Capitalal has changed its business and cites among other things ge capitals exit of the u. S. And consumer businesses and transformation of its funding model. You might recall during the financial crisis ges finance arm almost took the company down and since that time, it has certainly changed that this or i should say last year undertaking an aggressive plan to reduce ge capital selling over half of its assets and, indeed, since that time, it sold about 166 billion or signed 166 billion worth of deal. Now keep in mind, ge is one of four nonbank companies that have been given this systemically important financial rating. Others include aig, met life and prudential and met life is involvedn a legal battle with the fed having, of course, received a favorable ruling earlier this year by a judge who said tFederal Reserve or the government could not designate it as that. That means these companies are subject to Federal Reserve reover sight and enhanced capital rerooirmts. The fsoc voted to dedesignate ge. Back to you. Thank you very much. This began in april of last year when ge with the stunning announcement it would, in fact, make itself a simpler and what they believe would be more valuable and theyve been right stock has gone up since then. The Company Selling most of ge capitals assets and they have done that. The key is youre going to get the big dividend to ge from ge capital but they have really worked fairly quickly. Yes. To sell as mary said so many of the assets. The big move for the stock actually did not come with that announcement, though it was up last april, but followed in october when triant took the large stake, an endorsement of ge at the time and that helped to send the shares up to levels they hadnt seen in some time. Its been hanging around the 30 mark. Now we have to see because you know that theres a bit of a difference of opinion between nelson peltz, whos been fabulous in this and jeff immelt, how aggressive to be on the buyback. That is true. Im wondering whether jeff immelt had to be restrained while waiting for this designation and whether there isnt going to be [ inaudible ]. When triant came out with its note last fall, that again did help to really propel that stock price, it would seem, they were talking about 40 to 45 bucks of implied value and to your point, jim, they wanted ge to commit to roughly 20 billion of increm t incremental net leverage and therefore, return cash to shareholders through buybacks more than they were already doing. Ge didnt go that far. No. At least not yet. The sifi designation a part of why they wanted to get out of ge capital and the designation one of the things they said on the announcement if in april of 2015 when they said were out of here when it comes to ge capital. This is very important because what it says is, that if you look at this stock, postbrexit, its been a rock of gee brawl tar. Huge exposure to europe and worldwide but the great infrastructure in industrial and we didnt worry about it like we worried about the banks. The question is, are you going to get a big dividend boost now that theyve been saying no. No, right. Are you going to lever. Mum. But this Balance Sheet good. They have root. I come down on the pelt side of this. I would like to see the stock power higher but immelt has look, they have this division thats oil and gas which, obviously, has done better since oil and gas has bottomed. Will they buy more oil and gas. Right. And again triant again im looking at their original white paper asking for them or saying they thought there was an opportunity to return over 40 of what was then the current market cap to shareholders by the end of 18. Try to sell some shares along the way in ge . I did sell down a they did sell down. A percentage of the firm. Became larger and they did reduce ive seen that when theyve been really good is starboard and you dont want to take it as a cue. Starboard we did a piece on insperity, one of the greatest activist campaigns ever. Theyve done well. Sometimes it gets to be too big. A percentage of the overall portfolio if youve done well you want to cut it down. All right. Lets get to the broader market. Sure. As well. U. S. Stocks on track for another day of gains following the major losses that we saw on friday and monday. The s p and the dow each coming off what was the best daily performance in almost four months, jim. Will it continue . You know what, im looking at china and i know people have taken their eye off china, Chinese Market has been up since brexit, the copper market, seeing oil made a reverse, when oil reversed the stock market reversed. That seems like how could oil possibly, possibly beat. I mean beat europe, britain. Our man our man in london. Like a Graham Greene novel. Our man. Not havana. Not in havana. Because hes done unbelievable coverage. The thing is we took our eye off china and therefore took our eye off world growth. The nike Conference Call filled with Amazing Things about china. Carnival cruise Conference Call otherwise considered to be too much capacity coming on they need all the capacity they need in china. The chinese story has taken a back seat and shouldnt. It should take a front see. Thats why the rally has possible staying power until 10 30 when we get the Oil Inventories. Worried about china with the juan declining, worry about capital flows and out flows from the country. Capital flight i should call it. And whether they will need to defend the currency more aggressively and reducing their reserves when they may have a big hole in their Banking System in terms of nonperforming loans. Look. Didnt cant disagree. 25 of exports go to europe. But i am deeply focused on the consumer side because of apple, nike, starbucks, yum, and a belief that consumer is alive and well there, even as the state industrial companies, the ones that are zombies keep pumping out stuff. The iron ore in the last few weeks was the highest its been in a year. I did not. Theres no place to put that and steel in a world where were turning against globalization which is code for turning much not as much china heat as brussels heat but the globalization is the dumping worldwide of everything. Because china changes policy in the state run institutions. Lets keep track of that. You mentioned brussels, of course, and we have our man, hes over there, european officials gathering in brussels for what is the second straight day, of course, following the uks vote to leave the eu. Wilfred frost in brussels and joins us now. Good morning, wilfred. Good morning, thanks very much as well for giving me the credit for moving markets myself as opposed to the story im reporting on. Lets get to the headlines of that story right now. Of course eu leaders today were meeting without David Cameron, 27 of the 28 members of the eu and as theyve wrapped up the meeting theyve been echoing one key message. Lets listen to what that is. Summarized here by the head of the European Commission. There would be no internal markets a la carte so those who want to have success to our market they have to implement for freedoms without exception and i have to add without nuances. So theres a clear dichotomy here for the brits who, of course, want to have free trade, but they want to put curbs on the Free Movement of people, which all of the leaders have been saying today after they met without David Cameron thats not going to be possible. The Clear Division . Terms of what the uk want and the eu willing to give, will we end up seeing a brexit at all. In response to that i would say one key thing. Both yesterday here in brussels and back in the uk, weve heard from politicians that will of the uk people must be adhered to. When David Cameron was there he was saying it clearly as other european leaders here yesterday, but most importantly, back in the uk, the conservative party, both sides of it, the remainers and David Cameron and George Osbourne and leavers like Boris Johnson have said that the will of the british people must be listened to and they will form the next government, no matter how many protests there are in london or words coming out of scottish leaders they dont want it, it is the conservative party that will form the next government. I would add to that once article 50 is invoked thats it. Path for britain to leave the eu is set, still take time, probably two years, and still be uncertain with tough negotiations to happen as weve just said, but the path on its way out will still happen. The focus now is not on so much the european leaders who have wrapped up their meetings but in the uk who is the next Prime Minister and once he or she is chosen when will he or she invoke article 50. Thank you very much, wilfred frost. The allimportant invocation of article 50 but what weve been focused on here the European Banks, particularly the uk banks, jim, and their kriblbly poor performance in the markets until of a bit of a rebound yesterday. Right. Where do we stand today . Europe, of course, was up. Asia was up as well. Broader markets im talking about right now. Look, were looking at at stocks which are signaling dire, dire circumstances. If you look at the bonds, trading quite well. Actually up again. The lloyds paper, the barclays paper very strong. I mean, to the point where you would be questioning if theres anything wrong at all. Now the credit side is more important and smarter than the common side. Take off royal bank. Its a ward of the state. That may be david, we if Washington Mutual were still around we could make a comparison that could make World Bank Look good. This is the real market, so to speak is the bonds. Wilfred, raises really good points which is that the idea that you can have no Free Movement of labor, i mean, thats kind of what the vote was about. When people panic on the stocks saying buy the stocks. The stocks are trading irrationally and i dont want to get in the way of some etf created to drive them down. You said emotion and machines. Machines on friday when i was speaking to people they were indicating the algorithms got it right in terms of how to respond to brexit, as opposed to those acting with emotion who may have, perhaps, not predicted the proper outcome. Its possible i did a piece last night talking about how jpmorgan may be the longterm winner. Obviously everyone feels the yield curve so bad it doesnt matter that you could argue that numbers are all too high because of the yield curve and no one can make any money on their investments and on lending and there could be a recession in the uk, but the bonds would trade down as they did in 2008 and 2009 in our country during the recession. So im just saying im trying to temper the hysteria. Yep. Hysteria is more fun than anything. When youre out but it should be reserved for the stadium. Hysteria in cleveland and there should have been. Why . Lebron james soldier sneak has taken back the mantle from the under armour curry speak. Thats what emotion should be saved for. We will talk about nike in the next block of our show. By the way, before we get there, of course, istanbuls ataturk airport has reopened one day after it was rocked by a terror attack. Explosions left at least 41 people dead, about 150 people were wounded according to turkeys Prime Minister. Turkey is blaming isis for the attack though no group has claimed responsibility for those blasts. Frightening. And tragic. All right. Coming up, of course, as we said nike beats by a penny profit did fall a bit, future orders weighing on the company. We will hear from the ceo on his plan to accelerate growth in key areas. Another look at futures on this wednesday morning. Were back from post nine right after this. The first stock index musicwas createdughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Eu antitrust regulators signaling plans they will conduct a strict review of buyer 62 billion bid for mon san no if that ever comes to pass as a potential deal. This on a day on which monsanto posted results that missed wall street forecasts. They were they were fine, but they were not particularly stellar numbers from monsanto. The focus as you know is on buyer. I reported yesterday ceos had meetings and hadnt made a lot of progress and we got this from the company in its press release. A quote from its ceo hugh grant saying, i have been personally in discussions with bayers management over the last several weeks along with others regarding alternative Strategic Options. Ive got a lot of calls this morning saying what does that mean . And, of course, i then made calls trying to determine what exactly that meant. But i can tell you at this point is, without a lot of detail unfortunately, is that they have had a number of approaches from what im told are other companies, regarding to the just potential swaps. Theres been a concern would they do an asset swap in some way that wouldnt require a shareholder vote that would, in effect, torch the bayer deal, a scorched earth approach. Thats not what were talking about here. Jim, ale told these alternative transactions would provide potentially more value, they are not scorched earth type and may include the potential of a bayer of monsanto that is not germanys bayer. I dont want it to read too much into it. Were not getting a lot of detail on this. But it was interesting that i would assume the lawyers said, please include this in the quote when talking about whats going on. There was a bit more to it, but basically all we know is alternative Strategic Options and all i can tell you is thats not talking about vague asset swaps but things of real significance that might lead to an alternative. What it also does, of course, is give them some leverage as they try to get bayer to increase its 122 a share offer for monsanto despite what were not great numbers the stock is ticking up as were telling people this. We will see whether we get more detail at this point im afraid i dont have names or numbers for anybody. Geez. The cycle has been terrible and no one cares. Consolidation, the equipment doing well and its almost as if everyone is trying to call bo. Bottom in the term. Anything in latin america has been terrible. The stock should be down maybe 4 or 5 if it were earnings. The numbers just trading end peptsly. Absolutely. You would think it would be down on the numbers. Theres something here and im quickly trying to tick through who would be necessary buyers. Its not dupont. Theyre busy. Right. If you look at this you know a company not involved. The question, of course, has been would be asf look to get involved. Yes. We dont know the answer. There have been vague rumors theyve hired up i havent been able to confirm any of that. They could use it. Their away too linked to the fact the they chose to include this in the statements about the ongoing discussions the ceos of bayer and monsanto met deemed it as having been, you know i said they hadnt made progress on anything in terms of price and thats true but theyre talking to me about it being relatively good meetings at this point and continue expect it to continue. But their decision to throw out their alternative options is an interesting one and were not talking about just asset swaps but im told by people familiar with the situation potentially other buyers. David, we are supposed to have a major European Crisis and here you have bayer possibly in a bidding war for a u. S. Seed company. Does that tell you that life goes on . Life does go on. Life goes on. Meanwhile the eu weighing in. The eu is going to try to the eu im hearing already weighing in. The jack people on twitter saying jim, proeu. The eu could stop anything. Remember the old days honeywell dave cody, wish you the best of luck. Of course. But the eu could make it difficult to do movies in london. Yep. All right. Were going to talk nike later in the program. Sorry we didnt get to it there. Looked down, now looking up. The mad dash coming from jim as we count down to the opening bell. Heres another look at futures. A lot more squawk on the street from the nyse straight ahead. , the master of suspense and the macabre. I enjoy keeping people up at night. My Analysis Shows your stories are actually about human connection, even love. Great storytelling needs drama and empathy. My cognitive apis can help any business Better Connect with its audience. You should try writing a book. Find a remote hotel. Bring the family. I do not think that is a good idea. All right. Ahead. All right. We have a mad dash what we like to call for your hump day. Lets get to it. We will talk alco. I have the most complicated transaction ive come across in ages. The executing the separation between alcoa and arconic and Klaus Kleinfeld going to stay with arconic, engineering, and then alcoa will be the heavy lifting metal side. I like everything i hear but theres still way too still too sketchy where the debt will reside. They can say no, thats not the case, but even just a very important piece of paper, im not sure about that, but this is going to happen at year end. You will get a company that basically has that looks like freeport before it went into oil and gas and then or the and then a company like precision. Warren buffet bought precision gas parts and thats going to be the Klaus Kleinfeld side. I like it very much. Youre burdened with what i regard as being a call on the Worldwide Growth particularly china. The stock is down 16. 5 this year because of the underlying because commodities. Yes. Because of sluggishness worldwide and because of the lme. There is excess of aluminum. Klaus talked about dema