Hong kong as strength in china, europe and the americas offset the impact casino shares plunge after the retailer warns offering profit in france miss estimates as social unrest weigh on the company. President trumps impeachment trial begin with a reading of the charges as the Government Watch dog finds the white house broke the law by withholding military aid to ukraine. A very warm welcome to street signs on this friday morning. So far trade seems to be dominated by a few corporate stories. Getting into those starting with richemont reaching expectations despite a slow down in the hong kong market. Blaming political unrest for a severe sales contraction but said double digit growth in main land china more than offset the down turn. Still, sales growth did slow from 4 to 6 in the first half. Shares there almost 5 higher. Casino shares higher after cutting the forecast citing the effects of the ongoing transport strikes. The company which is Closing Stores and selling assets to slash debt said sales in france were flat in the period where it makes 53 of its revenue extended gains to hit a high as it cut 6,000 jobs as it neared the plan to cut coal power. 2. 6 billion euros over 15 years to soften the blow however, that sum is not enough to cover its total costs and loss of profits. Germanys coal exit would transition towards becoming a totally Renewable Energy company. Shares up 2. 7 talking how Global Markets consume. All of the majors there up around 1 . New record highs yet again, the dow is just shy of 29,000. S p and nasdaq new record highs. New sales data the control group for retail sales came at the biggest increase overnight in asia, china gdp data closely being watched that did show some activity in december did show signs of picking up industrial output retail sales coming in slightly higher china tracking 6 growth for 2019 as a whole. 6 for the last quarter. In line with expectations, shanghai pretty flat it was positive from wall street this is why we are trading nicely and making fresh record highs here too it is all great in europe. Lets talk about the individual forces lets talk about the sectors in terms of the sectors, you can see every single one of them trading in the green no surprise some that have association with china are in the green right at the top weve got basic resources up autos also up 1 we had a reasonable result out of renault well get to that shortly. They published the results for the year looking ahead to 2020. One of the reasons why auto is also rebounding. Construction material was strong sector last year utilities rwe is one of the stocks driving the gains there under performers but still positive, oil and telco is up 0. 2 no surprise there. Lets take it back and talk european markets as a whole. We looked at sectors i mentioned basic resources. Ftse is up 0. 30 dax is up and chemical names are outperforming. Something weve been watching closely. Rwe is right at the top of the dax the Utility Company making the transition away from coal towards renewable. Cac is up 0. 8 we had some results driving performance out of luxury names and a lot of them are clustered in that french index and in italy, we have the italian index around 24,000. A positive start to the day and positive end to the week firmly looking ahead now that that china phase one trade deal has been signed. Thank you for the market overview, lets talk trade the European Unions trade commissioner says talks with u. S. Officials have gotten off to a good start as they look to sooth tensions with washington looking to avoid an escalation and reach an agreement however, expressing some skepticism around the u. S. s phase one trade deal with china saying the eu would scrutinize what is client wiompliant managing to meet expectations full year gdp growth came in at 6. 1 just in line with the targeted range. Despite the stimulus and trade deal, Analysts Expect growth to slow further this year we have this report from beijing. Reporter bad news and maybe a bit of good news after the data drop in china talking about the headline number for q4. Full year came in at 6. 1 , exactly what the government was expecting. For the private sector, they were looking for growth this year 2020 to edge down and go sup 6 to 5. 9. Confirming weve got the worlds second largest economy growing at the lowest pace in 30 years the good news maybe is this, the secondary vertical data. Talking about fixed asset productions. Beats on all thee. Industrial production for manufacturing, the beat on that front is positive. Even more positive likely is retail sales the beat on that front is more important because consumption, domestic demand is more important than exports when you add todays numbers to the nice numbers we had in december for the first time in five months in china and preconstruction in november numbers as well. If january and subsequent numbers are positive, it could lay the groundwork for the trend where we have the rebound and recovery even if the economy now is growing and expected to ease off even further on top of that, what could be positive it is still early. Well see how itplays out in the phase one trade deal why, because it maintains the status quo tariffs did not go down but they didnt go up either. In that sense, it buys china a bit of time and breathing room for what looked like green shoots of economic recovery to gain more traction martin for cnbc beijing. Lets bring in the chief investment strategist and economist from City Private Bank listening to the recap, you just said there is a big difference between tariffs not going down and the fact that they are also not going up as well it is a very big deal for markets. Frame it for us u. S. Tariffs went up 37 billion in 2019. When you considered all the potential tariffs that hadnt been put in place but what markets had to fear, would have been 100 billion increase even that would have been 10 of the profits of the large cap firms. With no spill over or retaliation. So this is an increase or loss that will not be repeated in 2020 more than that is producers braced for ado down turn they expected consumers to falter in production, the production of goods is below the demand pace we are confident in this that there would be a snap back in trade for the year. It doesnt mean booming gdp growth but that a lot of profits will be expected for 2020. Are you not worried about the fact that either one of the two parties can wash their hands of the deal if they are not happy the eu wants to make sure that they are compliant. I think we have to put out in our minds that any of this would happen in 2021 thats u. S. Election is a reason to focus in on what it has achieved on the trade front. That this is not going to be a year where you see dramatic escalation you will see the confirmation of rebound of activity. That will be supportive for the market those china sensitive sectors performing very well auto, gdp really bang in line with expectation centered around more stimulus now that phase one is out of the way. Do you think the community is expecting a surge . I find interesting that of 65 economies all expect growth. All 65 china has absorbed trade shock inventories are plunging because producers are even more pessimistic on the outlook economics grow in china and they wouldnt expect anything stronger the expectation is still too bearish. We think generally these firms are going to be a rebound. That is probably not the story for the entirety of 2020 with u. S. Stocks benefitting and the rebounds and things it harmed in economic growth. Those things run their course and we want to focus away on the snap back when we invest longer term that cover the domestic front and the trade war front. As we were discussing in the luxury group that reported today, again seeing a massive growth in hong kong. Do you see hong kong as a major risk to the china story in 2020 . Hong kong is important. There is reason we have had, to be concerned about how it might play into the relationship about these tradie issues, hong kong s relatively depressed right now the role of these tensions is unclear going forward. The impact is relatively small versus entirely in asia. When we talk about investing, particularly those not invested who want to look at a source of diversification. If you took the five largest companies, theyd be worth almost entirety of asia in terms of value there is a lot of reason to think about asia as a growth source for international investors. You seem to be quite optimistic looking at the data here, to come back to julianas point, Infrastructure Investment only grew by a few percent for the year whatever they are doing isnt having as big a multiplier affect that has to be concerning for you in the context of more stimulus to come i think 2020 will be a year in which government infrastructure in china will be stronger as there will be a longer ba longer jack backlog. I am a little concerned that the u. S. Led that by even more 9 percentage points. Thats why we think there can be a catch up in these markets in 2020 well talk about where to put the money given your outlook the American Senate has passed the new north american trade pact replacing the 26yearold nafta deal replacing the new u. S. mexico Canada Agreement having easily passed both chambers of congress, the deal awaits the president s signature and canadas rat if i indication to come into effect. Weve talked quite extensionive extensively. Send us your thoughts on twitter. Still ahead on street signs, Morgan Stanley shares rise more when we come back with sofi, get your credit cards right by consolidating your Credit Card Debt into one monthly payment. And get your Interest Rate right so you can save big. Get a nofee personal loan up to 100k. Get a nofee personal loan sensei beautiful. But support the leg when i started cobra kai, the lack of control over my business made me a little intense. But now i practice a different philosophy. Quickbooks helps me get paid, manage cash flow, and run payroll. And now im back on top. With koala kai. Hey more mercy. vo save over 40 hours a month with intuit quickbooks. The easy way to a happier business. Welcome back to street signs. Morgan stanley shares closed over 6 higher after Fourth Quarter profit surged 56 . Revenue for the period also beat expectations growing 27 the bank posted record annual earnings prompting it to raise return targets for the next two years. The u. S. Treasury will issue a new 20year bond as the u. S. Budget deficit is set to top 1 trillion this year treasury secretary said the department will continue to evaluate other potential new products as well lets take a look at european bonds in europe we are seeing the 10year bund trade around negative 0. 21 . Italian trading 1. 4 in france, that 10year is just a touch above zero lets get back to our guest, chief strategist now phase one is out of the way. President trump touting this as a victory for the United States. There are concerns swirling around europe and tensions could shift here it is significant concern for us in 2021. There will be significant desires to achieve more in the United States that the Auto Industry has been aside of the issues the autos industry could be impacted in europe this is something that holds that sector back what i dont expect is that ahead of the u. S. Election the u. S. Administration would do anything that would risk the repeat of the harm weve seen in investment and Market Conditions and tightening we have seen in 2019 we put that largely off. Cant be sure but we put that largely off post election. Critical timing we assume that is part of the reason you are comfortable raising allocations. It feels like that is becoming a consentual move. We are seeing positioning become some what stretched. Reading the bank report showing that positioning is in the 96 percentile im not sure what that means in the asset class but as investors took 235 billion out of equity funds last year. That was among the three major positionings that we have seen in the last 10 years over recession fears the rallies we are seeing will run its course drift in portfolios will realign some investors naturally but investors have been bearish. Unlike the late 2017, 2018 period, investors are worried. Rather than getting too optimistic and comfortable with the market to your point, equities have seen outflow u. S. Equities certainly underowned when you think about 2020, how is it significantly different from how you would be positioned in 2019. Was it that you would put emphasis on the u. S. Ore the world . The most important thing we didnt even say is that the global bond yield is 1. 7 . That includes sub Investment Grade debt around the world. If you take out the United States, global bond is 7. 7 we saw the bond market get way too pessimistic on the growth outlook. Optimistic on the returns. In august of last year, we went from overweight to underweight bonds. This is a yield environment where now we wont see stronger returns in equities or fixed income we have to concern the alternatives and outlook at the same time. Isnt the shortened bonds the widowmaker trade not shortened bonds tell me if you would like to lend for less in return. Many people do and have because there are pension funds. There is no reason for private individuals to lind negative yield bonds or accept that they will have to give money away again, what happens with negative deposit rates and what that can mean for captured investors is not something private investors have to do we do think there are alternatives when we think about all these things maybe the rebound is priced in what we want is investments that price that current income now. The sub set of relatively Higher Quality companies have existing higher yields far above the bond market and actually grow that income thats where we feel optimistic about. The stocks are more attractive than the bonds. Health cares have led the return theyve outperformed over two years. They dont have this boom and bust risk of recession this risk we talk about in terms of u. S. Shares there are industries that will bounce back. Particular securities that offer a lower relative valuation when you compare them to their own cost to fixed income cap all right thank you for joining us chief investment strategist and chief economist, Citi Private Bank stay with us well be talking about senators that have been sworn in as the impeachment trial officially gets underway. Well be right back. Welcome back to street signs. Im Julianna Tatelbaum and im Joumanna Bercetche on this friday morning. These are your headlines stoxx 600 hits a record high as chinas growth slows. The eu trade commissioner eases fares over tensions with the u. S. Saying talks with washington have gotten off to a good start shares of richemont make a jump after growth in chinas and americas offset the growth and casino with social unrest weighing on the company. President trump impeachment trial begins with a reading of the charges as the watch dog finds the president broke the law by withholding military aid to ukraine after that u. S. Bump in retail sales numbers. We are getting sales figures not as positive. December sales came in at 1. 6 that is taking the threemonth number and analyzing it. It dropped in november and is the weakest since april 2015 so disappointing here. December retail sales down 1 on a threemonth basis. In november, again, the weakest since march 2017 how about if we adjusted for fuel so x fuel sales came in at 0. 7 year on year better than the figure of 6 but still a huge miss versus the consensus reading of 2. 9 . So a big miss on uk december retail sales here in contrast to what we had coming out of the u. S. Even though the uk in general has been coming up, looking disappointing on the sales side looking at the market, those numbers just out well look at how sterling is reacting ftse 100 growing higher. The cac is up. The dax up 0. 6 and in italy, shares trading higher. Investors digesting through the final signing of that u. S. Trade deal and bang in line with expectations at 6. 1 growth. Taking a look at sterling that has turned negative on the day to 1. 3066. Those disappointing retail numbers for december the bank of england will be key to see what the jan numbers look like to get a sense of how the current mood is in the uk. The euro a touch light around the dollar we saw wall street close at fresh record highs as the s p broke through the 3,300 mark for the first time yesterday, Strong Bank Earnings and positive macrodata thats a look at u. S. Futures. Back to u. Politics the iranian leader said that the attack on u. S. Targets were guided by the hand of god. Another phase two is under way, this time on President Trumps impeachment. 100 u. S. Senators have been sworn in as they are set to begin the trial of the commander and chief on january 21st. House speaker agreed to hand over the record of impeachment discussing whether the president should be removed from office. The prosecution will be lead by congressman adam schiff. Well go live to tracie potts. What can we expect over the next week certainly well, this is going to be a trial presided over sworn in among those 100 senators 245 will a senators that will act as jurors any witnesses or evidence presented is still a bone of contention here whether there will be additional witnesses on the house side before the articles were crafted. Now Republican Leaders have decided they will hear both sides and then determine if they want to hear additional witnesses. One point seems to be lev parnis insisting that the president was well aware of his work and others on his behave with ukraine talking about the ambassador and the president demanding she be fired in the efforts to get ukraine to invest gate joe biden and his son had ties to the Ukrainian Company all of that may or may not be a part of the trial that gets under way on tuesday lawmakers want to hear the case on both sides. Thank you, another critical week for u. S. Politics alphabet has joined the 1 trillion club. The Fourth Company in u. S. History to hit the milestone analysts are bullish on the new ceo and optimism comes from their growth and the Cloud Business that grew from 1 trillion to 2 trillion. They expect similar growth but does face challenges as it contends with issues around rust meeting expectations despite the slow down in the key hong kong market. Blaming unrest for a severe sales contraction in hong kong more than offset the down turn swatch shares are also higher. Joining us is luca solca positive shares trading up 5 now. What did you think what do you pin that strength to caller i think the growth we had was possibly the most important driver of this share price reaction in the past few quarters, significant amount of organic growth grew on line plus the 2 these days in the grand scheme of things is quite moderate. The assumed underlying strength is possibly reassuring an Investor Group that was quite muted overall about the prospect of richemont took relatively little to move the share price up considering that investors were impressed and the number of hedge funds would probably short the name makes sense if you look back at 2019, it did really underperform its competitors. Lvmh up 75 . So a strong year for luxury as a hold one thing that i just want to ask you about. I was reading this in one of your earlier reports you have suggested that you think richemont could be a surprise m a market. Indeed. I think the move on tiffany is creating pressure. Clearly if lvmh was as successful as it has been, then this would increase the competitive crash in one of the profit categories, which is clearly jewelry. Not to mention the fact that the megabrand is building in roads when we think about the likes of channel, hermes and gucci, richemont could choose to take it on its chin but we saw the entire in the shape of the megamerger would address the number of issues first, it would add skills in areas that are complimentary weak in caring for example in hard luxury and in soft luxury second, if this was the tie up with the size, it could create new meaning and a new mission. One of the largest stock luxury, multibrand, digital platforms very Little Energy with the call today. If richemont was part of a larger group of significant brands of luxury, then they could france form into a sort of inhouse, neutral platform that the whole industry would probably be encouraged to embrace. Think about for Beauty Retail at lvmh think about travel, retail, that is our logic luca, it is a compelling strateg strategic rational, just because that, doesnt mean a deal will get done what is the actually likelihood of richemont getting involved in consolidation in this space . And what is the time line . You are clearly hitting the nail on the head when we look at the broader luxury goods industry, we find there are very few Public Companies with ownership like tiffany has been, for example. You have controlling Share Holders with significant engagement in daybyday management of course, behind richemont, you have the Rupert Family it is always very difficult, i would say impossible to predict when binary event like this would impact what i would say is that the prospect that such a deal could materialize, if rupert decided it wanted to get a big Minority Stake they did with the tobacco interest then i think that this prospect is actually in the market, could create the flaw for the stock. I think one of the reasons why their share price in the past few years was really that. Before we let you go, ive got to ask you about the unrest in hong kong i know youve used multiple out looks. Logically follow with companies and brands that have extensive interest in china. Other ones should be able for the distraction at best. If consumers and china with the ability to buy these products in china because they have a store nearby and the price is not that different, they are likely going to do that rather than postpone their purchases. More so if the brand interest was strong at the very top of their Shopping List and more so if the brand had good reputation in main land china too making it better to buy at home. Managing director of major goods. So many different angels. Follow us at twitter and get involved coming up, live coverage from davos starting on monday. Stay tuned to find out which World Leaders are heading up the mountain and who is opting out this year . A golf course is designed to be difficult. To challenge your thinking and test your execution. But great minds are driven to seek out the complex. They see what others dont, from an angle others wont take. They learn that embracing those challenges is what sets them apart. I am justin rose, and we are Morgan Stanley. Whwhat do you see . He world, we see patterns. Relationships. When you use location technology, you can see where things happen, before they happen. With esri location technology, you can see what others cant. Oh no, here comes gthe neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. Welcome back to the show data from the u. S. Retail department comes off the Department Control sales which excludes items such as auto and gasoline grew 0. 5 . Largely helping the Global Economy dodge recession. The group warns while overall confidence is at a high, growth momentum is actually stalling. Lets get out to the principal economist for europe conference board. Fascinating result coming out of your survey. Just to pick up on the results we saw and one of the big themes of the u. S. Economy was the consumer how much of the coral relation have you seen in confidence of the economy and retail trends . Well, hello and thank you for having me. If we look at the u. S. , we can see Consumer Confidence has been very high. We should not expect that long because really it has been the consumer keeping it slow since 2019 if you look at data besides confidence and the expanded growth for the political impact there. The labor and Consumer Confidence in other parts of the world covering the strength of the employment back drop your point is the labor market as long as unemployment was decreeing as we saw in the u. S. Which was very, very low numbers. Actually, consumers were looking at the fairly good situation because wages were growing and increasing so really the big question out there is can employment continue to grow at the same rate if i look at the global result, optimism would start to decline right now. Consumer has the feeling of job creation now you can see the number in europe all in all, i think that is the key variable to look at next month and understand whether the Consumer Confidence would stand high or not. Lets switch gears to china we got a fresh reading on gdp and trade war, the hot topic for 2019 how important is the u. S. china trade war to the consumer in china. The domestic chinese person has been pretty resilient to what has gone on on a macrolevel. That is true. We have seen this quarter, Consumer Confidence in china going down that is resiesprecisely relatede labor market i would say probably related to the layoffs and labor market situation more than the trade war. What is important to the trade agreement signed yesterday, the idea that Business Confidence could potentially go up. What we observed right now is this giant gap between Business Confidence and Consumer Confidence around the world. Consumers have been very resilient and Business Confidence has been going down a lot. This gap cannot stay as wide for a long time. Hopefully, the trade agreement brings Business Confidence a little up again. Thank you for your thoughts fascinating insight. The principal economist from europe microsoft has vowed to remove as much carbon as it has emitted in its 45year history working on a carbon removal. Citing the need how Climate Change is a risk the science at this point is very clear if the temperatures rise, i think the impact it is going to have on, lets talk about the economy, the economy we all enjoy, i think will be in jeopardy if the planet, which is the resource, the factory that has fuelled all of our society will be in danger. To me, thats the priority the World Economic forum kicks off in switzerland with global and Corporate Leaders set to ascend on davos President Trump will attend, activist greta and others will be there uk Prime MinisterBoris Johnson will not attend. For more on which Global Leaders will be there, head to cnbc. Com our very own goff will sit down with carrie lam for an interview. He will be very busy he will have a panel and will be joined by u. S. Secretary director and others and the ubs chairman as well a busy week for policy making and discussions coming up in davos next week. A quick look at u. S. Futures looks like we are in for another positive session on the back of fresh record closes for the three majors that is it for our show today. Im Joumanna Bercetche im Julianna Tatelbaum. Worldwide exchange is coming up next. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. It is 5 00 a. M. At cnbc global headquarters. Here is your five at 5 00. Stocks rebounding and surge following that trade deal signing and break outnumbers to kick off the earnings season can anything slow this rally down the 1 trillion club getting more crowded and enter the peacock. The unveiling of its own streaming service with a new strategy aimed at separating itself from the competition