British Education Company sells its final stake in random house and ceo announces his retirement and fedex share another profit warning site significant challenges and changes well, good morning. We have a very busy show for you today. I want to get you to some german data lets break it down for you. We know p german business moral has risen in december. That is one positive for the current condition that has come in at 98. 8 higher than the estimate of 98. 1 the Expectations Index coming in higher than the forecast today at 93. 8 versus expectations of 93 Business Climate index was revised to 95. 1. The current index was revised to 98. 8 as well it appears to the upward revisions. The numbers for the month of december are coming in higher than expectations going into today. Worth mentioning that we did have the ifo a while back saying the german industry does remain caught in a session. Because the Manufacturing Sector does remain flagged. Not the least procured by the trade war. That is something that is focused on the ifo and the trade conflict is hampering global trade. Germany is not immune to the development. So well be talking to the ifo representatives. I want to bring you another line on the growth outlook. They are saying they are affirming the 2020 gdp growth of 1. 4 theyve also seen growth that is higher than the previous workup of 1. 4 . What is interesting, the 2020 german gdp still above that german mark. No signs of the recession. Although people have been terrified of that happening. Getting out to annetta we have a lot of data points to be evaluating. There are a lot of data points while manufacturing appears to be in a slump, things appear to be moving in the right direction people turning slightly more optimistic in germany. At least, i think the cut off day for the ifo index was well before we got to the uk i think there was a growing optimism that was going to happen that was going to happen for the manufacturing. It also was already growing due to the trade deal. That is helping the German Economy. The backbone is manufacturing and very hard hit and had reacted negatively more than other countries. We have seen they come back. The bare houses are also empty thats another fact. We might hear that the effect might help the German EconomyGoing Forward as well. As they are already empty, one could see some positive supporting effect for manufacturing here as well back to you. We are all watching that closely. Including madam lagarde is speaking right now for the departing session at the ecb looking at the release just now, Current Conditions have improved expectations have improved from november i want to get your measure and how you see things moving forward. Good morning. Thanks we still have a divided economy. It is good news. Manufacturing is doing bad the Current Situation is bad most Companies Still dont plan to cut back production they have become less pessimistic regarding the next few months so that is good regarding the structure still booming in a way. The sector continues with a little less boom that is not about the expectation. Showing the lowest reading since 2012 weve been moving in the right direction but still stuck at this lower base. How long does this base last for. Very difficult to predict a lot will depend on where the trade is going and the tensions seem to be easing there. That may turn around at any moment one issue is of course the situation of the car industry will there be more issues coming out or improve i think there is no guarantee that well see some turn around next year. It is hard to predict if the end of the slump is already there. One thing raised is the timing of the release. Weve had the general election in the uk and the decisive majority how do you think both of those will play into the german pschy over the next couple of months that is part of the reason for the brightening expectations all of that attends to the end of 2020. It will be difficult to get to a trade deal by the end of 2020, so there are new risks coming up a hard brexit is off the table in the coming months. We saw the trade index and the traders seemed to be more satisfied. Reminding traders of the cut off. How do you think sentiment is involved when it comes to trade and how much of a tail wind does that impose . I think that would bring considerable tail wind expectations are already brightening now. Companies do expect that this will improve at the same time, i think most companies are aware that the situation is always fr fragile. The u. S. Commercial policy is always changing. We never know if trump changes his views. Sir, thank you for your time this morning the president of the ifo institute. Let me take you to some Major Company news this morning. A new auto giant has been born a binding 50 billion merger to create the fourth largest automaker. The 50 50 transaction is expected to close over the next 12 to 15 months. They hope to achieve 3. 7 billion euros annually but will not have to close any plants. Well have to see about that the french finance minister welcomed the deal but said they will ensure the industrial footprint will be met. The reason this is a big deal is that the french government still have a financial stake in peugeot to about 12 you may recall earlier on, there was a potential merger put forward that didnt go ahead today, we do have the green light. That is the screen of the stocks psa up about 1. 6 on the news. Fiat chrysler up about 0. 2 . These discussions have been going on a couple of months now. It is a case of confirming what had been in the pipeline for the last couple of months. Lets get out to the analyst of the automotive sector. I want to ask you about the big take of price this morning not so much for fiat chrysler. It has been in place for weeks and months now, really the company would have indicated that it would progress into the former alliance. I dont think the market is particularly surprised one of the things they said is that they achieved 3. 7 million a year. Where do you think those are going to come from and how re realistic is it to think there will be no plant closures. The plan about a decade ago to create a much bigger car company. He was always looking to partners from that point platform sharing as well of psa particular vehicles. That and purchasing as well as another big area where you can save money joint vehicle programs as well 40 in savings and in the costs of staff in terms of the plan closures, youve got to be careful about things like that in the initial stages i think it would be a surprise if it wasnt a consolidation of the natural waste and the employee numbers what about when it comes to the investment perspective to tackle some of the regulations coming into force. Clearly, they are way behind some competitors merging gives them access to some of that investment what did peogeut get out of this measure . They get scale. They get access to the u. S. Market they now create the fourth largest automaker. The ceo will remain. That will give them the control of the organization. Just scale, scale, scale thats what it is all about. That is where the ministry is going more and more. Creating the merging between carmakers and components the huge slug of costs in the moment between the driving technology rightly set as well. Fca needs this to meet the new eu no sek receipt they are behind where they need to be. There are obvious benefits for both companies thank you for taking the time to meet with us today. Principal analyst at ihs market. Volvo plans to create an alliance with isuzu motors to help to develop electric and selfdriving technology. Volvo will sell the japanese subsidiary as part of the agreement. It will raise the operating income by about 208 million pearson will sell the remaining stake in Penguin Random house raising around 675 Million Pounds the ceo will retire in 2020 once the successor has been appointed. Very large moves today coming up on street signs. First comes china, then comes europe the hits in the next step of the trade war. Details ahead. Tom steyer im tom steyer, and i approve this message. Climate is the number one priority. 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Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. Welcome back to street signs. A very busy morning. Let me take you to european markets. Ftse 100 up about 0. 2 percentage point. It has been a bit of a roller coaster ride for uk, especially domestic stocks after the Prime Minister yesterday said he would like to legislate ruling out the possibility of a further brexit extension was not taken so well by currency markets. The ftse 100 is up the cac down 0. 2 Percentage Points and better ifo data pointing to weak manufacturing data cac is flat. We are watching the psa there that has officially confirmed the merger with fca in italy both of those in the green perhaps psa a little more to the tune of about 2 those are the Major Company news weve been following the ecb president Christine Lagarde has praised outgoing board member for his role taken in the wake of the financial crisis speaking of this event, he called the situation, quote, tragic you had a leader in the person of mario draghi but when he pronounced those famous words, there had to be some people that actually crunched the numbers and how it worked and how it would be possible to deliver on the mission he tasked you with i know how much leadership you applied to the process only due today that it is recognized in the presence of your friends and colleagues. Some might not have agreed with you. Some might agree today generally, thank goodness it was done at the time thank goodness those measures were taken endorsing the policies put in place endorsing her predecessor. After securing trade agreements, the u. S. Is ready to ramp up the confrontation with the eu according to the trade representative Robert Lighthizer they could see increased tariffs in europe. The United States trade deficit with the eu was around 169 billion in 2019. Lighthizer says it is expected to rise to 180 billion this year lets bring in the head of Asset Management at jp morgan. That would be really bad news for the uk economy if we have a new trade war directed this time at europe. Lets be clear, the discussions around the aircraft go back to some of the wta findings from a couple of months ago. We are seeing china and the u. S. Move that is something markets have taken pretty positively. Think about the construction of the u. S. China trade dispute you are seeing fairly broad support from across the aisles the u. S. Going after europe is not going to get the same level of bipartisan support. Some shots across the bow dont seem unusual certainly, the u. S. Has talked about those in the past. We are about to trip into 2020, which is a u. S. Election year. Anything damaging to trade, damaging to u. S. Economic outlook which is something of a poison poison poisoned challac interesting how you see it in the next year. I was here a year ago talking about the Investment Outlook for 2019 nobody thought the year would end up 20 last year was the case with the fed. It seems like no one caught this rally in european equities this year lets look at a few things. Partly, you have an accent in timing one of the low points was the tale end of last year. Last year december was the worst in the stock market since 1931 january was the best since 1987. You had significant v shaped swing in stocks. Global equities are just about regaining the 2018 highs what i do agree with is that europe has snuck up and put in an incredible performance. You look at autos, semiconductors all of the stocks making a tremendous come back can that continue . If you look at where we are today, 2018 and 19 were played out with cap ex falling off. Inventory getting run down toward the end of the last year. That has cleaned out the pipes Interest Rates have come off their lows into next year, we see rates drifting up a little bit we see a little restocking taking place in modest recovery with the pmi and sectors some level of the continuation is going to be necessary lets face it, defensive sectors are already pretty defensive we are optimistic about that happening. It is not 2017 again, lets be clear. A little more confidence that can give you that kind of upward motion. I wouldnt rule out having a continuation thank you for coming on the head of global multistrategy. Central banks gear up to regulate theryo az cptcre. Welcome to street signs. Im Joumanna Bercetche these are your headlines psa shares ramp up as they green light a merger for the worlds fourth largest carmaker. German business morale improves in december. A sign the economy is heading into the new year with more confidence issuing the second profit warning siting significant challenges and changes an attempted coupe. President trump lashes out to House Democrats in a letter that could prepare for an historic vote today that could see the u. S. Leader impeached. It has been a very busy week for data looking at the pmi numbers going out on the rate of 1. 5 higher than the estimate of 1. 4 it is the lowest rate since november 2016. Those numbers have started to drop a little bit for the month up 0. 2 . The reading came in at 1. 7 in line with estimates also up 0. 2 for the month. For the other metric to calculation inflation in the uk has come in 20. 2 for the year slightly higher than the rest of 2. 1 the core come in at 2. 3 weve got health price numbers october house prices up 0. 7 of a percentage point versus 0. 3 in september. This is the lowest increase since september 2012 in seven years, london actually posted a drop inhouse prices for the year down 1. 6 . The cpi numbers come in with a downward projectry draw me a picture of all of the numbers between the pmi numbers that are disappointing and now weve had the cpi and inflation the pmis were weak on monday. That was a number for december a lot of people would say that doesnt matter because that is the election day we have certainty. Well wait for the january number that will be really key as to whether there will be a big bounce as a result of the election or that weakness we saw in the december number as more persistent and invasive. Some of the Growth Numbers would come off after a few months of negative employment numbers, we had a rise of employment unexpectedly the rate remained unchanged at that rate at 3. 8 we had been expecting a rise where it was 3. 8 but it was not too bad actually how can the employment back drop be so strong and overall rates at the high and yet growth levels so low . Very interesting. This is not just the uk but something we see globally. This has been a phenomenal rate of job creation. We found Something Interesting in the numbers which is that the Public Sector is creating more jobs in the private sector in the uk this kind of thing we only have those numbers for september. We dont know whether they had a big rebound in october or the next few months. Very interesting but the private sector may be slowing a little in terms of job creation and the Public Sector taking over. That is kind of good news but only 16 of the uk employment. You cant continue to plug the gap forever. Switching to the Employment Data that has come out where they are dropping. The Monetary Policy report warns that in spring of next year, you could see inflation getting to 1 , 1. 25 . Do you see a possible that governor may have to write a letter explaining why inflation has dropped so much. Yes, the governor writes a letter when it drops 1 . The bank of england is aware of the forces that will take place. Todays 1. 5 is higher than they were inspecting at 1. 4 i realize some of the sterling rally has retraced we have had a rice since the report in november that will bare down on inflation as well. That is one of the reasons we think the move is down certainly two members already voting for the rate cut. We had that at the last meeting. Do you think that continues tomorrow there is not much priced into market fair enough, some people might take the view that it changes everything there is a rebound in Business Confidence we are more cautious we think they already knew about the brexit deal and most of the stimulus there is no big, big new news. It is possible that those two members say things are looking a lot brighter we think theyll hold hard and wait for that data when do you see the cut for next year . May senior uk economist from hsbc sterling has erased post election gains still under pressure as the Prime Minister moves to outlaw the extension beyond december 2020 he spoke yesterday the hard deadline means uk and eu negotiators will have 11 months to hammer out a trade deal hearing that a cliff edge brexit would harm the uk more than the eu those are comments out of the European Commission president in response to a question that was posed to her on what a hard brexit would mean and certainly for the uk economy as well british lawmakers would vote on an amended bill on friday. Speaking since the election. Johnson said the new vote would deliver brexit quickly this parliament will not waist the time in division and delate on friday of this week, well put the withdraw agreement in the poppy thing as we say in wales. This new democratic parliament, this Peoples Parliament is going to do something, mr. Speaker. Meanwhile, the option party is still licking his wounds. Jere Jeremy Corbyn took responsibility for the loss. Agency has raised the uk outlook from stable to positive after the win. Saying the Prime Minister wont stick to his end of 2020 deadline for an eu trade deal. So that is what the s p rate and company are saying in raising outlook. They dont believe that 2020 time line will adhere to we have all of 2020 to worry about. This is the reaction twoyear trading around 0. 53 weve rallied back down to 76. At one point, we were trading back closer to around 90. We mentioned the ecb is holding an event honoring the outgoing member. Hell be joining the bank to work on Digital Currencies the outgoing board member called the announcement of Facebooks Libra a wakeup call he has been outspoken about the demand for cheap Payment Options globally to our guest, it is becoming a lot more mainstream for bankers to ask about digital currency. In Christine Lagardes inaugural response, she gave a long response but one line i want to bring you. She said, we have to be ahead of the curve. That is interesting to hear that kind of language because they are taking Digital Currencies very seriously the wakeup call about the libra with a lot of problems in terms of members i think the idea and the vision was something that was kind of revolutionary. We are talking about a potential global currency that could be easily accessed as well. A lot of concerns on facebook, et cetera. The notion of libra was a wakeup call now what the Central Banks are doing is looking at how they can digitalize their own currency whether that is the pound or the euro and bring it on to a socalled blockchain this created a stable coin. There is a difference between the standard bitcoin and the essential coin backed by fiat currencies right we are talking here about anything related to a bitcoin. The key thing here was the promise first delivered by a bitcoin. Something decentralized. Something that could be traced in terms of the transactions the definition is changing when it comes to the application there. A more centralized blockchain. One that they can see transparency and where they can control the money and where it is going to and coming from. It will be able to counter things like Money Laundering and increase the speed through different currencies that is a big pain point right now. It is expensive and slow this blockchain, the promise anyway whether it happens, the promise is that these are some of the benefits that can be delivered essentially, fiat currencies behind them. The blockchain is said to be a Technology Solution looking for a problem. That is the problem right there whether it is ease of payment but it still needs to be regulated. Take it back it feels like a lot of the hype has fizzled out. It is becoming more mature there still is the lingering threat now we have the likes of the heavy weights industry joining perhaps regulating in an orderly fashion could provide tale winds Going Forward because people will start to trust it more. We have to be careful that the bitcoins and more consumer applications from what the Central Banks are doing. The regulators are looking at more that could help to foster those things certainly, the wind has come out of the sails there is a realization that perhaps the technology that offered so much havent materialized if you look at etherium, it is not just a coin but a platform a lot of the businesses or the coins that were minted have failed over a thousand projects are in the graveyard. A lot of these have not lived up to the hype. Going back to block cane being a solution looking for a problem a few years ago, the industry was talking about it as a Silver Bullet to so many things at that point, it just felt unrealistic. It didnt need to be a solution for this all these solutions, they are just not materializing they are not needed. Or they will be needed or used in the particular industry but not needed for everything. Thank you. It is great to see you covering all things tech with the china angel too. Lets take you to the european markets. Weve got most of the indices trading in the green after a negative session yesterday things are rebounding with slight air of cautiousness the only Major Trading negative respectively up in the green as well weve been watching closely some of the deal making going on, particularly in auto space the big deal between psa, peugeot and fca. All of them trading red. That is unusual. We have the dollar trading stronger versus the euro and the pound but weaker versus the yen and the swiss frank but only mildly the sterling is still very much in focus weve done a full round trip that currency was up around 135 after the exit poll. Now down to around 1. 31. Fedex struggles to deliver for investors as it slashes the 2020 profit forecast for the second time. Well discuss that plus President Trump pushes back at Speaker Pelosi as Congress Gets ared for the fourth ever Impeachment Vote hear his fighting words after the brk. Ea upbeat music no coverup spray here. Cheaper aerosols can cover up odors in a flowery fog. But febreze air effects eliminates odors. With a 100 natural propellent. It leaves behind a pleasant scent youll love. [deep inhale] freshen up. Dont cover up. Febreze. Looking to simplify your skin care routine without sacrificing results . Try olay total effects. One dose provides more vitamin b3 than 50 cups of kale and improves 7 key areas of visibly healthy skin. Try olay total effects. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back fedex shares plunged after issuing a second profit warning for 2020 the figures come as the shipping giant grapples with trade tensions and the fallout from cutting ties with amazon lets look at how some of the other Delivery Companies in europe are fairing in light of the big drop in fedex yesterday. Deutsche down about a quarter of a percentage point royal mail about 2. 2 . It has been quite a positive six months for the royal mail stock up about 17 lets get out to fedex share holder trip miller founding and managing partner. I have to ask you, you must be pretty disappointed by the Earnings Release and the guidance they gave yesterday certainly it was disappointing to all share holders. They are going through a massive transition really shifting to e commerce. You are seeing a lot of growing pains. Certainly global challenges like a slowing down of europe and china like we are seeing here in the u. S. The tnt network a year and a half past due and about 850 million over budget. Paints not such a pretty picture. A lot of times you have to pay your dues before you succeed fedex is doing a lot of the right things for the short term. Looking at the numbers, it seems like one of the major catalyst is that break up with amazon they seem to be getting hit quite hard after announcing they no longer will be working with amazon how does that factor in to your outlook of the company we think they made up the right decision which to some is controversial. The reality which is about 900 million is a small piece of their billion dollar business. Amazon really turned out to be more of an enemy of fedex than an allied customer we think fedex is making the right zridecision with that shit that was profitable business although low margin business that shift in the short run, pa painful. The Holiday Season is shorter and compressed is being affected we think the network is being stressed just like everyone else right now. That is our thought on the amazon piece Going Forward theyll be more focused on the Ground Network id of things it seems like some of the ground costs are swelling do you think that is the right approach we think it is. The opportunity for them and e commerce is emense that plays off of their Ground Network. That shift again in the short run doesnt look so pretty one of the key things that masks some of the opportunity they have ahead is the reality that all of the costs to build out this Ground Network has been put into place by this point you saw cyber monday roll into december this year you didnt see the effects in the revenue in the quarter from that you saw the expenses you didnt see the revenue youll see that slowly play out. We think this is about a year long transition they have ahead of them. Thank you for spilling out your thoughts. Founder, managing partner and share holder in fedex. Nothing more than an illegal partisan attempted coup. An irate sixpage letter to House Speaker nancy pelosi coming amid reports that House Democrats have enough votes to cast two articles of impeachment. Tracie potts joins us live from washington, d. C. Talk us through the numbers. It looks like they need 216 votes for this to pass do they have the numbers does it look like they are going to get there they do seem to have the numbers. Even when you take a look at what weve accounted for about 45 democrats who are politically vulnerable they are not getting support back in their home districts their reelections may be at stake. Even with those included, only three of them are expected to defect that is less than president clinton. The numbers do seem to support impeachment. That letter you talked about was quite a scathing letter. He said to the House Speaker that he has been afforded he believes less due process than the salem witch trials and calls it a failed coup that will fail at the voting booth. This comes ahead of the impeachment and the trial that is expected to clear the president. Looking at the trial, if it does move forward. A lot of questions there about the structure and whether or not witnesses will be called in that trial. Can you give us more detail about what to expect sure. As of now, we dont know of any witnesses being called democrats argue and say all the witnesses who are relevant, they believe. Theyve already testified. They dont want to reinvent the wheel so to speak. In the house in the impeachment process. There are witnesses that will just show up democrats were pushing to hear from the chief of staff. Mick mulvaney. John bolton and others who they believe were very close to the president as they push to get the corruption by joe biden of ukraine was happening. Theyve never spoken or provided testimony. And they wont because the republican majority leader has rejected the request to have them testify in the trial that is supposed to start in early january, assuming the president is impeached today a very historic day coming up for the United States. Thank you for breaking it down for us quick look at how u. S. Futures are reacting s p, dow and nasdaq seen opening up positive. Dow up about 40 points higher. That is it for our show today. Stay with us as Worldwide Exchange is coming up sfloo it is 5 00 at cnbc history in the making as House Democrats are set to impeach a sitting u. S. President for only the third time in our nations history we are live with those latest details in wall street posting the longest winning streak in about a month. Shares of fedex being slammed on an earnings double whammy. And merg