in the past they have to save money. We expected those to come to bear faster. It is delayed and still coming q 4 will be impacted q 3, we still owe 40 . We are still number one. So 40 growth is remarkable. Long term, what kind of growth rate can we expect in china . We expect the pricing head wins to impact us. We have said we think we can go by midteens which is 15 , maybe a bit more on the numbering basis. I also asked whether the company is prepared for brexit our priority is to make sure the patients dont miss out on their medicine weve done a number of things. We have increased entry levels on both sides of the sea again. What kind of increase by six weeks, so we have almost six months of inventory in place we have reregistered our products in europe the agency said your products need to be administered. The Quality Control measures in europe and sweden, so the medicines manufactured in the uk can be released in europe. Weve looked at supply chain many expect for the period of time i have to say that in our industry, we are lucky because we can fly our products. In the worse case, if everything was impacted we can still fly, which you cannot do with other products today is friday night and closing ceremony for the one young world summit bringing together a few famous faces including Richard Branson and the butch es duchess of sussex. The purpose is to gather young people around the world between the ages of 18 to 35 these have been happening for the last 10 years now. They meet leaders. Leaders council them they go back to their countries and communities and become forces of change jk rolling was there speaking. They have panels for the young people to meet these kind of leaders, they wouldnt be able to normally and to gather together they talk about themes that are very important such as climate change, violent extremeism they have three days of panels and discussions. What is the difference there between the activists and young po politicians. I spoke to the professor there who won the noble peace price. I asked them that, what can these young people do . How can they make change he said they have to ignore and go out and do it themselves. Whatever governments are doing like we see with the protesters. They must go out and take action and not wait for the governments. That was the message i guess youve got to have the ground support, a Grassroots Movement of course thats what they were doing. I spoke to the activist and the model sead burke migratest challenge is that i live in a world that was not designed for me. That was not mallition or intentional. I want to see us live in a more equitable world. The only way is by changing the voices we need to transform company, industry, politics so that those who have been on the per riffry of the world forever now get to have a stake and have power and change the world as they see fit. Do you feel it is changing . Do you feel your voice has been heard . Is. Im very fortunate that i get to take up spaces in the fashion and design industry. For me, i always think how do we take a moment and the discussions around diversity and inclusion is big this isnt about a trend there talking about wanting to have her voice heard. Shes an incredibly impressive young woman. It was inspiring to hear these speakers and see them come together around this forum what an event to take the cue from the youngest generation the most powerful youngest generation whatever they are feeling now, they are getting up and voicing their concerns and making changes. Thank you foreign lightening us that positive note, lets look at u. S. Futures and how things are shaping up. Pretty much a mix across the board. More tech earnings to watch out for in addition to other key big names. That is the big picture. That is it for our show today. Im Joumanna Bercetche and im Julianna Tatelbaum. Worldwide exchange is coming up next. It is 5 00 a. M. At cnbc. 2 00 a. M. In seattle amazon seeing decline. A shake up at citi group 145 s p 500 Companies Set to release numbers next week. Force