Strengthened antiMoney Laundering levels. Rising virus cases across europe as the u. K. Government says it cannot rule out a second lock down and the white house grants tiktok another week to seal a deal with oracle and walmart as President Trump gives them his blessing but says they must create a 5 billion u. S. Education fund. It will be a Brand New Company and it will have nothing to do with any outside land, any outside country. It will have nothing to do with china. It will be totally secured well, a very warm welcome, everybody. Lets kick off with a look at markets. It was a brutal start to trade you have the dax trading down more than 2 the ftse underperforming down by 2. 5 and the cac 40 coming under massive selling pressure and a couple of sectors baring the brunt of the hit amid concerns around rising case numbers and further lockdowns across europe and the u. K. In particular and then the Banking Sector taking a hard hit down more than 4 and a couple of banks in focus but the overall sector is also in the spotlight. Despite a series of red flags. The two banks were identified along side several other lenders including barclays in a series of leaked suspicious activity reports known as the fincen files. They stated it worked to overhaul its capacity to fight financial crime. It had also sense invested he havely in its compliance systems. They account for almost 2thirds of all suspicious activity reports leaked in the fincen files. They were award of over 1 trillion worth of suspicious transactions that moved through the account over the past two decades. The issues are already known to regulators and it has responded accordingly. Never theless, were seeing massive selling in the bank. Lets take a look at shares. Hsbc, stanchart and Barclays Barclays taking a massive hit today and this compounds concerns raised last week around the potential for negative rates here in the u. K. A multitude of factors weighing on the Banking Sectors before this was over the weekend. So its a pretty substantial hit. The overall sector is under pressure taking a look at the stoxx 600 banking index. As i said, banks already in the spot leeth for so many reasons and this just piles the pressure on the european and u. S. Lenders. Lets dig into this conversation, this report in more details he has agreed to discuss this report in more detail. The first thing that stands out to me is the fact that were seeing the massive negative reaction in the banks but effectively they have followed the ruls they have filed suspicious reports when they do see issues raised so my first question is why are the banks selling off given they have followed the rules and is there more that the government mechanism should have been doing to catch these suspicious transactions no, youre absolutely right the point that was made very clearly here was that the 2 trillion or so was actually flagged up by the internal compliance departments of the Financial Institutions themselves and then the Treasury Department that looked closely at the reports then decided whether further action needed to be taken. And ultimately we have seen billions of dollars in fines paid by the banks. Its a weak day anyway we have just come off the back of three weeks of lower closes in the r u. S. Sessions but specifically to the banks its so fresh that its hard to get their head around what the future consequences of this could be in terms of further fines that would weaken already challenged balance sheets. They already said they might have to due with it to the tune of 4 billion to 2020 its enough just to cause a cautious behavior around this morning which means effectively just walking away if you dont feel that you need to engage with this story. My final comments would be just as we saw before with the panama papers, lots of red faces but it didnt ultimately lead to a whole lot of new jail time and fines. It feels in terms of the implications from here and potential ramifications looking through the buzz feed piece which they were the First Organization to obtain the documents and then of course share them with journalists, a few of the potential actions that we could see, we could see the requirement that companies disclose their owners to the Treasury Department rather than allow people to hide behind a Shell Company which is one of the tactics used in these Money Laundering cases Greater Public accountability. The fact that its taken until now to see the extent of the suspicious activity thats kbgoe through a number of the investment banks and holding the bank ceos to account further so it feels like longer term thats the risk rather than retroactive or punishment for the banks. Im not going to hold my breath waiting for further progress in this area. We have sat here for years and the improvement of know your client conditions and the need to follow the trail. Well be hearing a whole lot more about those three but we watched David Cameron and tony blair and other leaders take the stand at high profile forums and say this is going to be the end of the elicit flow of money around the world thats related to Human Trafficking and drug dealing and other elicit gains and were still waiting realdy to be sure that that is happening. Of course we know that know your clie client conditions have tightened and they have taken a much more responsible attitude as of late when it comes to dealing with these transactions but let me refer you back to the recent problems we saw in the Nordic Region and the baltics when it came to allegations of dealing in russian black money so as much as we get the claims that things are being straightened out and were clamping down on this behavior theres always one more story that reveals that not everybody signed up on this and ill express one point more of sympathy here, banking ceos say it is quite challenging when youre dealing with the gdpr regulations or other data privacy regulations to actually get a lot of detailed information on existing or potential clients which is why, you know, theres a laughable scenario, positive in this report, that actually some Bank Officials resorted to goggling their clients just to figure out exactly who they were. So a lot more progress needs to take place in this area but im realistic and pessimistic about moving too quickly at this stage. Certainly an appropriate note to end on. One statistic to round out the conversation they received more than 2 million of the suspicious activity reports last year thats nearly double the level they got a decade ago. At the same time, staff has shrunk by more than 10 . So a lot of these crossing the tape for those people to look at. President donald trump approved in concept tiktoks deal with oracle and walmart saying it guarantees security. Under the terms oracle and walmart split a 20 slice of newly formed Tiktok Global which will operate outside of china but President Trump raised concerns by saying byte dance would create a 5 billion Education Fund as part of the deal. The security will be 100 theyll be using separate clouds and a lot of very, very powerful security and theyll be making about a 5 billion contribution toward education well be setting up a very large fund for the education of American Youth that will be great thats the contribution that i have been asking for but well see whether or not it all happens but conceptually its a great day for america. Theyll be hiring at least 25,000 people. It will most likely be incorporated in texas. It will be a Brand New Company it will have nothing to do with any outside land, any outside country. However, byte dance muddied the water saying it would be their subsidiary saying they would own the majority of the new company after the deal is completed. They said it would own 80 of the new company but confirmed plans for a future ipo he joins us now live, argen, just watching President Trump there hes out thing this as a success saying its going to be great for america but the reality is that this is a far cry from the initial deal that President Trump suggested we would be getting well, you remember President Trump was talking about having to ban tiktok unless it sold to a American Company it is to be headquatered in the u. S. With oracle and walmart owning the rest of the 20 stake. Oracle is going to be the trusted cloud provider hosting and handling u. S. User data and also being able to inspect the source code but thats very different because what is not happening is byte dance completely selling tiktok over theyre also not transferring key algorithms and technology over to, oracle as well. U. S. Venture capital has a 40 stake in byte dance. That pushes american money ownership of Tiktok Global above 50 allowing them to claim american majority ownership. Byte dance still has an 80 stake in Tiktok Global the key question is how will the power be divided among the Companies Involved and the investors involved and what does that mean for voting rights. It seems to have been pretty unfair but it has been a reasonable outcome with byte dance that avoided being shutdown in the u. S. And is still being allowed to operate owning that 80 stake so its a positive deal versus what could have been a complete shutdown out of the u. S. Market back to you. Looking beyond just this deal is it your understanding that this arrangement could serve as a model for other transactions, chinese owned or other governments that are seen as adversarial to the u. S. . I thought what was fascinating was the way that they described it very similar to something that apple had to undergo in the chinese market. And thats what they prepared this with over in the u. S. It may well be a model Going Forward when you look at them operating in the u. S overall the u. S. Market still very dominated by the American Tech Companies and the platforms that they provide. The likes of facebook, google, et cetera. They havent always had the biggest steps. Its one of the most successful exports and tiktok one of the most successful consumer exports. Thats why youre seeing this action against the company and if theres any threats perceived Going Forward we could see similar moves made against Foreign Companies ahead. Great to have you on the show thank you for the report coming up on street signs, mourners in the u. S. Pay respect to Supreme CourtJustice Ruth Bader ginsburgut b a battle looms over her replacement welcome back on street signs. Were about an hour 20 from the first trading session of the week we have red across the board the ftse 100 down by 2. 6 . The dax also taking a hard hit down by about 2. 5 but every one of the Major Regions is trading more than 2 lower this is interesting given that it comes after another week of european out performance versus the u. S. While u. S. Markets did end the week in negative territory we have a lot of concerns around renewed lockdowns here in europe across countries and here in the u. K. In particular as the number of coronavirus cases rise. Looking to avoid full nationwide shutdowns again but a lot of open questions remain as to what further action looks like and whether it will be possible to avoid another National Shutdown in several parts of europe lets look at the sector breakdown. Travel and lesiure down by unde 5 so huge uncertainty when it comes to the virus control measures we have top government scientists due to speak to give insight to how the virus is evolving a number of open questions as to what future lock downs and future restrictions could look like banks also under a huge amount of selling pressure. A bit more detail in a moment there. So an acceleration in the selling that youre seeing theres no signs of the sell off. And it released documents showing a fresh scandal hitting the banking schedule and it has revealed details of the scale, the magnitude of the suspected Money Laundering, the money flowing through these banking giants so investors trying to understand what this means for the future of the sector and any potential consequences that may come from the public unveiling of these Money Laundering scandals rolls royce in focus this morning. Looking to raise up to 2. 5 billion pounds in a bid to sure up its finances. Its considering a range of options including debt and equity issue or rights issue according to the Financial Times theyre in talks with sovereign wealth funds as part of the fundraising plans lets get a check on u. S. Futures and how were poised to open on wall street. You did see under performance of the u. S. Markets versus europe last week. We got a pretty big set of red numbers on the board there the dow jones set to open more than 400 points lower. The nasdaq set to open 150 points lower a huge amount of uncertainty in washington on top of all the issues on the ballot already, now we have the Supreme Court rising right to the top of the capital hill agenda. Thousands of mourners gathered this weekend to remember the life of Justice Ruth Bader begi ginsburg she was first nominated by bill clinton in 1993 serving on there for nearly three decades she was known as one of the benches most prominent liberal voices and champion of womens rights President Trump has vowed to nominate her replacement soon in a bid to secure Senate Approval before the november election democrats say it breaks a precedent. Two republican senators also voiced opposition to the move saying that the standard set four years ago must apply now. The director of u. S. And America Program joins us now to discuss the implications of the passing of Justice Ginsberg and what we may see unfold from here great to see you so the stakes here are huge. The implications of a new justice being appointed will span many, many generations. A huge number of issues coming across the Supreme Court in the near future. What can democrats do to stop the republicans from moving forward with the nomination before the november election well, first let me say that the loss of Ruth Bader Ginsburg has been extraordinary she was iconic and theres no other justice in recent history that made the contribution that she has made so its an incredibly important appointment. Theres been very little polling so far the majority of americans dont want to see a new justice appointed before we know who the next president of the United States will be but the fact of the matter is that the democrats have very little control over this they dont control the senate. President trump has made it very clear that he intends to nominate very soon two possible candidates. Both likely to be women. Conservative women and at the moment he has the numbers to push that through. The very interesting thing here is that of course it changes the narrative. It changes what people will be watching in the election the election so far has been really focused on the president s mismanagement and handling of the pandemic both the Public Health implications and the Economic Impact and this puts the Supreme Court right back in front of the electoral agenda. They play a role in some of the issues close to american hearts if i think back to 2018 we were here discussing the implications around Brett Kavanaughs nomination ahead of the 2018 midterms effectively galvanized democratic voters. What are the chances that we see that happen if we do see him move ahead with the nomination what could the impact be on the democrats and the voting constituent s constituentcy . This is going to further drive turn out on the democratic side and probably very much among President Trumps base, the evangelical base and the more conservative part of his base which had this concern for the appointment of Supreme Court justices that are not pro choice or pro abortion rights so it really energizes both sides of the aisle. The democrats will phrase this as an issue of health care theres a real risk of rolling back the Affordable Care act and so in a moment where the pandemic is hitting america so hard where theres not an effective plan for managing it, where we have nearly 200,000 americans that have died, the democrats will of course really push hard on the grave importance of securing health care for all americans theres 23 million americans that stand to lose if the Affordable Care act is knocked back so i think theres a lot at stake and it will mobilize both sides. Certainly mobilize democrats i think there is a concern with what happens to the independent voters those looking to decide who arent favorable toward President Trump in his management of the pandemic but who may well lean conservative when it comes to questions of culture, of womens rights, and so this could actually have an impact. There is a question about what the timing is, right whether he is able to push through a new justice before the election but in that period when were unlikely to actually have a decision on who the next president is, this could still be in play in terms of fundraising, when you talk about how this really has drummed up a huge amount of interest and enthusiasm from voters on both sides of the aisle, immediately after news of Justice Ginsburgs passing the fundraising platform set a new hourly record for donations to the Democratic Campaign democratic causes. How much of a difference could increased funding be at this point in the race . Well, it certainly matters. That up tick in funding was remarkable and extraordinary and so much of it is what happens with the money is it about getting out the vote a huge concern will be two things one is whether people exercise their preferences, whether they express them through the mail in ballots and turning up and the second question is, you know, its sort of independence and regardless of who they want to see in the white house, regardless of whether they vote, theres now a very serious concern in many states and many swing states about how it will go for the mail in ballots and the funding helps with much of that it help with the campaign and it isnt going to help with all of that. Thank you so much for joining us this morning. Director of u. S. And americas program. Were going to take a quick break but coming up, protests break out in madrid over local lock down measures while s p cuts its outlook on spain more when we come back youre not using too much are you, hon . Charmin ultra soft is so soft youll have to remind your family they can use less. Charmin ultra soft is twice as absorbent so you can use less. Enjoy the go with charmin. Welcome back and these are your headlines european banking stocks sink to the lowest level since may after documents claim lenders across europe and the u. S. Facilitated billions of dollars worth of suspicious transactions. Stocks plunge to the bottom of the stoxx 600 as the u. K. Government says it cannot rule out a Second National lock down. The white house grants tiktok another week to seal a deal with oracle and walmart as President Trump gives it his lessing but says byte dance must create a 5 billion u. S. Education fund. It will be a Brand New Company and it will have nothing to do with any outside land. Any outside country. And it will be totally secure and tributes pour in for ruth bad badergi ginsburg while joe bide accuses him of abuse of power. The dow jones set to open 500 points lower and the s p 500 also looking at a muted start. Worth noting that we did see u. S. Markets retreat again last week the third negative week in a row for the three major indices. Of course got continued focus on the virus itself the rising case numbers in europe the fed chair is due to speak a few different times before congress this week so well get a little bit more insight about how theyre thinking about the u. S. Economic recovery and the risks to the overall global outlook. Still a very negative session underway the ftse 100 down 2. 9 so showing no signs of abating given the concerns across the region here in the u. K. In particular were looking ahead to a couple of the top scientists here in the u. K. Government set to speak directly to the public expecting to talk about how the u. K. Hit a critical point and on that note theyre weighing up whether to impose fresh lock down measures after Boris Johnson said the country is now seeing a second wave of cases. Over 13 Million People are already under restrictions they could see tighter rules come into effect saying measures are increasingly likely. He has no symptoms and will remain at home and france reported a Record Number of cases on saturday. The s p Rating Company cited counting physical and structural challenges due to the pandemic they warned that economic weakness could persist into 2022 if a fresh budget isnt passed by lawmakers they have maintained its stable outlook for the countrys economy. Lets get out to charlotte that joins us with more and has been covering the spanish economy throughout the pandemic. Give us insight and should it come as a surprise to the Investment Community no. As we heard, they have that graded theyre on projection this year saying that the recovery was lower than expected but the outlook seems quite different. One of the worst hit countries in the spring. Now we see them coming back at the epicenter for the crisis has been the capitals on friday. The regional authorities for that area announced new restriction measures that come into place today and for two weeks so the specifically Six Districts of madrid, that would be effected by these new measures were presenting 850,000 people effected and there would be allowed in and out of the areas and work or school publ public parks will be closed and limited to 50 capacity. There will be checkpoints and certificates for people coming in and out of this area. So we saw yesterday some protests of residents in this specific area has measures as social discrimination from the authorities as these are some of the poorest areas of madrid and a lot living in those areas. This is a social discrimination for these areas and so we know that the region is meeting with the Prime Minister today to discuss the situation in madrid. The head of the ealth. Thank you for the report he expects public debt to shoot up to 80 of gdp by the end of the Coronavirus Crisis this has been in focus on the back of the alleged poisoning according to german officials of the Opposition Leader in russia. And what this might mean for russian and european relations saying that you cannot claim that another pipeline makes us dependent on russian gas he said when asked russian gas is only a fraction of imports. We get gas from all over europe. Were seeing a bit of movement in the curve this morning. The ten year trading at negative 0. 5 and you have the two year at the bottom of the curve trading at negative 0. 7 our next guest believes the euro area can return to its precovid level of Economic Activity by the Fourth Quarter of last year but warns that a strong europe threatens to drag on the recovery you seem confident that european governments would be able to control the outbreak moving forward at a lower Economic Cost that we saw initially. Now there seems to be a lot more concern around the number of virus cases in europe and also the threat of further lockdowns. Does this jeopardize your view at all well, we have seen a continued rise in cases. And thats clearly a key concern. We have also seen a loss of momentum across europe so following very strong data between may and july we have clearly slowed down in august and september and also notched down our forecast for gdp but we remain pretty optimistic beyond that one reason is that the fatality rates have remained much lower for earlier in the year and the hurdle for return to nationwide lockdowns that weigh a lot on activity was pretty high we also see it so we actually remain quite on the european recovery here. And looking at consensus, we have seen economists revising higher their forecast for this year but in a lot of cases revising down the rebound that theyre expecting to see in the subsequent quarters. Do you think were going to see more of that come through in the coming weeks . Its turned out to be largely anticipated but of course as we just said the risk of new restrictions, some of the loss in momentum and some risks that have arisen is also likely to weigh a little bit of growth in q1 and maybe in q1 as ell. It feels theres been positive momentum it looks as though the virus was more under control in europe and we are on stronger footing and the u. S. Has the election to contend with coming up but it feels like that trade is unwinding a little bit how would you position europe and the potential recovery here versus other parts of the developed world . Europe came out very strongly. Very strong data between may and july where as the u. S. Took a bit in the recovery in july as cases there spike. We have now seen a little bit of a turn here. The u. S. Data has rebounded very strongly in august as we just said theres been the loss of momentum in the European Data in august but we think europe is well placed to continue to recover from here. We have a very supportive policy backdrop where we expect more stimulus and also on the fiscal side where france and germany announced quite a bit of stimulus for next year and we expect more to come on the back of the Recovery Fund so the shifting around in the recovery is important but we still remain constructive of, you know, in terms of where europe is headed here. You mention that your the euro appreciation you dont think is going to weigh too heavily on the european economy. We were all watching closely and put those concerns to rest is this a concern, the fact that we are seeing euro strength here well, i think it will weigh on the recovery to some extent and in our view it reflects an improved outlook on both europe and globally compared to where we were a few months ago so in that sense the stronger euro is a sign of good things rather than denine appreciation with rate cuts so we think thats why theres only limited concern around the strength of the euro and thats why we think the hurdle for rate cuts by the ecb here is actually pretty high. They will provide more stimulus but thats more likely to come by and theyll consider how long it should last and whether the enormous flexibility should be extended to other asset purchase programs that theyre running. And the ecb could have an impact to stemming any major downturn. More qe will come from the ecb given how low the Inflation Numbers are and i think that the communication over the last few days does highlight discomfort with the inflation outlook. And they extend this once it is next year. And theyll do it at the march meeting but its also quite possible that an extension of the program will come if the data flow disappoints between now and the december meeting and in that case, we think, an extension of the Program Beyond the middle of next year would seem likely. Just taking a look now before i let you go at whats happening in the u. K. , well be closely watching him this week and he is due to speak on tuesday and thursday and the big takeaway from the bank of england meeting, the fact that the central bank is looking more closely now at negative rates which draws a stark contrast to where we were a few months ago with him seemingly against the idea of negative rates what do you think has changed and do you think well actually see them here in the u. K. . Theyre being considered and locked out it will provide easing at the november meeting because we think the end will lead to a significant spike in the Unemployment Rate in the u. K. And our base case is that the bank of england will do more qe rather than cut into negative territory so our base case is for another 100 billion pounds at the november meeting. Now if things were to deteriorate more than we expect, then we think negative rates could come on top of that but we think for us its a risk case. Thank you for joining us and sharing your views chief european economist golden sacks. Coming up on the show, ruth bad Bader Ginsburgs death leaves a crucial spot just shy of the election more on that after the break what if you could have the perspective to see more . At morgan stanley, a global collective of thought leaders offers investors a broader view. We see companies protecting the bottom line by putting people first. We see a bright future, still hungry for the ingenuity of those ready for the next challenge. Today, we are translating decades of experience into strategies for the road ahead. We are morgan stanley. As if the stakes werent high enough heading into the november election, now both sides of the aisle incredibly charge on the back of passing of Justice Ginsburg talk us through how this may effect the election result and the campaigning over the next weeks. It is high stakes if President Trump is able to appoint a conservative to the court it could tip the balance of the court and effect decisions for at least a generation or two to come because these are Lifetime AppointmentsPresident Trump and republicans in the senate want to get this done quickly before the election for that reason. The president has said that he will nominate a woman and do it this week. And lower courts are under consideration. This was the opposite four years ago when we were just a few months before the election and president obama nominated someone and republicans blocked it saying it needed to wait until after the election now theyre saying it needs to happen before the election the argument here is that when you have the same party in the white house and in charge of the senate its okay to move forward. When its a different party, then you have to wait. Democrats arent buying that they say its critical they want to wait until after the election but its not clear that theyll be able to block this so theres two republican women that you mentioned, lisa and Susan Collins said they wont go along but based on the number of the ballots in the senate, democrats need two more republicans to come out and agree that they wont go along with this in order to block it and then you have nancy pelosi in the house who is suggesting and hinting that shes got as she puts it a quiver in her arrow that they might either consider impeachment of the president or the attorney general to block this process before the election in the next 43 days. A huge amount of uncertainty and the stakes feel like they couldnt be higher thank you for joining us and bringing us the latest so the losses accelerating in the last half an hour or so, the dax now down nearly 3 over in france, the cac 40 down by 2. 7 and the italian index crossing the threshold as well we did see european markets outperform the u. S. Last week. We have further to fall. Edging about 0. 2 higher last week the second positive week in a row but we cant ignore the magnitude of the sell off taking place this morning taking a look at the worst performing parts of the market quite telling. We have the travel and leisure sector down nearly 6 and this is on the back of concerns around the raiising number of cases in europe and the u. K. Also down nearly 5 . Theres a few of the single names in focus this morning. Deutsche bank down 6 . Well leave you with a look at u. S. Futures where the red is poised to continue we got the dow looking to open nearly 50 points lower thats it for todays show thanks for tuning in Worldwide Exchange is coming your way next. Xfinity is your home for the return of live sports. Tiktok lives on at least for now. President trump gives a thumbs up to a deal but has anything really changed the death of a titan the passing of Supreme CourtJustice Ruth Bader ginsburg