. good morning. welcome. you're watching "street signs." i'm louisa bojesen. >> i'm carolin roth. these are your headlines. >> it's a supermarket sweep. stocks in grocers after tesco posts solid first half results. >> mega alpha for dutch lloyd shareholders. >> sterling slides lower breaking against a psychological level after brexit spooks investors.

and vice presidential candidates trade blows in defense of their nominees. tax remains a key battleground. >> donald trump has built a business through hard times and good times. he brought an extraordinary business acumen, he employed tens of thousands of people. >> and paid few taxes and lost a billion dollars a year. good morning, everyone. let's kick off the show with data points. the eurozone september services pmi was forecast at 52.1. it came in at 52.2. just a tad higher than forecast. it is a slowdown from the august print which saw a number of 52.8. now, i do want to point out in italy we saw a fairly weak number. french services pmi at a 15-month high. quite a big contradiction here. german services pmi is near the

stagnation level of 50.9. also looking at the eurozone august composite pmi, forecast at 52.6. the number is 52.6. bang in line with expectations. no major moves here when it comes to euro/dollar on the back of these data points but also around the taper talk. >> i'm not sure how many people care about the data points at the moment versus what's going on within the ecb, what's going on with the fed and we heard -- we had this report making the rounds that the ecb could be looking to withdraw their $80 billion bond drawing program before the end of quantitative easing. a citi analyst put out a note saying the hawkishness is a surprise. the extension of quantitative easing more of a likely outcome. looking at the european markets, lower across the board this

morning in trade. down 0.7%. you'll see that reflected in the main european equity markets with these trading lower. when it comes to the sectors, some repositioning going on with a lot of people coming out of gold. the biggest drop since september of 2013. but we have had had a huge run up in the price of gold, now with this dollar strength story we're just reversing that at the moment. quite some moves. >> quite some moves also in grocers. tesco is one stock we want to talk about. tesco shares have skyrocketed after britain's largest retailer posted a 60% jump in first half profits. they also launched a plan to almost double its operating margin within three years by cutting costs in its distribution network. tesco has warned its pension deficit swelled from 2.6 billion

ponds earlier this year to 6 billion currently due to sinking bond yields. let's talk before this with a senior research analyst. phillip, on the one hand they're up grading the mar kin target, on the other hand they're talking about a difficult, challenging environment. there seems to be a disconnect in the language. >> the big four, have been really affected by the rise of the discounter. so aldi and lidl have grown exponentially. at the moment we're seeing that. so tesco struggled in terms of making value growth. the interesting thing about these results, the first time since 2013, they delivered value growth which was pleasing for shareholders. >> do you think tesco or the industry at large is at an inflection point where the four big grocers can contain the rise of aldi and lidl, the

discounters? >> i would say yes, but since brexit, it is thought brexit will be better for the discounters. though the results are positive for the first year for tesco, i think there will be more tougher battles ahead with the discounters. the price war continues. we saw results that 6% average shop -- the average shop of tesco is 6% cheaper than two years ago. show have a lot to do with margins again. >> can i just be the skeptic? the stock is up by 7% or thereabouts. you have an operating profit, which, yes, it was better than anticipated by still a 28% drop we're seeing, so it's come down a lot. at the same time you mentioned prices more than 6% lower than two years ago. and also adding to that the pension deficit story of 2.6

billion pounds earlier this year as opposed to the 6 billion we're seeing now because of bond yields coming down. how can people be buying it up to the tune of 7%? >> there's a lot of challenges ahead. they have the national living wageing i shortly. the pension deficit, the volatility in the pound at the moment. it's a good start, but in terms of long-term investments, something you need to think about carefully. >> the pension deficit story this is something that's not just concerning tesco, it's concerning all of the larger retailers? >> yes. it's a problem for the uk in general, the pension deficit. i think what tesco is looking to do now is maybe again look at international scene. that's something they've been trying to pull away from, having left south korea and turkey. now i think they'll concentrate on core markets, central europe, poland and czech republic and in

asia and thailand and malaysia, see whether they can diversify risks from brachial plex s fros things. tesco is the leader of online marketing, followed by sainsbury with 6%. amazon fresh is the new kid. to what degree will amazon eat into the market? >> i think amazon fresh is a drop in the ocean. the online grocery market is incredibly competitive. you have tesco and sainsbury, andicardo which posted a first half profit last year. amazon's play the next 12, 18 month is making sure the service is as good as it can be. so the margins will come on later. >> phillip, thank you very much for your time.

appreciate it. phillip benton, senior research analyst. bringing you news surrounding the ecb. it has decided to maintain the eligibility of unsecured bank bonds but it has decided to reduce as of the 1st of january of 2017 the usage limit for uncovered bank bonds from 5% to 2.5% for collateral eligibility. in corporate news, the french watchdog has blocked altice's share buyout for sfr, so far citing no reason. they told reuterses the ruling was incomprehensible and goes against the interest of both countries. the media group was hoping to streamline share structure through the deal. an explanation is due to be published later today. dutch insurer nn group made a $2.7 offer for delta lloyd.

nn said it offers 5 euros and 30 cents per share for the firm. nn group says it has repeatedly sought contact with delta lloyd's board but has been rebuffed. the company will update on the progress of the deal within four weeks. asahi is planning to offer 500 billion yen for sabmiller's businesses in the czech republic, poland, hungry, slovakia and romania. as biing for sabmiller's eastern european assets will happen next week. four bidders are battling for unicredit's asset manager pioneer. amund ish

amundi and another a seen as the front-runners as they move to the second round of bidding. aberdeen asset management are also in the race for the unit. all of the companies declined to comment on the reports. shares in abilene air berli opening higher after talks of selling its touristic business. air berlin last week announced plans to cut over 1,000 jobs and halve its fleet. an indian air carrier is also looking to offer passengers the option to sit in a child-free zone. online there's a big debate whether or not is it discrimination against kids in general, people who have kids, or is it your right? >> i think it's a good idea. unless you sound proof the

section where kids sit in, it's not going to make a difference. if a child screams in first class or all the way in the back, you'll hear it all the way in the front. >> i make the mistake, if you're working on a flight, do you play with the kids around you? then you need those hours, then they won't leave you alone. >> that's true. i'm sure that's -- >> my baby never cries on a plane. >> exactly. e-mail the show, get in touch, streetsignseurope address cnbc. >> to taper or not to taper. uncertainty is making investors nervous. stay tuned as we discuss the ecb's next moves. guess what guys, i switched to sprint. sprint? i'm hearing good things about the network. all the networks are great now. we're talking within a 1% difference

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welcome back. you're watching "street signs." we need to get you an update on markets in asia. sri is in singapore. >> let's look at these markets. we are stumbling along here towards the close of the trading day here in the asia region amid fears that the central banks, whether it's in the european context or u.s. context may be closer to normalization, tapering, et cetera than previously anticipated. that is giving jitters to some corners of the market here. even if we do see a move, i think asian sovereigns and the markets and assets are much better placed to absorb that higher rates environment. though the prism that we should be watching is the currency markets. we saw this move higher in the

u.s. dollar. the yen was weaker. that afforded some help before the nikkei 225 and some support from a weaker yen. we were up at the close by about 84 points. gold miners got hammered, because of the stronger dollar, three-month low. that was a drag on the australian benchmark. the other factor was oil. we are hovering above 50, $51 a barrel basis brent. that's constructive for the energy sector. but i hasten to add in a macro point of view, it looks as if -- it's a big if, but it looks as if we're finding a flaw around the current levels. if they are sustained that only has inflationary expectations, implications, but also implications for central bank policy over here in emerging market context. that's where we stand. become to you. >> sri, thank you very much.

wti crude, as he has just been talking about and brent hanging on to these gains. spot gold, 1,272. when you look back from december, we've gone to 1,000, then the region of 1,375 in july, now leveling off. a lot has to do with the dollar repositioning and on speculation about what will be next for the fed. majority still anticipating looking at a move in rates come december. we've also heard a lot of fed talk indicating that. jeffrey lacquer talking about how borrowing costs may need to rise to keep inflation under control. that hike before the end of the year could be likely. spot silver also just a bit higher. let's look and see what's going on in the fx markets. euro/dollar, 1.12, and the

pound, 1.2335. we have all this talk about theresa may. they have two years both to fulfill a divorce and at the same time to negotiate the trades deals which is not a lot of time. many people saying it might have been beneficial to have done a preliminary negotiation first when it comes to the trade deals before deciding to trigger article 50. bonds, let's glance at the bond market. yields once again heading higher. somewhere in the region of two-week highs when looking at the german yield. when looking at the u.s. ten-year, 169.20. the german yield just pulling back a bit with -- just rising a bit with the actual bond just pulling back.

>> chicago fed president charles evans says the fomc is likely to raise rates before the end of 2016. speaking in new zealand he said i would be fine with increasing the funds rate once before the end of the year. he said it would likely be in december but could be earlier. the euro strengthened against the u.s. dollar on the back of the reports that the ecb is considering tapering its qe ram. the ecb said the governing council had not discussed the topic stated in a latest report suggesting that the bank could wind back its asset program by 10 billion euros a month. thomas, do you think this was clearly a bogus report? the consensus is for the ecb to extend qe, not dial it back. >> i think there's not really much in that report. the way we see it is that ecb will extend. there will be a discussion about

tapering coming up, but it's too early. it's very early days. even that report suggests it could extend. our call is that in december it will extend because you have all the political uncertainty coming up in europe and you also have, we think, still core inflation low in europe. >> under whatul they taper? is it if inflation hits the target or if economic growth shoots up? >> would be a combination of growth and inflation. we need to be aware of the increasing criticism of negative rates, qe, which also may weigh on the thinking. but the key thing is that they need to be confident about inflation being on a clear upward pra jetrajectory, and it going up now, a lot of that is the base effect from energy prices. underlying inflationary prices are not there because of the slackness in the labor market. >> thomas, when looking at the

level of the euro dollar, how much higher can the dollar be pushed heading into this fed rate decision? >> our goal is that ecb will extend and fed will do nothing in december. i see euro/dollar in a range between 110, 114. if we see a bit of u.s. data, which you could right now, we are in for that period now that could drive euro/dollar lower. i would be surprised to see a big move. even if the fed goes in december, it will be a dovish hike, and they will go very, very slow next year. >> thomas, stay with us for a second. want to mention cnbc spoke to the imf chief economist and asked about the weaker forecast for wker growth. >> monetary policy can't be the only game in town. while there's certainly room for further monetary actions to support inflation targets, we

are seeing side effects in terms of bank profitability, pension funds, insurance companies. so i think world leaders may be coming to more of a realization that monetary policy needs some support from fiscal. we've seen this approach in canada. we've seen korea taking it, japan has introduced a fiscal package, and postponed its consumption tax. it's important that countries do worry about how they will maintain fiscal solvency going forward. it's not enough to expand. you need a medium term framework to ensure a sound public balance sheet. >> we hear a lot of people speaking like this at the moment. what do you think is at the center for the fed if it were to not hike in december? you say you're not anticipating

a hike. so you stand outside market consensus. >> yeah, it is simply the cycle in our view is not strong. economic data -- we may have had a bit of data, but all -- we don't think the cycle is strong. we don't see a lot of signs of ineasing inflationary pressures in the u.s., and janet yellen said they would like to see a bit of inflationary data, so in our view they're not in a hurry to raise interest rates. >> let's talk about sterling hitting a low against the u.s. dollar yesterday. just off the lows now. in a couple minutes time we will get more numbers from the uk, do you think we're squarely focused on the process of a hard brexit? if you look at the next six months, sterling will go down

further, whether it's against the dollar or euro, because you have so much political uncertainty coming up with the uk and concerns about a hard brexit. that being said we have seen a sharp move. i think on the short-term we could see pull back here. a bit of sterling strength. under. i will it has to weaken further because the political uncertainty is enormous here. >> it is enormous. looking at a tweet coming through that says some believe the brexit would benefit the british economy. could it in the en, do you think? might we be overreacting to the implications of this weaker pound, especially when looking at some of the longer-term ramifications as well? >> it's very difficult to say something i really think about the longer term. it depends on which deal they get. we have to see that. but i do think for markets as such now, that's where the

interest rate markets in the uk, it is about that, these negotiations going to be tough. it seems to us that the uk prime minister is willing to, you can say, give up a bit of that access to single market because she wants to control immigration or at least have some say. the market doesn't like that, because they feel that will weaken the uk economy at least on the short-term. longer term i find it difficult to say what will happen. >> thomas, just put on your commodities hat for a moment the want to talk to you about gold. gold bouncing back after yesterday's 3% fall, the biggest daily decline in three years. talk of ecb taper, dollar strength. is there no room for gold in anyone's portfolio? >> i don't think there is. you have the concerns about fed, when the fed will raise the interest rate, you have the concerns about tapering, you have it in europe, in japan in this environment no matter what kind of core you have on a

three-month horizon, i think it's difficult for gold to rise. that will stay strategically -- that will be the bias in the markets for the next one to two months. >> thomas, appreciate the time. earnings season is creeping up on us once again. this time it will face stiff competition from the itself election to grab investors attention, after a disappointing period there's optimism that the third quarter could signal the start of a top line turnaround as bob pisani explains. >> the earnings recession may be about to end. here's why. on the surface news continues to be gloomy. third quarter earnings are set to decline 0.5% compared to a year ago. this would be the fifth consecutive quarter of earnings decline for the s&p 500, the worst showing since 2007 to 2009. but there's a chance this will change.

that's because revenue growth is turning positive. the top line growth is the key to earnings growth. revenue growth is broad based for the third quarter. 9 of the 11 sectors are expecting growth. there's notable gains from some big sectors, consumer discretionary, retail and home billers, healthcare and technology. technology is the key. several sectors are strong, technology is the best one. that's because all the companies that make semiconductors, broadcom, intel, they're all the beneficiaries for new memory chips, phones, virtual reality devices and chips that use less energy and drain on batteries. then there's a whole cloud technology and the need to store more data. all of this requires bigger, better and faster chips. it's not just technology with stronger gains, strong healthcare sectors will also do women. pharmaceuticals like bristol-myers and aetna and cigna are reporting strong

revenue gains what about energy? that's the problem. oil and gas companies are the biggest drag on earnings and revenues, but with oil closer to $50, even oil companies may have a much better fourth quarter than many anticipate. i'm bob pisani. we need to take a short break, while there, head to our blog, you can find us on twitter as well. >> @carolincnbc. >> and @louisabojesen. see you in a second.

welcome, you're watching "street signs." i'm carolin roth. >> i'm louisa bojesen. your headlines. >> it's a supermarket sweep. stocks s is in grocers surge a

pes tesco posts solid first half results. >> sterling slides lower breaking against a psychological level after brexit spooks investors. and vice presidential candidates trade blows in defense of their nominees. tax remains a key battleground. >> donald trump has built a business through hard times and good times. he brought an extraordinary business acumen, he employed tens of thousands of people. >> and paid few taxes and lost a billion dollars a year. >> google makes a big bet on hardware hoping to win market share on the smartphone and virtual reality space. hi everybody. welcome. you are still watching "street signs" here on cnbc. we've been covering the data for you this morning. much of it still indicating that europe is looking at growth. we're currently just glancing at the market data on the uk

september services pmi, 52.6. that is versus an all reading of 52.9. pretty much where august was, a bit above the reuters poll looking at 52 even. the prices rises as well, 52.8. the highest since january of 2014. and the pmi data subjecting there is a growth rate of 0.8 after an initial brexit shock. so the bank of england rate cut prospects being questioned ever again. you're saying there's another flash out as well? swiss aig? we have some other news also hitting the wires.

that the swiss attorney general is saying they expect a ponzi scheme fraud was committed to con seem an inappropriate or inappropriations from the src fund and 1mdb. they are talking about the attorney general and revealed that substantial amounts were mis misappropriated. >> yesterday we saw u.s. stocks down for the fourrth time. the dow jones seen to add 9.5 points. utilities, telecom and real estate fell 1.5% to 2%. there was plenty of talk about fed hikes, today all eyes on the ism nonmanufacturing report after that shockingly bad number

in august. we'll see whether we see improvement in september and the adp report. want to show you what's going on in the european trading session. we are lower, breaking a six-day winning street. taper talk from the ecb is spooking investors, even though that was denied. the cac 40 off 0.65. supermarkets doing well in the uk. tesco up by almost 8% on raising its margin target and better numbers. that's lifting the sector. in terms of the commodity space, we saw brent crude up by 1.5%. wti up by a similar percentage. all eyes on gold. it's bouncing back after yesterday's 3% fall. we saw similar numbers for spot

silver, talk of ecb tapering and the spot dollar. yesterday gold saw the biggest drop in three years, now trading at three-month lows, well below the 1300 level. diane james has resigned after 18 days in charge. in a letter james said she has not enjoyed the full support of her colleagues and doesn't have enough authority to lead the authority. remember that they have not appointed a deputy either, so there's basically nobody running ukip. there's speculation about whether nigel farage could come back for a fourth term. she was elected n but only in that position for 18 days and is stepping down. >> i heard her speak on the radio this morning, bytes of that, she said, sorry, you'll have to find a new leader once again. not very apologetic. >> no. they'll find a new leader, but

they don't have anyone running ukip. >> the uk brexit secretary said the government was going to negotiate one single deal to leave the european union. he also ruled out a special deal for the city of london. britain's defense secretary told cnbc the cabinet was now united in trying to make brexit work. this is a united cabinet. the people have spoken. we had the referendum. there are not three brexiteers, we are all brexiteer s. >> we had all these people speaking, theresa may talking, and today look at the press. you have all of this press in the uk papers about how firms have to list foreign workers.

it's getting quite a bit of attention. companies will be forced to reveal how many foreign workers they have to shame bosses who fail tobritish staff. if companies are forced to reveal how many foreign workers they have, and have to put in place to hire british workers first what does that say about britain being open for business? >> doesn't really. >> no, it doesn't. >> switzerland wants to go down the same avenue. canada going down the same avenue. >> i interesting, you have not so great financial times, britain dropping below france in ranks of economic power. and you have the daily telegraph talking about how it's wrong to sneer about patriotism, quoting may, saying they're trying to appeal to the common voterment. >> shouldn't the jobs go to the people who are best equipped for

the job, not those who have the best nationality? >> you would think so. but also in the longer term you do want growth. you need people to grow. >> exactly. during an exclusive interview with cnbc, the ceo of ashton martin, andy palmer, said he hopes free access to the market for the uk will continue after brexit. >> every manufacturer will say we dislike instability and uncertainty. that said, before brexit we were the only car company that took a neutral view on brexit, partly because we straw polled our employees, 72% said they wanted to leave it would have been arrogant of the ceo to say remain. we did contingency plan. we said we expect the pound to weaken. we will take some of that windfall, invest that in marketing in the united states. the good mus for us is that the

pound did fall, weaker doesn't equal bad. we invested that money in markets in the u.s., we've seen good success of that but nothing negative in the uk and europe. in consequence, weak pound, similar sales, extra profit. >> would you encourage the government to secure single market access? >> the only thing we would request is tariff-free access. i'm not a politician, it's not for me to say whether that's done through a trade agreement or through the single market. but tariff-free makes sense. and to be frank there is no other choice. when you look at the cars manufactured in europe for europe, 20% of them are sold in the uk. putting tariffs in place, the french government or the german government, all it does is damage their own manufacturers. it makes no sense. hopefully when you gather sensible people around the table, we can get to what is the

only sensible solution, which is zero tariff. >> now, tensions ran high at the u.s. vice presidential debate as the republican nominee, mike pence and democratic rival, tim kaine attacked each other's candidates and repeatedly interrupted one another on issues of immigration, race relations and international security. tim kaine repeatedly brought up the presidential candidate's miss steps. >> did donald trump apoll jogiz for taking after somebody in a twitter war and making fun of her weight? did he apologize for saying president obama was not even a citizen of the united states? you will look in vain to see donald trump ever taking responsibility for anybody and apologizing. >> mike pence criticized hillary clinton's comments about trump supporters. >> if trump had said all the things you said he said and the way you said he said them, he still wouldn't have a fraction of the insults that hillary

clinton leveled when she said that half of our supporters were a basket of deplorables. she said they were irredeemable, not america. this insult-driven campaign, he's small potatoes compared to hillary clinton calling half of trump supporters a basket of deflooribd deplorabl deplorables. let's get out to tracie potts. we thought those were the nice guys. >> they certainly know how to debate. here was a debate where it wasn't clear how many people would tune in. how much they would get to some of the more substantive issues. but was we ended up with was a lot of overtalk. you didn't hear it in some of those sound bites, fortunately you were able to select some of the selections where we could hear what they were saying. there was one point where the moderator said, guys, we need

you to not talk at the same time because people at home really can't understand what you're saying. that was probably the one big takeaway from this debate. there was a lot of back and forth and sometimes you couldn't hear what was going on. when we could, there was a lot of substantive december cushiis then it was cut off to move to the next segment. the top twitter moment was the talk over russia and vladimir putin and tim kaine arguing that donald trump and his running mate are friends of russia and can't be tough when it comes to dealing with russia. on the other end, the hillary clinton e-mails came up. it's something that mike pence said going in he wanted to talk about hillary clinton, her record, and some of the issues on the campaign trail. the e-mails came up. he brought it up in a personal way, both of these nominees have sons in the marines. he said our sons would have been court-martialed if they would have done something or handled

e-mails or sensitive information the way she did. it was the first and only debate, it was one that was memorable. the question is how memorable for voters. >> thank you very much. tracie potts joining us live from washington. tony fratz is a founding play of hamilton play strategies. good morning. good to have you with us. what did you take away from the vice presidential debates? >> i think tracie hit it. a lot of interruptions and cross talk made it difficult for people to watch. when i think of the vice presidential candidates, i think they kind of have two jobs. one is to just be credible enough that voters don't think of them as not able to do the job as vice president. so they don't do any damage to the top of the ticket. i didn't think either of these guys really did that, despite the nature of the debate, and the charges against each other.

i think they were fine on that. the second job they have is to actually help the candidate and try to improve his chances. that's hard for them to do. i don't think either did a great job on that last night. i don't think they lost ground, but they didn't prove anything. i don't think any voter who watched last night came in and changed their mind by the end of the night. >> is it your impression that people in general know these candidates? or does it matter given the attention that is on the -- that the presidential nominees? >> i think people ought to get to know them a bit. someone mentioned last night this might be the least known vice presidential candidates going back a few decades. neither of them are well known at all. it was important for them to introduce themselves to voters. you know, you want to see them introduce themselves in a likable way. i think maybe at the conventions

they did a bit of that. last night was a chance for them to perform on some tougher issues. i don't think they close the deal on that because of the nature of the debate. i don't know how to do these debates better where you get these guys to stop talking over each other. it's not just the vice presidential debate. we saw it during the primaries. it's like they don't know it's hard for viewers at home to vol low along and get something worth while out of it. >> let's move away from the vice presidential debate. let's look ahead to the next presidential debate. because i think we all agree that yesterday really didn't move the needle in any way. how can the candidates change the debate from tax records to the clinton campaign to e-mails, away from that to what really matters? >> you know, it's funny because clearly secretary clinton's strategy is to get under donald

trump's skin with some of these attacks. she was able to do that during the first debate. you have to wonder why she would change that tactic going into the next two debates knowing it worked so well. until he stops responding to her attacks and taking the bait, even going further, it's hard to argue with her tactics. i think the tax argument, i think, particularly cut pretty dramatically this week for trump. he's going to have to answer for it. i think we are going to see that again. maybe the next format is more of a town hall style format. we'll have questions from audience. maybe it will be more difficult for candidates to go off into attacks rather than being responsive to people in the audience. >> after donald trump's poor showing in the last debate, how different do you think will his debate prep be for theext one

on sunday? >> he famously didn't prepare at all for the last debate. i suspect they're doing more debate prep this time with an opponent and thinking about the charges and practicing how to respond to them. we'll see how well he does. i think it wouldn't be the first time we saw a candidate not perform well in a first debate and come back and perform well in a second debate. we've seen that happen with george w. bush, barack obama did the same thing. it's possible to do that we'll see whether it's possible for trump to do that because he doesn't seem to be the kind of candidate who takes advice from his staff very well. >> tony, you worked in the treasury, u.s. treasury at one point. you also worked under the bush administration as well. if one is a republican in the u.s., and you don't feel that

you think that trump is the best candidate to not only represent the republican party but also recent the u.s., what do you do? what do you do in this election? >> it's a tough call. i think -- my personal situation, just to be very explicit about it, i'm not a supporter of donald trump. i vote in washington, d.c., district of columbia where secretary clinton will win, it won't be a close race. i can choose not to vote or vote for a write-in candidate and have my conscious clear on that and to the have to -- the outcome won't be effected by my vote. other candidates in battleground states, or other republicans in battle ground states have a more difficult choice. other people are look at gary johnson, the libertarian candidate. some are making the decision to

vote for secretary clinton even though they have strong disagreements with her both on her conduct and on certain policies. but the idea of trump as president has been so distasteful that they feel like they have to make that choice. >> tony, thank you very much. still coming up on the show, google goes gadget crazy as it unveils a wrath of shiny new products. we'll sift through their latest offerings. don't go away.

twitter is reportedly ready to field bids this week according to the "wall street journal." sales force.com is the clearest suit suitor. alphabet's google and walt disney may be considering bids with the deal seen in the range of 18 billion to $30 billion. twitter shares have risen over 25% since reports of a sale surfaced last month. yahoo! has scanned e-mails for the u.s. government, a fresh report claims. according to reuters, the company built special software last year to comply with a classified request from the nsa or the fbi. former yahoo! employees say hundreds of mail accounts were being scanned, but it's not

known what phrases were being searched for. the yahoo! group said it is a law abiding company and complies with the laws of the united states. google has made a push into hardware launching a range of devices for the home and a new pixel smartphone. joining us now to discuss are ian fox, and arjun kharpal. can google make a dent in the market? >> they have to have a good strategy and the right price. they set a high price with the smartphones, the same price points as apple and samsung. >> doesn't go against the grain of partnership. >> when google moved into mobile eight, nine years ago with android it was a collaborative approach, open. they worked with many companies. the previous smartphones also

co-branded with samsung, with others. now they're going it alone. only google brand. this will create friction with the rest of the industry. >> you have been looking at this, arjun. had you told me ten years ago that google would be making speakers, i would have thought you were crazy. this is a play for google. it's -- hardware is a part of that. though spent a lot of time talking about google assistant, their ai capabilities, this is spending that around and getting into as many hands as possible. if they can bring out the best profiles this will help their advertising business in the end. >> why do they need to do it? they are the number one search engine, doing other things, hence the alphabet grouping, they could be going into the car market. is this just to get a one-up on competitors or other big companies like amazon from doing a similar thing? is it that they really want to

push this part of the business? >> it's forward thinking. right now we go to google.com, we search, type on our phones. but what does search look like in the future? we don't know. maybe google has an idea. at the least they want to be at the forefront of what the future holds for search and their advertising business. >> google wants to be a leader in artificial intelligence. when you look at google home, it's eerily similar to amazon's echo. >> google knows they need to have hardware out there. if they rely on partners, there is risk that partners may work with someone else. by making their own hardware, they can make sure only google software is front and center on the device. >> do you agree with that? >> i wanted to ask a quick question to ian.

the $649 price tag on the pixel phone, which it starts at, is that too high for a new device on the market? >> it's very ambitious to do that. if its strategy is to push google assistant, it's ai, across all products, more affordable smartphones would make that easier. over the years they partnered and shipped just 4.4 million smartphones to the market at much lower price points. apple shipped 145 million iphone 6s. so they have a massive hill to climb. they're not known as a brand making smartphones. they have not sold that many smartphones in the price, and they're setting a top price that only apple and samsung price their phones at. everyone else has lower prices for their smartphones, even at the premium end of the market. >> ian, thank you very much.

also want to thank arjun kharpal, our technology reporter. let's get you caught up on the latest news regarding the malaysian sovereign wealth fund. the swiss attorney general is requesting assistance from malaysia into connection to a criminal probe into misappropriation of funds. four people and one bank is being investigated. the sum seems to be have been misproep wrappropriated from re and was possibly concealed in a ponzi scheme. in the european markets, we are mixed today. the ftse 100 off by a third of a percent. even though tesco is outperforming after raising its margin target. the xetra dax is off by 0.65%.

>> lots of you writing in today. barry writes in, talks about how uk manufacturers will be cheering on the prime minister for her comments collapsing sterling. will their joy be dimmed when they discover the prices they'll have to pay for raw materials in the future all set against the weakening global economy. back to the point of the drive in sterling and lower. bill, jeff, linda, keep your ma mail and tweets coming through the u.s. futures, let's leave with you a glance there. we'll see you tomorrow, same time, same place. >> i'll louisa bojesen. >> i'm carolin roth. bye-bye.

. good morning. the number two vice presidential candida candidates tim kaine and mike pence square off in what call a measure d debate. and twitter sale. the company set to field offers this week. su suitors and speculation straight ahead. >> win and move on, lose and go home. the american league wild card game goes to extra innings. we'll bring you the late night thrilling finish. it's wednesday, october 5, 2016. "worldwide exchange" begins right now. ♪