For many years they know im wise to it weve had a lot of wins. This was a 7 billion win. Not bad. Washington spares champaign and Leather Goods. Uk Prime MinisterBoris Johnson makes his final pitch but he receives a tepid response. The process, to be frank, a lot of work still needs to be done to reach the object of the backstop a warm welcome to street signs. We are just getting some fresh data out of the eurozone this is the final services pmi and kpcomposite pmi. The final number of 51. 6 versus 52 in august the final composite number is 50. 4 versus 50. 1 in august this comes out of dismal eurozone numbers the final manufacturing pmi fell manufacturing continues to be very, very weak. To have a look at the euro in response to these numbers. Currently trading 1. 5 lower below that 1. 10 level. To get a quick reaction, the global head of Bank Strategy from bank of america merle lynch. We got the final deep in now, touch on the territory the eurozone debt remains very weak particularly in manufacturing and in economies that are exposed to International Trade affected by trade tensions and china germany is the company with the weakest Data Services are affected. Manufacturing is where we see a clear recess so looking forward for the eurozone data to improve, we need to see progress unfortunately, things seem to be getting worse there. Today, just 24 hours after that wto ruling. Pushing on, on the tariff front, the u. S. Government has announced it will impose 7. 5 billion of eu good exports. Claiming they are entitled to retaliate. The german markets are closed today. We are seeing a bit of relief come through this morning particularly in france the cac 40 is up we are seeing gains for the italian, swiss and spanish markets as those terrifs came in line perhaps more aggressive fear that is the narrative but bare in mind those come with heavy losses ending 2. 7 lower President Trump said the wtos decision to green light shows other countries can no longer take advantage on trade. The wto has much better to us since ive been president because they understand they cant get away with what theyve been getting away with which is ripping off the United States. Lets get to willem in brussels what has the reaction been like in brussels . As you might imagine, ahead of the actual details from the trade reps office, we have had that ruling. Very soon there after, the office for the trade commissioner issued a statement which she said this would be country productive we heard from the finance minister in france that american sanctions would be, quote, an economic and political error since the trade rep office came out with some of the details they intend to target, what ive heard from the commission and officials at the commission specifically is that this was no huge surprise. This is morer less wh or less wy expected to give you a time line, we know there will be a special meeting called inside a panel. They will meet on october 14 once they formerly adopt this ruling, it can become enforceable. Jeanclaude, the european president talked about the impact this would have on individuals across the European Union. This is so much more than numbe numbers. Trade was about likelihoods and jobs trade was quick to start and raising quickly. However it starting, a trade war will end quickly in its own camp trade based on a level playing field. We will not be naive but we are ready, willing and determined to beat this. If someone is imposing tariffs on our aviation sector, well do exactly the same exactly the same worth repeating that the eu has said repeatedly for months now, they would like to see a negotiated settlement because both sides have been at fault when itcomes to subsidies or tax. We are expecting a ruling against boeing that would in theory give the eu fire power to impose their own tariffs on aircraft manufacturing and other products theyve drawn up their own list. What will about interesting is the timing if they wait for that ruling or try to move more quickly if the u. S. Do move ahead on october 18. They could use the old wto ruledings which were settled quite some is time ago that would give that ability to impose their own tariffs this was the largest ruling weve had in history even though it was unprecedented, it would allow the eu to respond more quickly and try to give them leverage with their u. S. Counterparts very interesting and unprecedented. As youve seen a number of times, this doesnt mean that will happen. Lets take a look at the french stocks, which are breathing this sigh of relief as washington spares what was once thought to top the list. Rebounding 3. 5 and reacting well to the ruling and the u. S. Tariffs. Food and bev, we are up about 1. 7 the big name there up about 3 s champaign was excluded from this list moving on to look at luxury stocks with the exception of scwatch and looking at reaction of those names given that Leather Goods. Lbmh responding quite well charlotte joins us to help us understand more of what is behind the positive reaction to the news of the tariffs yesterday. First, you can say the overall amount is lower than expected that is part of the relief, and two reasons. The tariff on aircraft would be 10 like 100 like boeing was asking for a lot of u. S. Airlines would order those for the price. They have been putting pressure on the administration to not put massive tariff on the planes they will still order the planes so the future of airbus that is good for the crucial part, Aircraft Parts and components were rumored to be on there they have a final Assembly Line in u. S. , in moebil, alabama they were concerned of disruptions there. Parts being included in that list were on top there as you mentioned, Leather Goods are not included bags and shoes are not going to be hit at least for the moment french cheese is not on the list greek cheese, Italian Cheese champaign, not there spirits is not there cognac is a very big market there. The one painful bit for the French Economy is wine wine will have a 20 tariff. Wine is a big sector the u. S. Is the main exporting market it is about 500,000 related jobz that could have an impact. This is about 70 of production in france goes to the u. S. Second largest exporting industry behind the Aerospace Industry for the french government that could do a bit of damage when it comes to the french stocks, it is a relief because the tariffs are not that bad. Do we have a strategy given here that it looks like it could be a lot more bad for france after they decided not to go ahead with Leather Goods and more important parts of the supply chain for aircraft makers maybe macron got into his ear. Maybe it is part of the strategy of the rhetoric, they didnt go for the most painful ones for europe, at least for the french companies. So hit first and talk after. Especially the case for boeing, we know talk is coming they didnt go for the jugular, not just yet michelin, valeo and faurecia are down german markets are closed today. We are not going to get much reaction from gee german automakers for the moment, german automakers were excluded but it doesnt mean theyll not be included further down the line to weigh in on this topic from auto and Auto Parts Team and citi analyst thank you for coming here. This morning, your sector has been spared in terms of the tariffs. It is not necessarily the end of the road for u. S. eu trade tensions how do you think the risk of the auto sector and european autos getting slapped with tariffs on the line absolutely. A good question here weve seen for 180 days back in may. We are expecting it to come in november this is a material cut for stocks i want to bring our viewers a line we are getting from the wto. Theyll hold a special dispute body to adopt the arbitration decision and airbus subsidies case from a spokesperson on the date you need to watch. Another topic, you say tariffs is on the minds of the investment community, the slow down youve seen in china. Just yet, we spoke to the ceo who said the weakness in china you are seeing in the auto end market has been a real behind re hindrance. What we are hearing from suppliers is that they are looking at Global Production down through may 2020. On china, we are not seeing a rebound. We are expecting october to be down more than 10 it feels like the secondary affects are starting to play out in the market. The bigger question in your mind for the sector is around inventory build. What is going on and should investors be worried when we look at those levels, and sales for the auto sector, it is standing at levels we havent seen since 2009. There are a few moving parts in that product cycle he it feels like there needs to be a big destocking here. Should investors be putting their money here we are concerned well see further down grades coming through. They do point to mountings in the Fourth Quarter very clear. Vice press analyst auto and Auto Parts Team from citi research. Coming up on the show, a careful response from the European Union after the Prime Minister makes his final brexit offer we call it the mother standard of care. Its how we care for our patients like job. His team at ctca treated his cancer and side effects. So job can stay strong for his family. Cancer Treatment Centers of america. Appointments available now. Cancer Treatment Centers of america. 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The question is going to be whether the proposal as tabled meets the very clear guidelines and requirements between the uk and ireland. Based on what we heard, it doesnt necessarily do that just yet. Here is the man task with negotiating the details. There is progress to be frank, lots of work still need to be done to reach and fulfill the three objects of the backstop no border, all idle economic and protecting the market. Protecting the consumer, the businesses inside. The no dole will never be the choice of the eu never. We will continue to reach a deal and work with the uk team. The European Commission and Member States are one of the constituencies the Prime Minister has to look to in order to get a deal done the other is the political establishment back in the uk i note the haeead of the scotti group said this plan is designed to fail. No doubt quite a few labor members. The challenge is not only to get the eu to sign up with these very, very different ideas but if they do sign up and there is a compromise reached, there there is going to be enough support where he does not hold a stable majority. Thank you for breaking that down for us. Lets take a look at sterling. Currently flat versus the dollar it is higher than where we were yesterday. We had seen them dip it has recovered there we are expecting to hear from Boris Johnson. The house of commons waiting to hear from them lets get back to our guest. The global head of bank of America Merrill lynch. That information and drama coming through delivering this new proposal it has been hovering around the 1. 22 mark. What do you pin that down to there is still a lot of uncertainty. There has been progress over the last couple of weeks at least they are talking. There is a proposal on the table. All of these are positive. We are not really close to a deal there is still a lot of details to be decided. I think the next few days and weeks are extremely important. Lets see if the eu is willing to discuss the proposal in detail lets see within the uk if this can have a majority in the department the question will be, which of these details have to be finalized now . Which ones can we leave during the long transition period we have ahead of us when we had the all uk backstop, a lot of details, we didnt need to discuss them. Now that uk has come up with the proposal there are a lot of questions that need to be addressed. The fact that the Prime Minister has zeroed in on this one aspect on the deal, and dropped the other issues he saw with the deal, in terms of the time line here if we look at an extension to the brexit deadline out to january 2020 does that mean sterling stays range bound through that point one could argue that short term could be positive that now will be the no deal showing what will happen back in march that it was sustained. It is important to note that we are coming to the end game here. Well get the final answer by the end of the month both sides we have to decide on the issues involved. How are traders and investors positioning at this point . Looking at the uncertainties, it is neutral. Very recently given that the two sides have started talking but not enough when we change positioning. When we look at the levels, we are in the middle of the possible range it is a 50 50 chance so fairly neutral at this point. Makes sense. Stay with us the global head of strategy at bank of america. Coming up on the show, libra members discuss more in d. C. Welcome back to street signs. Im Julianna Tatelbaum these are your headlines the global selloff looses steam with only the ftse in the lead with the biggest decline in six weeks. The wto gives washington the right to put levees on 7. 5 billion worth of european goods in a long awaited case all of those countries were ripping off the United States for many years they know im wise to it weve had a lot of wins. This was a 7 billion win. Not bad. Airbus rebounds Luxury Brands like lvmh goes higher uk Prime MinisterBoris Johnson makes his final brexit pitch offering a compromise on the irish backstop there is progress but to be frank, a lot of work still needs to be done to reach and fulfill the object of the backstop weve got some more data just crossing the wires now from the uk the services pmi, the final number for september coming in at 49. 5. So slipping into contraction territory. This was unexpected. That was not what the market was looking for today. That doesnt bode well for the manufacturing slump. Remember the manufacturing pmi came in at 48. 3 in september in contractionry territory now we are seeing sterling drop. You remember just before we went to break, it was actually higher on the day reaction to this unexpectedly Weak Services number from the uk still with me, head of strategy at bank of America Merrill lynch. That slump seems to have spread now to the Services Sector what do you make of this that we are seeing here . Overall, when we look at the uk data this year and last year, performing at better expectations i dont think this is the main driver for materialing if we get the deal, theyll start improving. If we dont, it will decline substantially. I would say the move focus on the brexit negotiations. A clear message as the data comes second for now thank you for joining us throughout the first half of the show the global head of strategy at bank of America Merrill lynch. We are looking at a bit of a relief rally coming through. This comes on the back of the wto yesterday and the u. S. Move should threaten europe with tariffs on 7. 5 billion worth of gains. Weve seen the biggest gains in the cac. A lot of that relief comes on the fact that luxury goods, Leather Goods and champaign were spared looking at the u. S. Futures. Yesterday was another tough date we got the adp report. After the big report which was fairly dismall a lot of concern coming through markets there. We are looking at the bounce back it is another big daytoday well get the services ism and another check on the health of the economy and looking at the factory orders and durable goods. Bringing in our next guest who works for tiger 21 he says members are increasingly caution about where to put their money. The chairman of tiger 21 thank you for joining me this morning. It sounds like members of tiger 21 are fairly nervous. I see theyve been putting more money in cash. Youve got some value parts of the market seeing more value than they have in the past so nervous might be an overstatement. As members took money out of real estate. Public equity is at a low of 21 . Private equity is high at 24 . When you add those three up, still over 70 and 12 cash. The reason for high cash is our members want to be able to weather a down turn and not be forced to liquidate and have cash when the opportunity is available. Interesting we make the point on private equity. Weve seen some become a part of that private equity. Our members are entrepreneurs that built great businesses and then existed they are vesting in Small Companies where they really have an edge, where they can make a difference you see these huge private e