Transcripts For CNBC Street Signs 20170112

Growth of 0. 7 fail so impress investors. And clack action. Shares of novo nordisk sink after a u. S. Law firm files suit against the danish drugmaker over allegations of concealing pricing pressures in its earnings release. Good morning. Welcome to street signs. We want to kick off with breaking data out of germany for the full 2016 gdp data. We are looking at an increase of gdp of 1. 9 year on year. Some forecasts were looking for something as high as 2 . Looking at the components breaking down the picture, private consumption higher by 2 . Government spending by 4. 2 . Now, looking at the household consumption, that was also 2 higher on the year. This follows disappointing retail data we had out a while ago from germany. Overall the gdp figure is higher by 1. 9 . That compares to a forecast coming from reuters for 1. 8 . When you look at the comparison, this figure slightly ahead of expectations. Lets talk a bit also about oil. We have some flashes coming through on norway. Just trying to get that flash for you. Maybe we could put it on the screen. Its about norwegian gas flows to europe. Essentially seeing quite a drop in some of the gas flows coming out of norway as well. Norways oil directorate, theyre looking at oil and Gas Investments for 2017 of 120 billion norwegian corona versus 126 billion for last year. So that investment forecast has come down from last year. And 2018 oil and Gas Investments falling by 5 in 2018 versus 2017. They see around 30 exploration wells to be drilled off norway in 2017. 36 in 2016 as a comparison. So, just some of those expectations coming out with regards to oil and gas out of norway. Lets continue on. Talk also about the markets, what were seeing here in europe. We opened relatively flat to lower. Were seeing that picture remaining here in europe at the moment. Stoxx 600 off about a half percent. Interesting to see the volatility in yesterdays trade especially in the fx markets on the back of trumps press conference. The dollar rally into the press conference, then coming back off again afterwards. Some uncertainty in europe in terms of buying into equities. Looking at specialties where we are seeing trading out taking place, we have the sectors to the down side, healthcare, media, telecoms. Donald trump indicating that pharma is getting away with murder by charging high prices. You saw the s p healthcare sector off by 1 yesterday on the back of those comments. An Interesting Press conference. The takeaway, part of the reason we saw the gyration in the markets, there was much more on the intervention side comments than the supply side stimulus. Once again thanking fiat and ford and saying to gm we hope to see you make similar moves. Talking to Lockheed Martin agai again. The lack of detail on fiscal plans, on tax cuts, on this massive round of spending that the market seems to be pricing in. Yes. Very much so. Here in europe this morning, focus on some bigger retailers out there. Retail galore. Shares in swatch and richemont hit the stoxx 600 summit after Third Quarter sales of richemont beat expectations. Group revenue rose by 5 thanks to strong jewelry demand in december and a pick up in watch sales. Richemont warning that it will face a challenging 2017 in terms of comparables because of a large noncash gain seen last year. Lets bring you a check of tesco shares. The Company Reported Third Quarter like for like sales in the uk growing by 1. 8 at the upper end of analysts range after strong Christmas Trading. The uks largest supermarket said it is on track to deliver 1. 2 billion pounds in full operating profit. However we are seeing weakness in shares this morning. Marks spencer topped their Christmas Trading forecast. A real institution in the uk. Im told people buy their underwear i heard that as well. Good grocery shopping, too. Exactly. But the retailer posted a quarterly growth in clothing and Home Division for the first time in two years. The companys new ceo said customers responded to better availability and prices in that range. Asos posted strong uk numbers with an 18 growth in sales during the last four months of 16. They also said International Retail sales accelerated to 52 boosted by the weaker sterling. The ecommerce site said it will speed up investment plans as it expects sales to increase by a third this year. Shares off about 1 . Primark has powered results at ab foods again with an 11 increase in sales over the christmas period. They also saw a boost from the weaker sterling, with sales from Actual Exchange rates 22 ahead of last year. Ab foods plans to open 1 million square foot of space in the current financial year. Lets talk about all of these retail updates this morning. John cox joins us live from zurich. Good to have you with us. Where do you want to start . In britain alone, 12 trading updates, not to mention what we heard out of some of the swiss companies. Yeah. I could start with the uk, i guess. I know its very topical, the best sales figures there, in a couple years. I tend to think Christmas Trading was gently okay on high street for the uk over the period. Primark with Associated British Foods talking about better like for likes. And obviously we had a bit of a profit warning last week from next. That seems to be an aberration at this point. Im sure it wont be all easy sailing for retailers as we go through the year in the uk. There is probably an inflationary environment coming through. Its going to be tricky, im sure, but certainly probably christmas wasnt as bad as some had anticipated and maybe a feelgood factor still going on in the ik. Just skimming down the line, when i look at the updates this morning from the various uk retailers, it seems like a lot were successful because of the nonfood units, that especially strength in the likes of toys and clothes for tesco, for example, which is known very much for food retail. And also with marks spencer, a boost for the new ceo coming in, given theyre trying the turnaround plan with the focus on food, given that food has been lagging behind. Is that fair to say . Yeah, i think so. As i say, overall probably Consumer Confidence probably wasnt as bad as the you would expect reading some of the headlines going into the christmas period. People actually opened their wallets, and actually went spending. You never are sure if people were anticipating 2017 being maybe slightly more difficult in terms of the everything surrounding what would happen with eu, brexit, and a lot of companies in clothing and elsewhere. Probably having to increase prices this year because of the weakness of the sterling. Certainly probably more positive than expected. You know, elsewhere, of course, in europe if you look at primark sales in europe, they were talking about weak like for likes in germany and the netherlands. The uk is a pocket of strength. To continue with the uk theme. Richemont reporting very good figures. Europe actually up europe swinging positive for luxury goods for the first time in a couple years. Theyre saying a key driver is the uk. So you have a lot of tourists coming into the uk, taking advantage of the weaker pound, and that probably helped a lot of the sort of main high street locations where there are a lot of tourists. Of course outside of the major cities, probably things not quite as robust as they appeared in some of the big tourist areas. John, you like richemont and the broader luxury sector. Looking at the pop in shares for richemont today, significant moves to the upside. Do you think now its about fair value or is there more room to run here . I think there is. If you look at the luxury goods sector overall, we probably bottomed mid year when people were starting to anticipateable. That hangover from that regifting campaign is coming to an end. Now were actually starting to see the data points go positive. Ca caring talking about how momentum was with the company, with gucci. They report in february. Now we have the data points coming through. I would say that estimates across the board are too low. As a result, the estimates have to rise. Optically maybe some of these Companies Look more expensive. But the sale side have been a bit slow in adjusting estimates given the easier comparables, the fact that europe is swings positive. The Greater China region looks boater than 12 months ago. With the trump presidency, thats probably going to be positive for the wealthy in north america. So, for 2017, i think its going to be a pretty good year for luxury goods overall. Even something of a vintage compared to some weakness weve had in the last four, five years. You may remember not 12 months ago people were saying are luxuries finished . That mood has changed around. Theres more upside on these luxury good stocks. John, we have to wrap soon. Given weve been watching consumer staples, give us your thoughts on the sector, overall the youre underweight, are there any bright spots here . Yeah, i think we obviously had a quick derating in the staepal space. And its still going to be a tricky year. Lets not get ahead of ourselves. Everybody is bullish. We saw with the trump comments yesterday, its gotten to be a tricky four years with him and overall. So, you know, i would say nestle i know its a big beast, slower growing over the last couple of years, in a more inflationary market with Commodity Prices rising, pricing should improve for these guys. I would say, look, balanced portfolio, having a bit of nestle tucked away wont be a bad thing. It wont be all up in the market this year. It will be choppy. Thank you very much for that. Jon cox. Get involved. You can find us on twitter. Thats right. nancycnbc. Or louisabojesen. The st. Louis fed president , james bullard, will make an appearance on u. S. Squawk box later today, hosting the show from 13 00 to 15 00. Coming up, well fill you in on the president s strongly worded attack on the Pharma Industries after this break. Welcome back. Youre still watching street signs. The Iraqi Oil Minister saying hes not satisfied with the current level of oil prices and that he wants the crude price of 65 per barrel. He added his country will bide by opec obligations amid questions on whether or not the big oil prodice producers would stick to a deal to cut oil production. Exports remain unchanged for the second month in a row according to reuters choices. U. S. Crude inventories, jumping by 4. 1 Million Barrels last week, sharply outpacing analyst expectations sending the oil price initially lower. Were higher this morning. Refinery crude runs hitting a record high indicating Strong Demand and in turn lifting the oil price. Maya, welcome back. Good to have you with us. You tend to look or you have looked in the past at markets from an emerging market angle. Interested in your old world thoughts given this new era of 2017 were heading into and a new administration state sisided potential tightening from the fed as well. Theres a lot move differences than similarities between the various emerging markets. Certainly pieces of emerging markets like mexico, and deep china which are quite vulnerable to some of the policies that donald trump suggested he might put in place. I think broadly, emerging markets do appear to be in relatively good shape. You compare em to where they before in the taper tantrum, growth is better, inflation lower, deficits are better. So i think from an em perspective things do look better. The countries that look good to me are india, for example, mexico, i think actually prices in a really large risk premium for even donald trump. And i suppose at the weaker end, economies like turkey have quite a lot of political turmoil within them. With mexico, 80 of exports go to the u. S. Its a huge market for them. It is. Do you think the mexican market will be a market where you stay away for the next couple of years given the uncertainty surrounding the relationship between the u. S. And mexico . Youre quite right. The u. S. Matters enormously for mexico and trade matters enormously for mexico. You have a combination of both of those things. I think ultimately its a question of what you think the appropriate risk premium is for what we currently know from the trump administration. So, you know, i think mexico, as we eluded to earlier, prices in a lot of risk premium. You compare mexico to brazil, for example, the currency before the weakness we saw overnight was already one of the weakest currencies last year. Weakened 17 against the real that strengthened 22 against the dollar. Tenyear bonds, you know, have 7. 8 yield to maturity i think, pricing in quite a lot. Columbia thread needle weve been taking the opportunity to build up positions in parts of the mexican bond curve. I was going to say, because yes, once again we heard threats about the wall, more pressure on automakers who have production in mexico, but soon president elect trump wont act alone. He Needs Congress to pass that. Do you think there is too much pricing fear right now. Its not only a function of him putting these things through, but most folk believe full trump is detrimental to the u. S. Economy as well. And dollar negative. And dollar negative. For the u. S. Economies, word from the street says the year of maximum impact, full trump fiscal immigration and trade is probably 2019, yes, you get a boost from the fiscal policies, but the combination of immigration rules hes suggesting and the trade restrictions produce a net drag on u. S. Gdp by 2019. Lots of question marks. One latin American Economy that perhaps may be looking more towards chinas political path, their Growth Outlook than the u. S. At the moment is brazil. Domestically brazil had a rate cut yesterday much larger than many expected. What did you think . It was larger than expected and certainly a place for rates to be cut further. Real Interest Rates in brazil are 7. 5 . The highest in emerging markets, also the upper end of what weve seen in brazil since 2009. Its at the highest since 2009. At the same time the brazilian economy has been, as we know, quite weak. When you have nominal rates of 13, real rates of 7 and a bit, you have the scope to cut do you like that as an investment pick . Its not something we have in our portfolios. As of this morning we have 260 basis points of cuts priced in to the di curve to the next 12 months, which may not seen like a lot, but a lot in the context of brazil. Maya, thank you very much for joining us. Thank you. Lets bring you up to speed on the latest surrounding volkswagen. Because u. S. Federal prosecutors have now charged six volkswagen executive over their alleged role in the emissions scandal. The indictment includes the former head of the vw brand and two previous heads of engine development. This as the german automaker agreed to pay 4. 3 billion in a settlement with regulators. U. S. Attorney general Loretta Lynch said the investigation into vws emissions will continue. This announcement does not mean that our investigation is complete. We will continue to examine volkswagens attempts to mislead consumers and deceive the government. We will continue to pursue the individuals responsible for orchestrating this damaging conspiracy. Shares in volkswagen, even on the news of a draft principle agreement for the 4. 3 billion settlement, we did see the stock run up yesterday. Showing a bit of weakness now off 0. 2 . Year to date, very strong run in volkswagen shares. Just the last three months, 25 . Yeah. What goes down, must come up. Shares in areva falling after the french government offered to buy out minority shareholders. The government will offer 4. 5 euros per share to investors that include total, edf and kuwaits investment fund. Shares trading 10 higher for ubi banca. The bank said it is to raise up to 4. 5 Million Euros in fresh capital. And unicredit said there is widespread interest from investors from its Capital Increase and that it was not requested from regulators. They will book a 1. 7 euro integration cost this quarter. They would be unable to pay out coupons and tier one instruments if they did not carry out the Capital Increase. Shares slightly lower in the session, off by 0. 7 . In the uk, it is a tale of two markets for barratt developments. The Completion Rate outside of london is at the highest level in nine years. However barratt washrned that Completion Rates inside the uk is falling. It sees the pretax profit for the first half of the year rising to 315 Million Pounds. Gemma acton has more on this story. When you look at these comments coming from barratt, does it coincide with the data to sales increasing outside of the capital . Thats right. We had a slowdown in the london capital, particularly the prime london area for 2 1 2 years now. One comment that was interesting this morning was the co was talking about the highland prices within london. The trend throughout the countries is lower land prices. One key reasons behind complexes dropping behind 50 is because land prices are so high. Thats something we dont see easing any time soon. Do you think there will be a correction to this or a response . Less building and then prices will adjust accordingly . It seems there could be quite a lot of correction to come. Many people think certain parts of the market are overheated. A lot depends on politics. The government is involved in directing the market through policies, big housing may be coming out, that should be released on monday. There should be more clarity then on how the government intends to ease the supply crisis. It does seem theyre doing a lot to try to come to terms with that supply crisis. They put a lot of measures in place to try to build more and get some of these developers to build more. The cameron government was more focused on demand and helping people on to the housing ladder which in some ways boosted prices, because they were cutting prices instead of a real increase on the supply side. Gemma acton with the latest from barratts. Stay with us. Well talk more on brexit and the bank of england and so much more check out World Markets live, our blog which runs throughout the european trading day. Well be back in two. Good morning. Welcome back to street signs. Im nancy hungerford. Im louisa bojesen. Your headlines this morning. Riches for richemont. Shares in the swiss luxury group soar after Third Quarter sales top analysts estimates thanks to Strong Demand for jewelry. Marks spencer marches higher after the uk retailer reports robust results for the christmas quarter and its first sales growth in clothing and homeware in almost two years. Shares of Norvo Nordisk sink after a u. S. Law firm files suit against the danish drugmaker over allegations of concealing pricing pressures in its earnings release. And getting away with murder, donald trump takes aim at pharma as he attacks drug pricing and tax inversion deals. They supply our drugs, they dont make them here. Good morning. Welcome back to street signs. It wasnt Just Healthcare that was watching though comments from donald trump, overall traders were keeping a close eye. Market gyrations going on throughout the session as people were trying to assess the various comments coming out throughout the speech. We did see u. S. Markets recover. The nasdaq hitting another record high. The s p closing just short of record levels. Today the s p called lower by 6 points. The dow jones called lower by 50 points. Softness on the nasdaq. Remember that was another record for the techheavy index. Lets give you a snapshot of where with you are in europe, 90 minutes into the trading session. A pair back on the key european bourses, significantly for the ftse 100 after a 12th record close for the uk index yesterday. We have seen the Dollar Strength pare back. Also strong outperformers in basic resources. Metals getting an uptick in the pare back from the dollar. Overall off 0. 3 . Retailers in focus after a slew of earnings and sales results. The german main market lower by 0. 7 . French cac 40 off by a half percent. The italian market moving lower by 0. 5 . Lets bring you up to speed on the fx curve. The currentry ry currency movin higher. And the dollar lower by 1. 3 . Its been an incredible strength of Dollar Strength in recent days. Sterling higher by 0. 3 against the greenback. Britains prime minister, theresa may, has moved to distance herself from a proposal made by immigration minister Robert Goodwill which called for a postbrexit 1,000 pound levee on all skilled eu workers. Goodwill said the move would be helpful for british workers who say they feel overlooked. A spokesperson for the number 10 said the ministers comments was misinterpreted and not on the governments agenda. The governor of the bank of england said brexit is no longer the biggest risk facing the system. Mark carney said it was like a game of jenga, first you take pieces out, but a wrong move could have outsized effects. Lets talk more about whats taking place in britain. Sir charles bean joins us. Charles, good morning. Good morning. Lets start with some of the comments from mark carney that brexit is no longer the biggest risk facing britains financial system. Do you agree with this . Certainly if you go back to the referendum last summer, and the vote, there was genuine concern that if it went in favor of exit that that might lead to turmoil in Financial Markets. The bank had that at the top of its list of Financial Stability worries. For that reason took preemptive action, providing lots of access to Financial Institutions, Funds Available and also took Monetary Policy measures. As it turned out, the Financial Markets and the economy more generally have taken the vote to leave so far in stride. I think its plausible to say that the main Financial Stability worries at the moment at least are not on the brexit question. Some of them are external, like the risk of financial problems in china, obviously there may be a recurrence of the problems in the eurozone through the course of this year. Brexit may come back on the agenda as a Financial Stability risk as we go through this year an theres more clarity about the negotiations and the nature of the exit. But at the moment thats the sort of lower level concern. What do you think needs to be done or what are some of the most important factors that the bank of england and other policymakers can impose in order to ensure stability through the course, not just over the two years but also the transition phase that will probably take at last a decade. As far as the bank of england is concerned, the primary responsibility is to ensure that Financial Institutions are well prepared for any turmoil and volatility that there may be, well capitalized, and uk banks are well capitalized, generally above the minimum. The bank carries out regular stress testing exercises to check that that is maintained. The bank can always be there as a provider of funds to any institutions that get into temporary difficulty. In regards to the wirder econom, its plausible to think the uk will slow this year. The thing that i think has surprised many economic commentators is how robust Consumer Spending has been, Business Investment looks as if its weakening. Thats what one would expect with a height of uncertainty. That wont be maintained through this year because real Income Growth will be squeezed as the big depreciation that we saw ahead of the vote and another 10 depreciation after the vote feeds through into inflation this year. Charles, you might say that Consumer Spending is not the only piece of data that surprised many in the wake of the referendum, theres been a back and forth that economists had a bit of a mike fisher moment when you talk about getting the forecasts wrong what do you think yesterday mark carney said we helped to make the weather by offsetting those risks. Is he right . Was there a michael fish moment . The real michael fish moment is the failure to foresee the big financial crisis of 2007 and 2008. The fact that Consumer Spending is more robust in the shortterm than people expected, i dont regard those as a major error of the profession or anything. Most economists are not forecasting that any way. But to come to the second part of your question, to what extent is it a reflection of the action that the bank took in the summer, clearly thats partly true. They took preemptive monetary action. They cut bank rates by 25 basis points, restarted asset purchases, introduced Corporate Bond purchase and provided an extra funding scheme for the banks. So there was quite aggressive action there in the wake of the vote to try and sustain the economy. I wouldnt put the strength of the economy, since the vote down entirely to the banks actions. Theres lags in these things. But they surely helped to keep growth stronger than one might have expected. Another thing that mark carney said in testimony struck out to me on the financial risk touched on, but perhaps they were greater in the content in the shortterm. Is that a risk for the continent, and do you think negotiators in the form of european leaders sitting over there are underestimating the risks . Are certainly ongoing risks in the eurozone. The greek issue will come back on to the radar this year. We had the problems in the italian banking sector. Portugal is in a challenging situation as well. So, theyre all there. But i dont think that its not clear how that feeds into the negotiations over brexit. It means policymakers have got other things to worry them other than brexit. In that sense theres a distraction. But it may well make them less inclined to give the uk a good deal. Precisely because theyre concerned about making sure that they hold the eurozone and the other eu members in. And you dont want to encourage them to follow the uk line. Especially with key elections coming up. Thank you very much for joining its. Sir charles bean, former Deputy Governor for Monetary Policy. A lot of interesting points brought up. Get involved in the conversation. Always good to hear from you. Find us on twitter. louisabojesen. Im nancycnbc. Lets turn the attention back to washington. The senate has approved measures launching the repeal process of the Affordable Care act. Which is a top gop priority. In a 5148 divide, u. S. Lawmakers passed a budget resolution that will allow them to roll back the legislation known as obamacare without the threat of a democratic filibust filibuster. No determines voted for the resolution, rand paul was the only republican to oppose the measure. Donald trump attacked Pharma Companies in his press conference. He argued that the drug enindustry is gettiendusindustry is getting away with murder. We have to get our drug industry coming back. Our drug industry has been dig as trous. Theyre leaving left and right. They supply the drugs but they dont make them here. To a large extent. The other thing we have to do is create new bidding procedures for the drug industry, because theyre getting away with murder. Today pharma stocks are on the back foot across the board. Novo nordisk is trading lower after a u. S. Law firm filed a Class Action Lawsuit against the drugmaker alledging the Company Reported false and misleading earnings around its insulin drugs. It is not goodenews. Novo nordisk lower by 5 . Donald trump has said that he would not divest from his Business Empire upon assuming the presidency and that he could even run the two at same time, so the business and the president sich presidency. Reporter at trump tower, a moment months in the making. But it wasnt washington front and center. Instead, moscow, russia, dominating Donald Trumps First Press Conference as president elect. For the first time, acknowledging what intelligence officials believe about foreign interference in our election. As far as hacking, i think it was russia, but i think we also get hacked by other countries and other people. Reporter the president elect appaplectic with reports of a memo originally generated as part of Opposition Research outlining personal, lewd, unverified allegations against him. Im also very much of a germophobe, by the way, believe me. Reporter but a senior official tells nbc news, trump was never briefed about it, backing up his argument. Its all fake news. Its phony stuff. It didnt happen. Reporter trump says during the campaign no one on his team had contact with the kremlin. But his political stance toward russia has long been problematic, even in his own party, not that trumps changing his mind. If putin likes donald trump, i consider that an asset, not a liability. Reporter does russia have any leverage over you, financial or otherwise, and if not, will you release your tax returns to prove it . So i tweeted out that i have no dealings with russia. Reporter will you release your tax returns to prove what youre saying about no deals in russia . Well, im not releasing tax returns because they are under audit. Reporter while trump did scold putin for trying to meddle in the election he shouldnt be doing it, he wont be doing it. I think it was disgraceful, disgraceful, that the intelligence agencies allowed any information that turned out to be so false and fake. Reporter its still not clear whether trump trusts the intelligence analysts hes about to lead. Nbcs Kristen Welker tried to find out. Do you trust your u. S. Intelligence officials and what do you say to Foreign Policy experts who say youre actually weakening National Security by waging this war of words against that community . Intelligence agencies are vital and very, very important. Reporter also at the podium today, plenty of paperwork that trump says proves hes doing Due Diligence to avoid conflicts of interest. How . By giving up his position at the trump organization, turning it over to his adult sons, donald jr. And eric. Ivanka trump also stepping away ahead of her move to washington. Creating a trust for his assets, but not a blind trust before inauguration. Hiring an ethics adviser to sign off on any deals that could trigger conflict of interest concerns. Any profits from foreign governments who book rooms at his hotels will be donated back to the u. S. Treasury department and his business wont do any new foreign deals despite just this weekend, he says, the opportunity to do just that. I was offered 2 billion to do a deal in dubai, a number of deals. And i turned it down. Reporter trump says these steps are sufficient. I could actually run my business and run government at the same time. Reporter hes right. As president , hes exempt from federal conflict of interest laws, but the Government Ethics Office says today what hes doing is not enough. Outside experts agree. I think thats more like lipstick on a pig. You know, that might be a nice ornament to put on this trust that he is creating, but it doesnt actually solve the problem. Reporter for all the questions trump took, plenty unanswered. Like whether hed keep sanctions in place against russia, how hed repeal and replace the Health Care Law almost simultaneously. Most likely be on the same day or the same week but probably the same day, could be the same hour. Reporter and who hell appoint as Supreme Court justice. That will be probably within two weeks. Reporter one final question, not asked but maybe no need. Will President Trump look any different from candidate trump . Dont count on it. If they do a bad job, ill say, youre fired. Speaking about the economy, trump also said there were 96 Million People who wanted a job that couldnt get one in the united states. But the facts show that just 5. 4 million say they want a job. The remainder are either retired, sick, disabled, students or running a household. This was a big feature of the campaign trail, too, whether or not the unemployment figures tell the full story. People on twitter yesterday after the speech, they say were entering a new era now, if accusations go towards you, all you say is fake news, then you dont have to sdedeal with the allegations. Coming up here on street signs, will funding for startups hit new heights in 2017 . Well discuss that and also looking at all the other top trends in tech to keep our eyes out for. Thats coming up on street signs. Into. Good morning. Welcome back to street signs. Funding circle raised 100 million in Equity Capital in an investment round spearheaded by excel. They say theyre lending to small and medium businesses and will create 50,000 jobs this year and support Economic Growth in the uk, europe and the u. S. U. S. Tech Lender Silicon Valley Bank says it expects Venture Capital firms to raise less in 2017 than last year due to increasingly expensive equity. Joining us is phil cox and james meeking cofounder of funding circle. Thank you for joining us on street signs. James, youre here straight after announcing the latest funding round. What do you intend to do with these funds. Were super excited to announce it today. 100 million. I think its a good mark of success of our business which is growing well. In terms of what we intend to do with the money, we intend to continue to invest it in technology, to build best in class systems for our businesses and for our investors. We believe we already do that today. We believe the journey ahead of us will have more competition. And we need to focus on making sure those customers have the best technology. You have some big heavy hitting names, excel, temesek investments as well. What did you tell them in terms of their concerns of the risks in the industry when it comes to nonbank lending, increased competition, and the threat that uk officials may be getting tighter on regulations for peer to peer lending. This round was led by excel had been in for many years. Theyre all insiders. They have the best information on those risks than anyone. What the regulators are doing in the uk is what they should be doing, looking at the sector as a whole, understanding the risks. We are a Market Leader in the sector. In our view we are doing everything by the book. We think regulation is good. I think investors would say the same. On the competition side, you know, i think if you look at propositions we are clearly way alhead of any other player globally. And in the uk, 306 Million Pounds was lent through our platform, so investors look at high growth, globally, in a particular ket g market getting more regulated. Youre not investing in funding circle. We have you here from a slightly different angle, talking about venture debt and how this particular part of the industry is faring. What are your thoughts . At the bank we work with, the disruptors, if you like, across sectors, with these highgrowth characteristics, we provide banking and funding from early stage, alongside Venture Capital through growth stages and larger capital. Very similar approach to Venture Capitalists, but providing it from a banking perspective. Was type of environment are you anticipating 2017 to be compared to 2016 . Were bullish on 2017. A lot of capital was raised by investors in 2016. We see the ipo market being strong, given the way markets have moved recently. Investors have a lot of money to deploy. Whats interesting for europe is the fact that investors have deeper pockets here now. They can stay with companies longer. Well see less companies needing to go to the u. S. To raise the series b, series c money and todays news is a great example with funding circle. Does that change once we get brexit underway . Talk today that we might lose the financial passport, bankers are warming up to that. Does that concern you . It affects Different Companies differently. If you are launching a new bank and you passport that regulation, it could hamper your growth objectives. For Companies Like ours, we have to be regulated by every company in the country, in the European Union individually. It doesnt actually make a difference. Ten seconds . Yeah, the European Business landscape is changing. Its being disrupted, brexit just brings a different kind of set of rules, ent prepreneurs wl look to take advantage of that. Thats it for todays show. Im louisa bojesen. Im nancy hungerford. Worldwide exchange is next. Good morning. The trump trade. The president elect speaks and the Global Markets respond. His comments, wall streets commentary and the stock reaction coming up. Washington watch. The senate takes the first major step towards repealing obamacare. We have the details straight ahead. And the city of angels, why another major sports franchise could soon call los angeles home. Its thursday, january 12, 2017, Worldwide Exchange begins right now. Good morning