25 jump in earnings and vowing to restart its dividend. Happy holidays for intercontinental. Shares rise as the hotel group increases its dividend on higher fullyear profits. The ceo tells cnbc the impact of sterling weakness is muted. It had marginal impact on us on the year, it reduced our overhead cost on sterling, but we had an impact on revenues because were dollarbased, report in dollars. As far as the rate, very little amount. Good morning. Lets kick things off with a bit of data for the eurozone, that looks to be stronger than forecast. Market february flash composite pmi came in at 56 versus a reuters pole of 54. 3. This 56 print, that is the highest since april 2011 that follows upbeat data from germany and france this morning. In germany, private sector growth the fastest in three years, and in france, the composite pmi at the highest level since 2011. Interestingly enough, also prices rising. That obviously could crimp growth going forward. Now by in large it looks like a healthy eurozone. It does. Or healthier eurozone. Despite that, money still apparently flowing out of the eurozone and into other pockets, despite the fact we could be investor floors. Exactly. Some of the latest data. Just moving on, we are slightly mixed at the moment. A bit more red than green out there as reflected in some of our main European Equity markets. Ftse, crack, ftse mib trading lower. The xetra dax hanging on to slight gains. In the sectors, basic resources leading the way. Banks having been lagging this morning. By in large that has to do with what were seeing from some of the big ones out there, like hns hn hsbc. Hsbc shares significantly short of expectations. They posted a pretax profit of 7. 1 billion, down 62 on the previous year. Hsbc attributed the fall to impairment charges related to its Private Banking unit in europe along with restructures costs. The bank said it may need to relocate 1,000 jobs from paris to london over the next two years in the wake of the brexit vote. Share price fall were seeing today is the biggest fall since august of 2015. The second biggest in more than five years. I cant help but wonder, yes, earnings were bad, disappointing, but isnt it a bit of profit taking, too . This stock has done incredibly well since brexit. Up more than 55 . The best performing stock in europe at least in the uk. People saw it as a brexit hedge. They have the dollar exposure people liked. With the rising dollar, thats why investors kept piling into the stock. They increased their capital strength by 200 basis points in more than one year. Theyre at a level of 13. 6 . I feel profit taking is the name of the game today. A lot of that sponginess has precisely come from the exposure to asia as opposed to europe, where they had this buffer there. One thing i would say, i think a lot of people might be asking is this the last time that well see numbers that are dominated by these big oneoffs, by the reorganization, by the restructuring or the writedowns of assets. They announced as well that theyre shutting another 62 Bank Branches in the uk in 2017. Thats on top of the 223 that they shut in the uk last year. So definitely going through the moves to reorganize and bolster a tougher environment in europe. Not sure how long that will continue. The outperformance for sure. Definitely. Also some disappointment over the level of Share Buybacks. Ubs looking for 3 billion pounds in Share Buybacks, we got 1 billion. Sorry, looking for 3 billion. They say the 2017 outlook is more of the same. So wow. Again, down 6 . And they added that little line that theyre worried about further protectionism essential essentially. A lot has do with the u. S. Administration. They did highlight that. In other news, putting the banks aside for a american, Anglo American posted a 25 increase in annual core earnings and a 34 drop in net debt. The Mining Company said it will resume paying dividends by the end of the year after a suspension in late 2015. Bhp billiton has someone back into the black. They posted a net profit of 3. 2 billion, up from a 5. 7 billion loss in the same period the prioryear. Paul rankin from vsa capital joins us around the desk. Bigger than expected dividend from bhp. Anglo looking at reinstating the dividend. For a long time investors were buying into these stocks because of capital returns. Are we back to the miners being a capital return story essentially . I hope so is the answer. The institutions are certainly hoping so as well. Just having some restraint on the capital spend in order not to get the Large Companies back into the same situation they were before 2014 and 2015 where they were spending lots of money on mines to produce material that wasnt really needed in the market at that time. Finally getting back to the situation where the capital restraint is allowing returns now for shareholders. To what extent is this just down to windfall profits coming from the huge rise in copper prices and iron ore prices. Iron ore up 28 in 2016. Nobody saw that coming. Are these profits sustainable . The profits are sustainable but i would bring issue with the phrase of windfall profits. They are definitely not windfall profits for these firms. The actual prices being received by the companies are a return to where we were in 2014, for instance, as far as prices on the commodities themselves. It has a lot to do with the efficiency these companies are being able to bring through as far as being able to produce more with less. How about the shifts slightly into not shift, pbut expansin into the oil and gas segment. Is this going well . Will they do more of it . Bhp had success in this particular situation, having a significant component of oil and gas. Most Mining Companies on the other hand dont have success doing this. They are a significant variance from what is the normal thing. I dont see that Mining Companies will be taking up that particular situation to be in the oil and gas business. We were talking about protectionism, some comments from hsbc about the environment is very dependent on protectionism. How will more protectionism impact a company like bhp . The interesting thing is that protectionism actually helps commodities. The reason being we were back in the 1990s where the countries were essentially opening up their markets to trade. As such, then the people who were consuming commodities had much greater number of producers that they could ask for bids from in order to get commodities from. Now were in reversal of that particular trend, the antiglobalization, as it were. So the actual Pricing Power becomes with the producers, because theres less alternatives for the consumers to come to, so negotiations will be higher. Lets talk about china. Last year we did not see the hard landing, we did not see a china implosion, thats in part why iron ore and other Commodity Prices have rallied. This year were seeing profits in the industrial sector increasing again. Seeing the Property Market going into another cycle. We dont know where it will ewi up. I guess china is still determining the business model, its not trump or the u. S. , or western europe, its china, isnt it . It is china. It will always be china. As far as global usage, china is taking about 50 or more of virtually everything in terms of raw materials. That wont change in the nearterm. Regardless of what happens with trade, with things like new negotiations on various deals between the Trump Administration and others, well have some regional changes veavailabiliti concerned. What would your outlook be for bhp . Will be good. The actual earnings they earned in the iron ore section were based on a price average of 55. The actual price right now is 90. Theres still a lot of upside left as far as what we can expect in the next interim term for their situation. And we have other materials which have not rebounded as much but ought to things like nickel, names like rio tinto and glenco glencore, they will benefit. Paul, thank you. We will be speaking to andrew mckenzie, ceo of bhp billiton coming up. Stay tuned for that. The Michelin Guide awarded one of its coveted stars to a restaurant in france. But one restaurant was particularly surprised when she found out that her restaurant had been awarded the star. She employs one parttime cook to help her in her restaurant, where the set lunch menu costs just over 12 euros. The Michelin Guide it turns out got the wrong restaurant. The name is the same, though. The award was intended for a restaurant with the same name in another town over 100 miles away. Talk about windfall profits there. Exactly. She shouldnt have said anything. Just kept the star. Have people coming. People believe the food is good just based on that michelin star. Theres a lot of placebo effect going on there. How many times do you go somewhere where its a small place, nothing special, but the food is amazing. You think if this was served in a dark room with candles, a fancy name some of the fanciest names in the world are overhyped. Totally. Email the show, if you have experience with michelin stars or anything else you want to address, the address is streetsignseurope cnbc. Com. And you can find us on twitter, you can tweet me directly at carolincnbc or at louisabojesen. Higher profits and increased dividend from intercontinental hotels. Well hear from the companys ceo after this break. Hi everybody, good morning. Welcome back. Youre still watching street signs. Lets talk about stories coming out of asia. Toshiba is looking to raise at least a trillion yen. And they are looking to raise that from the sale of majority stake in its flash memory chip business. Pauline is in singapore with more on this. Pauline, good to see you. Good morning, good to see you, louisa. 1 trillion yen would be 8. 8 billion, its more than the 6. 3 billion writedown that toshiba has to take for its u. S. Nuclear banks. And creditor banks are pressuring toshiba to raise more money, because theyre afraid of more writedowns down the pipeline. Investors are not warming to this idea. Off the back of this news, Toshiba Corporation ending the session down 1. 4 . Its a different story with the nikkei as we saw the pulp and paper sector rallying today. Thats after a big Paper Company announced that its going to raise printing paper prices for the first time in two years. So we saw the paper and pulp sector up 3. 8 . The nikkei up 0. 7 . Look at what happened with hsbc after it reported its earnings. It ended down on the hang seng by 5 . Dragging down the hang seng three quarters of a percent. By now you know the story, fullyear earnings disappointed with pretax profit down 62 . Because of slowing growth in both hong kong and also in the uk. And that 1 billion Share Buyback didnt sit well with investors. It didnt alleviate them. We had one guest earlier today saying that was stingy. Thats what happened there in hong kong. And lets look at what happened on the kospi, which ended up 0. 9 . Even samsung was higher. Seemed like investors were saying the political turmoil and the samsung scandal may be behind them pretty soon. So we saw some positive sentiment there on the kospi. The asx 200 ending flat, just under the flat line because of disappointing earnings. Bhp billiton did end higher ahead of Earnings Release which ended up quite strong. Back to you. Thank you very much. Pushing on with earnings, intercontinental shares are higher after reporting profits slightly above expectations and announcing it will return 400 million to investors through a special dividend. The company said revenue per available room has risen by 1. 7 yearonyear in the three months to december. Earlier we spoke to the ceo of ihg and asked if he was concerned about the performance of his company in europe in light of last years terrorist attacks. Revenue was near 2 . If you took out the impact of france, turkey, some of those unfortunate incidents it would have been higher. So its a good, solid growth market. Quite a big market for us. Continental europe is about 10 of our business. Uk about 5 . Were looking at longterm growth in these markets they may not be as high growth as china, our Fastest Growing market, our second biggest market. But theyre important markets, theyre profitable. And what we try and do is focus on priority markets. Thats where we put our efforts in uk and germany, both very high priority for us. A new poll has manuel macron beating Marine Le Pen by 61. 5 of the poll. The poll has le pen winning the first round of the poll with 26 of the votes, but in the second round runoff, macron is seen winning with 61. 5 of the votes. T an investigation is looking into whether le pen an other Party Leaders used funds to pay Party Staffers instead of eu parliamentary assistance. The National Front said the probe was a media operation whose goal it is to disturb the course of the president ial campaign. We spoke to the ceo of pubcist and asked if he was concerned about the French Elections. Most investors are worried about brexit, trump, italy, and now about france. They like to be scared, and they are a bit scared. I dont believe that Marine Le Pen has the slightest chance to be elected. Now, who knows. The people of uk, u. S. , italy have made a lot of surprise decisions which is not the polls but at the end of the day the votes. Tell fon efonica agreed to p to 43 of its stake in telxius for 1. 3 billion. Now, u. S. Markets called to open just a little bit higher. All three major indices closed at record highs on friday. Closed yesterday for sell prayings of preside celebration of president s day. The implied open pointing to the upside. Tom liden, president of global transinvestments is with us. Good morning. Good morning. Great to have you with us. Great to be here. Basic question, first this run were seeing to the upside in u. S. Equities, for how long can it continue . How much elasticity is there in the trade . I know folks are not a big fan of trump but when you look at gdp in the u. S. , small and Midsized Companies run the majority of sales, production that goes on. If you ask the average Business Owner in the u. S. , theyre happy with whats going on. Maybe for the first time in a while theyll hire that next employee or put more money into their business where they have not felt as confident before. You can see the move in small to Midsized Companies where Large Companies, multinationals have been the leaders in the last three years. As we look at etfs, the flows are really starting to pick up. Theyre happy unless theyre importing. Yes. Where it could get tricky. Also we keep hearing wage growth. Wage growth will not follow this euphoria that were talking about now. Some degree already it has this last year compared to prior years. Thats really one of the big things. Employment numbers in the states look great. Wage growth is picking up. Were seeing inflationary numbers kick in as well. When we Start Talking about that, yes, banks are really looking good. So one of the big etfs we really like is the xlf, the state street spdr financials etf, where its mostly banks. And now in the last couple weeks a lot to of people are look at the fed, they may have another move in them in march. If that happens, again, banks should continue to take off. Tom, multibillion dollar question. What could derail this exuberance in the stock markets and in the overall economy . Is it a policy misstep by donald trump . To be honest, weve seen a lot of policy missteps from him. Would it be a policy mistake from the fed . Could be if rising rates too quickly start to hurt the overall growth. I think a couple things. First, a lot of promises are coming from the Trump Administration. Deregulation, lower taxes, if he doesnt step up and make those things happen quickly, there could be disappointment. Here in europe were hearing a lot about elections. Some disappointments in election for sure. They could surely affect the markets as well. I think overall, as we are here looking at markets hit alltime highs in the states, and, yes, granted, a lot of folks are looking at the u. S. , theyre disenchanted by whats going on with the Trump Administration, but Global Markets also like whats going on. So when you look at some of these global etfs, they continue to garner new assets, and now just today new record levels of 3. 7 trillion in etfs worldwide. Its something its a number to be reckoned with. You made the case for financials. What about the renewed case for small caps . Small caps have done well. Theyre not exposed as much to the strength of the u. S. Dollar, not exposed as much to protectionism. Should we see small caps continue to outperform . I would. The biggest russell 2000 etf is the idm traded here and in the states. Thats something to Pay Attention to but whats happened, a lot of people are highly correlated to large caps in the portfolio, make sure you have some small caps and mid caps in there as well as well continue to see growth in those areas. How much of an impact do you think european elections could have on the markets, in particular the french one . In the states as youre looking to see whats going on overseas, were looking at europe as well. The key is we have to separate the political environment and its very, very difficult. Right now, as you look at earnings worldwide, as you report today, there are a lot of companies that continue to impress. And from a realistic standpoint earnings expectations are very much in line. Valuations are in line in the u. S. And fairly inexpensive in europe. I would expect were going to see greater growth in europe, the big thing that u. S. Investors are concerned about is currency devaluation compared to the rising dollar. Some great etfs hedge against lower euro or lower yen when you