Transcripts For CNBC Street Signs 20170714

Write down the value of u. S. And uk projects by nearly 800 million swedish crowns good morning happy friday you are looking at live pictures of paris where president macron has just arrived for bastille Day Celebrations he is hosting donald trump for the event which also marks 100 years since the arrival of american troops who fought alongside the french during world war i. In the meantime lets show you also what is happening with european stock markets equally sunny this morning stoxx 600 index up by 5 0. 1 . A quiet i said end to a week ths very strong. Lets look one by one. Ext you can see not a whole lot of action when it comes to the sectors, what were seeing is this Health Care House of goods chemicals outperforming, construction down by a third of 1 and that is a factor that well talk about more in the show. President trump says the u. S. Economy can grow at 3 per year. Janet yellen says that it will be challenging the fed chair was asked about the administrations ambitious growth target. And Russia Central Bank governor has appraised the federal reserves path to normization. And she was asked about her take on yellens recent comments. I think that the fed in other countries, they conduct this communication policy to prepare markets to this and i think markets are more or less ready for these movements. European yields have come off of some of the gains they rose on the back of a wall street journal report saying that ecb president draghi will address the conference in august it was widely seen as the unofficial launch of the Bond Buying Program lets talk more about all things ecb with european head of global markets. Good morning to you. Good morning. Whether draghi gives the first signal of tapering in jackson hole or at the actual press conference in frankfurt in september, does that matter . I guess it will come sometime this fall. Yeah, obviously the gap between the two is pretty small. So probably wouldnt matter shunlg hugely the more important question is bra perhaps to what degree does he indicate that tapering is coming and i would argue that signaling very strongly in august when there is still four months remaining of the year is perhaps a period of time that is maybe a little bit too far so we earn vision something along the lines of perhaps the ecb staff being instructed to study different methods of tapering and then to come back to the council at a later date in order to give a plan. That then signals that the intention is there, but it also reassures the markets that it wont be something that could come sooner rather than later. And in that sense perhaps it will contain any unwarranted tightening of monitoring conditions that the ecb are so conscious about. So all about semantics and the nuances of his language when he speaks either at jackson hole or at frankfurt. What do you think is priced in because weve seen in the run up in the euro. Its well boabove the 114 handle it seems that the market has fully priced in taper williing e early part of 2018 what could surprise . I think the Crucial Point is not so much the tapering plan. I think there is a very strong consensus on that in terms of perhaps 10 billion per month through the First Six Months of next year. What is perhaps more important at these levels is the short end of the yield curve so the euro has to lift from the drop in the ten year spread, but i think that will only take you so far when you have for example the future strip still indicating negative yields on three months money in to 2019. So i think what negative yields still priced as far as into 2019 a, the up side scope for the euro from current levels i think could be quite limited so from a market perspective, its about getting clarification in terms of what happens on the interest ratings at the short end of the yield curve and i think clarification on that could be still some time away. So while tapering is on the agenda, i think a lot of the tapering story specifically is probably in the price at these levels one central bank that definitely wont taper is the bank of japan. Meantimejapan, i want to bring you breaking news, they expect forecast to be unchanged. And coupler spending, capex, housing, investment is quite positive they expect gdp to degree grow n the full year. And japanese government at least expects cpi to rise by 1. 1 . That is a long way off the 2 target i guess are they going to be the last to ever taper yeah, if you rely on back 20 portugal and the speeches probably the most interesting aspect was how they just said nothing. So i think that they are very happy with the idea of being outside this kind of shifting Monetary Policy landscape that is becoming more evident across the world. The irony though in terms of all that good news from japan, the most interesting story in gentleman pan is collapse in Approval Rating of Prime Minister abe and the most recent, the biggest collapse of the cabinet Approval Rating so on there is a real prospect there that the markets going into 2018 when we have governor coroda term up in april, and we have the general election by the end of the year, when you have abes Approval Rating collapsing like this, there is a risk that the markets could start too question the long term sustainability of economics. We touched on the ecb, boj. Need to talk quickly about the fed. Obviously were getting that allimportant cpi print today. It wont make a huge difference probably probably i guess were expecting a minor improvement. Do you think the fed is right in thinking that it can hike one more time this year . Well, that is in our projections, but clearly we have to acknowledge that there is a risk that programs they dont implement that rate increase usually cpi is an interesting report for the markets, but it doesnt get huge amounts of attention. I think after the speech from yellen and that reference to perhaps Something Else going on in terms of inflation in the United States beyond the transitory elements that shes already spoken about, if we get another weak report today, i think you could get a bigger fx reaction to a cpe report than weve seen in some time and it could cement the idea that perhaps they wont go in in december so what does it mean for the forecast for how the eurodollar will trade by year end when will it hit 1. 20 . Our projection of 1. 20 is a story for next year, but that is based on that the fed ra raisiss rates in december. And obviously if the fed dont go in december, i do think those prospects that 1. 20 could be a level that question couwe could the end of this year do you have any thoughts on the loonie everyone is applauding for them acting so quickly. So they have raised Interest Rates. I guess we wish everyone acted that quickly and without that much fuss. The remarkable thing is the confidence that they have expressed in inflation lifting to targets all based on the traditional phillips curve economic theory of reduced can excess capacity and inflation moving hiregher i think its a boold cald call wouldnt be surprised if the evidence doesnt stack up. And im a little distracted by what is happening in paris. Please excuse me because were seeing that donald trump has arrived at the bastille Day Celebrations. And hes currently exchanging ple pleasantries with the first lady of france. And a display of a great friendship it hasnt always been this way but it seems that the two leaders really want to put the differences aside and they want to work on what they have in common such as the fight against terrorism and the questioned in syria. Before we let you go, any thoughts on sterling we have a pretty optimistic view in terms of how the brexit negotiations go and were relatively optimistic on the uk economy and we have the first rate increase from the bank of england coming in november and obviously looking at the very near term, if anything, you have to conclude that there looks too be some deterioration perhaps in the way in which these negotiations go. So although i have a reasonably optimistic view going forward, over the short term perhaps there is the potential for further correction lower just on the adjustment of some potential risks that these negotiations dont go as smoothly as perhaps some have been thinking. I do ultimately think a lot of it is noise. I think the uk are going to pay a bill its a matter of getting to a figure and that will take some time but short term perhaps id be a little bit cautious of these levels well seewhether that 60, 70, or 80 billion euros. Who knows that the point thank you so much for that and again, just to remind you, President Trump you saw there arriving at the arc detriumph of for the bastille Day Celebrations go ema do email the show if you are in france, let us know how you are spending your bastille ing up, well be discussing the planned takeover of scott now it appears that Rupert Murdoch is unwilling to offer concessions to gain approval for the deal. Whoooo. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. Or a little internet machine . [ phone ringing ] hi mom. It makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. [ laughing ] so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Call or go to xfinitymobile. Com introducing Xfinity Mobile. A new kind of network designed to save you money. There you go, President Trump arriving at the arc de triomphe for bastille Day Celebrations along with him president macron obviously. Takes glorio it is a glorious day in france and it seems that the relationship between the two leaders has been better. It was quite hostile in the past at some point in 2016, trump called the country a disaster, the French Country of course but now yesterday we heard some pretty conciliatory remarks coming from both leaders, trump calling macron a great leader and a tough president. And then macron said that the two leaders would dine as friends at a very lavish restaurant at the eiffel tower so it seems as though they are trying to put their differences aside and they are trying to work on some of the points that they do agree on such as the war on terror for example. And there maybe is some movement when it comes to the climate accord because trump, and i dont know how seriously you can take this, but trump made some comments about there is some possibility that something could happen with respect to the paris accord, but well see what happens that is the quote coming from mr. Trump. So maybe a little bit of movement there we will keep you updated with some of those pictures throughout the show of course. In corporate news, seb has reported a larger than expected rise in Second Quarter operating profit the bank said customer activity had increased across all segments and skanska shares off by 4. 2 they said massive ride downs in american and british products would result in operating income dropping to 1. 5 swedish crowns and 21st century fox owner Rupert Murdoch is unlikely to offer any new concessions to protect the editorial independence of sky raising the odds of the investigation into the merger britains media secretary Karen Bradley has said the takeover would give murdoch too much media influence. This is as fox and sky face a deadline today to make represent days tag recommendations on the proposed murder the deadline is at 5 00 p. M. This afternoon why with would mr. Murdoch not want to make any concessions if he knows that this leads to a very lengthy delay of this merger its quite possible he just thinks that its pointless because it is such a political decision this has always been a political decision they have lobbied back and forth trying to get away from having to make a decision herself, which ultimately she will have to do. But entirely possible that murdoch thinks that shes made it clear that she is very he minded to refer are to the cma, so just prolonging it is unnecessary. Is there is a chance that his position could before before. Hes offered to have a separate board and secondly guaranteeing to keep sky news branding with the same level of funding for the next five years. But miss bradley said it wont go far enough, she wants to see more. And she said shes very much in agreement with what off con has said so, yes, the idea was to propose further remedy, but i think its quite inevitable, so just get on with the process seems pretty convoluted at this point what are the analysts thinking do they think that the deal will still gee ahead . And i guess we can bring up the share price and see what investors are saying because we know after that decision last month which again was very mixed, what are they thinking now . If we can get the one month to three month would be great. Because what you saw is after the general election, we did see the Share Price Fall off given that there will be more political opposition to this going through. On the 29th of june when she made her last statement, you saw shares spiked around 3. 3 for sky. This is because yes it could be a prolonged time table, it was seen that it will actually go through in the end and then yesterday when we got reports in the news that in fact murdoch wouldnt offer further concessions therefore it would likely go tocma shares came of a little this morning just down slightly. Macron and trump are trumping everything so well get that out to you at some point but at this point, well simply have to show you the pictures of the leaders of both countries arriving for the bastille Day Celebrations when would this deal finally go through then some people are talking about june july next year. That is a long time away and the process could take up to eight months and then because in this scheme of arrangement, you need to squeeze the shareholders out, so that could take another couple months should june 2018 is what people are saying remembering that it had initially been hoped by fox that it would close by the end of this year and there is the share price. Again, talk us flew whthrough w happening. Around the general election, prices did fall oof a little ff bit. Clearly because there will be more political opposition from the labour party we saw them bounce back up again end of june when it seemed moore li more lifrkly that it would goad through. And the deal almost a certainty, but a more prolonged process and then yesterday when it became clear that it will probably go to the cma, thats when we saw the shares start t o fall off a little. Okay. Thank you so much. Well keep our are eyes on that at 5 00 p. M. Consumered a advocacy groups are asking the u. S. Attorney general to block at t from buying time warner they say the 85 billion deal would lead to higher prices and slower innovation and could have problems given President Trumps frequent attacks to time warner cnn. And some of the most influential media and tech executives at the meeting in sun idaho. Ceo say they expect new consolidation as Companies Face pressure from streaming Services Reporter here at the conference, media giants are sitting down with the ceos of the Biggest Tech Companies such as amazon and they are all chasing viewers. We sat down with one of the ceos of cbs and he told us that despite the rise of streaming video, his content business is thriving both the traditional side with a stronger market than expected and digit allally were in a strong position, were getting top first comp dollars from everybody, were able to sell our content all over the place we look at ourselves as a multiplatform kept compacontenty the fact that we would add more content if the right deal was available, we would look at it, but frankly were playing a very good can hand. Were in strong shape. So we dont feel the need to expand or do anything like that. Reporter he dismissed the rumor that cbs will buy studio lionsgate, but he did say he would check out cnn if it became available. We would always look at something look that. Cnn is a very worthy News Organization its something that could enhance cbs. But i dont think that is on the table right now. If it came up later on, it would be something we would look at at reporter with Jared Kushner and ivanka trump here, there has been plenty of talk about politics i asked which policy changes would most impact his bottom line obviously there is talk of tax reform, there is a lot of big business things that are on the table. That will help all businesses there. Whether they come to fruition, we dont know. Obviously its a more user friendly fcc than there is before somebody who is very open to broadcasters and we like that as well and the Trump Administration while adding to business obviously is posting challenges for our news decision. Reporter well see if the lighter regulatory touch enables more deal making from those all here there are certainly of players who could see opportunities. Back to you. The uk government appears to have made a first time acknowledge the of the need to pay a financial settlement to the u chlt eu. The brexit minister said that britain has obligations that must be resolved the tone comes after foreign secretary Boris Johnson told the eu to quote go whistle earlier this week over what he called extortionate payments. Meanwhile Britains Labour Party leader Jeremy Corbyn has met with the chief brexit negotiator in brussels brenting him with an arsenal shirt, corbyn says the meeting was an tauopportunity to set out its brexit vision and it was a discussion of the profits and methods by which brexit could maintain and protect jobs in britain i dont know whether this Football Jersey diplomacy actually works, but maybe anything works at this stage well gee foro for a quick brea. Welcome back to street signs. These are your headlines trump and circumstance i in par as celebrations get under way as donald trump and Emmanuel Macron pr play do you know thewn their dis and european took markets getting off to a mixed start as they prepare for the u. S. Bank earnings parade. And shares in skanska trade lower as they warn it needs to write down the value of u. S. And uk projects by nearly 800 million swedish crowns a quick look at u. S. Futures at this point after we saw a positive trading session yesterday. Dow eked out another record close, nasdaq extending its winning streak to five days. This morning were look a little more mixed s p 500 off by a little more than one, dow jones off by one point as well about that nasdaq set to open higher to the tune of just about two points or so of course all eyes will be 00 that cpi print today when it comes to the european trading session, were looking somewhat mixed as well the xetra dax is hanging on to the flat live. Only crack 40 and ftse eeking out modest gains so a quiet end to what was a strong week. Investors coming back into equities and bond saleoff has halted somewhat. Were sighing t were seeing eurodollar largely unchanged. Were still waiting for thecpi printout of the u. S. Emmanuel macron has just arrived for bastille Day Celebrations. He is hosting President Trump for the event which marks 100 years since the rifrl rifle o an troops who fought along with the france and it seems that we have a bit of a bromance developing between the two leaders, quite a change from the previous relationship between them reporter yes, the relationship between donald trump and Emmanuel Macron started on a bumpy road, but since yesterday, its been all smiles and compliments exchanged between the two President Trumps donald trump saying you have got a very good can president presie Emmanuel Macron called donald trump his friend and treating him to a friendly dinner last night at the eiffel tower. So a dream like visit for the 2ru6r trumps Melania Trump was driven on a boat and given a private visit of notre dame. Obviously it was like a postcard visit for the president ial couple so any of minute now donald trump and Emmanuel Macron have gathered at the bottom of the champselysees and in a minute the parade will start right after the french patrol from all the planes will do their demonstrations. They will be accompanied by f1 from the u. S. Army and then the parade will start the United States are guest of honor, so is donald trump, and so it will be 150 american soldiers that will be leading the way of this parade it is pretty unusual for a big western democracy to show did display of military power. 3700 soldiers on the ground, 200 horses, 200 vehicles, 63 planes. Its really a big showoff for the french that want to gl demonstrate that they are a military partner that the states can count on and also a way to say, you know, that france is back as Emmanuel Macron keeps repeating it. And one of the big differences between the two leaders is obviously the pair ri paris accord its called huge consternation on this side of the atlantic. Pa paris accord its called huge consternation on this side of the atlantic. Ai paris accord its called huge consternation on this side of the atlantic. Ir paris accord its called huge consternation on this side of the atlantic. R i accord its called huge consternation on this side of the atlantic. S accord its called huge consternation on this side of the atlantic. Pas accord its called huge consternation on this side of the atlantic but we heard comments about trump potentially softening his stance how much should we read into this reporter as you said, they have played down their differences, but that doesnt mean that the differences dont remain and of course on trade and on the climate, they have big differences. And yesterday some advisers from Emmanuel Macron were remaining very cautious about what the american president said when he said that there can be somebody possible about the paris agreement, but if nothing happens, that is okay, too that is on purpose very, very vague. And one shouldnt get ahead of ourselves. I dont think that the United States would change their stance for now about climate. But they have played down their differences indeed and they have said also that they are ready to Work Together as they have been doing in the past really, but for example fo planning to Work Together on the roadmap for the postwar for syria. So in the defense area, there are lots of things that france and the United States are already doing and will continue doing under trump and macrons presidency claire, thank you so much for those reports in what is a Beautiful Day in paris lets stick with donald trump. Washingtons nonpartisan score keepers are weighing in on the Budget Proposal and says it could cut the federal deficit over time, but wont balance the budget the cbo also says Economic Growth wont be as fast as the administration promises. And President Trump has also said fixing health care is the only thing harder than achieving peace in the middle east he made the remarks as the gop released its s revised health cared bill kasie hunt filed this report on the political reaction to the latest efforts to repeal and replace the Affordable Care act. Reporter Senate Republicans with no room for error tonight hours after unveiling a new Health Care Bill, two gop senators have already said they wont vote for it. Obamacare. Ive been very vocal. Reporter Mitch Mcconnell has to convince every one of the 50 remaining republicans to vote yes or the bill fails. What is your bet 00 whether Mitch Mcconnell can pull this off . Well, hes good hes pulled more than one rabbit out of the hat reporter to try to win over moderates, the new bill includes 45 billion to fight the opioid epidemic, 70 billion more to stabilize Insurance Markets and help lower income americans pay for care and it keeps some of obamacares taxes on wealthy americans everybody is looking for an idea that is more republican and does not run into the con on september youre taking money from poor people to give it to rich people. Reporter but the new bill doesnt restore are of the deep medicaid kits and it includes a conservative proposal allowing people to buy cheap catastrophic insurance without benefits like made continue iternit maternity. Mcconnell huddling in his office withholdouts trying to convince can them they cant walk away from their promise to repeal bo obamacare because of americans like Loretta Thompson who owns a Small Business outside seattle insurance deductibles for her 19 employees have quadrupled under obamacare. There has to be a better way to provide insurance for everybody, but also level the Playing Field so that Small Businesses arent at a disadvantage that was kasie hunt reporting. And President Trump has suggested he could impose both tariffs and quotas on u. S. Steel imports addressing reporters aboard air force one, he said, quote, steel is a big problem. Were like a dumping ground and im stopping it. Stri industrial metal stocks rallied on those comments. U. S. Commerce secretary wilbur you ross could soon announce what the Trump Administration will do to counter act steel dumping. A leading senator said the news could come as soon as next week, but ross declined to put a time line on that decision. And the uks Financial Authority has proposed a new Premium Listing for government backed companies this a move that could potentially help the London Stock Exchange wins listing of saudi aramco. Its said to be the largest initial Public Offering ever and could include a legally binding agreement to quote it does not abuse Share Holding to the detriment of other shareholders we spoke to saudi aramcos ceo and asked him for an update on the time line of the ipo if you look at 2016 and 2017, its no different than weve seen low prices. What we are concentrate on is the long term and always our investment actually our biggest Capital Program was in 2016 during a low cycle what we are investing and what we are focusing is the long term and our investment is geared for the long term. These cycles, we have been through it for the last couple cycles and always we kept our investment and if you look at today our investment in not only the upstream and downstream, were still continuing and even though we have the highest 260 billion in reserves, we have the biggest expiration program and the ipo is on track for 2018 it is on track for 2018 and a quick can look at european markets ftse 100 gist off. Seems like a looit session by and large fairly quiet end to what was a fairly strong week. Investor ons going back in too equities and at this point in time the bond saleoff has stalled somewhat when it coulds to the fx markets, id sayequally quiet. Just waiting for the cpi out of the u. S. Eurodollar at 1. 1412, but only up by 0. 1 on the day. Dollaryen are is largely flat. Bastille Day Celebrations are taking place where macron is hosting donald trump coming up, a parade of earnings in the urs when it co. S well be discussing after the short break. I am totally blind. And for years ive struggled with non24, a circadian rhythm disorder that can turn my sleep cycles upside down. It kept me from doing the things i truly love to do. Sometimes id show up early; sometimes i was too late. And sometimes, even though i was there. I didnt really feel. There. Talk to your doctor, and call 8442342424 to learn more. Youre still looking at live shots at them showing off the military prowess obviously we have president macron hosting donald trump and his wife melania in paris for those celebrations currently a pretty spec fatacul show by the french military. So do take in the sights it is quite it i a Beautiful Day for those celebrations as soon as we get more pictures, of course well bring those to you. In the meantime, russias Central Bank Governor has praised the federal reserves path to normalization. Its first on cnbc interview and she was asked how far russia is away from introducing a policy of neutral rates. We assess the neutral rates for russia, specific for russia. All calculations show that it can be a 2. 5 or 3 in real terms. Youre policy rate now is much higher than this level of neutral rate but why is this because because we see expectations and we think Inflation Expectations in russia will decline towards our inflation target, then the policy rate can be close to this neutral Interest Rate. In nominal terms because of our inflation target is 4 in nominal terms it can be 6. 5 , 7 why do you think we saw that spike in the june inflation rates and why was it such a surprise indeed we seen this spike but moderate spike of inflation in june, but its because of just the temporary factors receiptsed related to food prices specifically to vegetables because of the cold weather. But now we try too assess this spike will influence Inflation Expectations and we will watch carefully to the dynamic of Inflation Expectations to make a right decision about our Interest Rate sfwlp b but it is your view at the central bank that this inflatf n Inflationary Pressure will be temporary . We think it will be temporary, but we have to be sure that its just temporary factor and what do we need to focus on here for clarity on that, the state of the weather for the farmers or are there other things that are going to be important . We see that the inflation, weekly inflation, came down to the normal level about 0. 1 , the latest data she that inflation came down. But our concern is how this inflation spike transfer to expectations and we will see a little bit later should you are clearly going to be very data dependent from here on in in terms of Forward Guidance for the market, do you feel that the market talking about 8. 5 on the policy rate by the end of the year is roughly in the right ballpark youre absolutely right we are data dependent. But we dont have this Forward Guidance policy. We try to include expectations of market only when we see that these expectations are different from our expectations. And its a big day it for data state side. Latest cpi and also retail sales. Both have popped in to positive territory after the month of negative figures in may. And earnings seen is kicking off in the u. S. As a number of s p 500 firms get set to report numbers. Investors are anticipating a 10 gain in second a quarter results. Bob pisani has a closer look reporter dow hitting a record high and the s p just a stones throw away from one. Financials rose early on when janet yellen mentioned that she was open to easing regulatory burdens on on the banks. They also got a boost on bond yields crude oil prices closed up on reports that ill demand is picking up even in the face of more proufrkductionproduction. And yellen said that achieving President Trumps ghchdp growth goal would be very challenging, her words. And it would appear that the Congressional Budget Office agrees cbo estimates gdp would grow at a rate of 1. 9 under trumps Budget Proposals the cbo also estimates trumps budget blueprint would not balance the budget, butted in would reduce the deficit by a third over the next decade republicans released yet another draft of their proposed Health Care Reform bill which will cover are more out of pocket costs and offer on more options for americans to buy lower premium plans. But so far several senators have already said they would still vote no. Health care stocks rose on the session. Im would be pisani at the new york stock exchange. Three u. S. Badgnk kick off Earnings Seasons wall street is expect position the usual seasonal dropoff in trading income to the seconding quarter, but this year the fall could be even bigger the increase in volatility caused by the brexit vote boosted income last year expectations are lower for banks that have a greater reliance on revenue generated by their traders. Lets get into more detail about what to expect from the Bank Earnings with chief strenlgstrat kev kevin, thank you for get thinking up early. Weve heard the fixed income revenue and trading revenues are not going to be that stellar in this quarter i guess the bar is pretty lee when it comes to the trading side of the business the bar is pretty low. Olee when it comes to the trading side of the business the bar is pretty low. Wlee when it comes to the trading side of the business the bar is pretty low. Ee when it comes to the trading side of the business the bar is pretty low. When it comes to the trading side of the business the bar is pretty low. When it comes to the trading side of the business the bar is pretty low. Low when it comes to the trading side of the business the bar is pretty low trading is an important lever. And wealth management. You hit it spot on in that trading revenues are down, but i think that the Bank Industry has a lot of tail winds behind it. Bank revenues comes from two sides, commercial lending and from Consumer Lending. And i guess Consumer Lending is still very much a bead, but when it comes to the commercial lending, there has to be some doubts and a wait and see mode creeping in when it comes to some of the policies under trump when it comes to potential tax reform that is not really on the more rye zune just yet how much hesitation would you expect to see on a commercial lending side i think the phrases you hit upon are potential and proposed. Right now the uncertainty is affecting the markets more so than any actual policy or change, but again, i think the movement of rates either up or down and on the short term and long term, that will be something that will affect the obviously future of the banks. With that being said, there is not a lot of certainty around that right new were just waiting to see what the guidance is today but earnings numbers today i dont think frankly im not looking for the number itself so much as what is the giuidance behind that number and where are each of the banks feels their future lies whether trading, lending or otherwise that will benefit the Net Interest Margin of some of the big banks and Smaller Banks veers too. At what point do these banks come under a lot of pressure to actually hike the gloss rates though i think were not quite there yet. And again, the rate environment has been odd because its not con send sthaus they want too go up or down in. While the economy obviously has dwun better, i dont think its done well enough too really start to manipulate rates and because of that, i think it provides uncertainty i think you need to see more creeping up before we really reel back. Since the start of june of since we got a the stress test results out from the fed and they all pass with flying cloors and they were able to return money to their shareholder, we have seen banking stocks rally to the tune of 10 since the election banking stocks are up 30 and weve seen this increased rotation out of tech stocks into financials. Do you think this can continue based on a strong earnings season i think you can and you hit on it, first time in seven years that all the banks passed their stress test that is an important marker. And number two, deregulation at some point will happen secretary mnuchin says that will take place if you think about the cool bin nation of financial soundness with which the banks are working, in combination with pea poe future regulatory change, that makes the banks a really strong bet right now and obviously weve seen some of the money move out of tech as that has run up and goon into the bank stocks. I think that is a sound decision because again, it seems to be an environment which if Something Like a dood fraddfrank gets red the banking stwri ing strif iil poised to take advantage of that and we like citi because of their diversity of business. Their trading revenue is a cyclical business, but they he can keeping punching their weight and i think their wealth management, citi private banks in europe in particular have done very well they have a well diversified stream of revenue and from our measurement which we measure customer satisfaction, these people that work with citi like to work with citi and continue to go back and again in an environment where were looking at the future of banks, not the present, citi is well poised to take advantage of that i appreciate your time this morning, kevin and before we wrap up the show, here is an interesting story for you. Goldman sachs is relaxing its yes, sir code for its technical teams as it tries to attraction and retain top talent. That is according to an internal memo the latest in a series of moves to attraction workers who are being recruited by silly could not valSilicon Valley firms and youll want too check out our website, we have a storycou not Silicon Valley firms and youll want too check out our website, we have a story on how to get hired at Silicon Valley her advice is study the company so you know where they are going. That is it for todays she Worldwide Exchange is coming up next. Have a great weekend and well leave you with the celebrations in paris show me winter in july. Epic battles. Ferocious families. Dangerous dragons. Experience game of thrones and all the rest of hbo for free from july 10th through the 16th with xfinity on demand. From action, to comedy, to drama. This summer hbo and xfinity have you covered. And catch the game of thrones season 7 premiere on july 16th. Winter is coming to xfinity. Good morning fed chair giving another shot in the arm to stocks around the world. And President Trump in france and the senate unwraps its new Health Care Bill were covering both big stories for you. And banks on deck, jpmorgan, citi, we also far go and pnc report before the bell well tell you what to expect. Its friday, july 14, and Worldwide Exchange begins right now. Good morning. And a warm welcome