good morning, everybody. you're now watching "street signs." i'm louisa bojesen. >> and i'm caroline roth. >> phillips is confident about future projects. from expanding top line to overhead cost, to making our manufacturing footprint more effective. syngenta says chemchina did

not offer any bids in the suisse/ag giant. and at&t launches ather bid into buying time warner. we'll speak to the ceo about the deal. good morning, everyone. we'll kick things off with micro economic data. the flash came in easily beating expectations. the september number was 52.6. so once again, that is an improvement. and this is after we saw french manufacturing rebound in the month of october, but services growing a little bit more slowly. the german private sector growth

hitting the highest level in 2016 in the month of october. euro dollar not seeing too much of an impact. it is fairly unchanged on the day at 1.0886. we are just an hour into the trade. the european markets were a little higher there. we were called up a few points this morning. remember, we have a whole bunch of data out this week. the u.s. gdp data, the consumer price information may be interesting. and next week the bank of england, too. the european equity markets are nearing the trend of positive territory. most of them are up near half a percent to 1%. where we are seeing a majority of the buying taking place is bank resources up by just shy of 2% in chemicals. >> can i just interject here, the stocks banking sector is up

1.3%. we are now back to the pre-brexit levels and down 17% year to date, but the u.s. rising yields are very good for banks, but back to pre-brexit level. not too bad. >> not too bad at all. draghi didn't hint at all about tapering. last week was the ecb presser. another thing holding markets up as well are the company cash levels and the cash being spent at the moment. we are seeing quite a few deals out there. the big one today, of course, being at&t taking over time warner, that was announced a couple days ago. the proposed price was $85.4 billion. it still needs to go through. we'll talk about this in a second, but just to show you the other european media and cable companies in the frey as well. many of them trading a little

bit higher. not a huge reaction. >> we'll give you detail on the deal. at&t agreed to buy time warner for just over $85 billion in the biggest global deal of 2016. the u.s. telecom giant will finance the deal paying $1.70 per share. they aim to complete the deal by tend of 2017, but it is an uphill battle with many voicing their concerns. donald trump plans to block the deal if he wins the election on, quote, too much concentration of power in the hands of too few, enquote. in order to bypass the deal, at t at&t would be open to certain spinoffs. >> the rational for this deal is

against chord cutting, are the companies immune to it? >> well, the delivery platform all in the same package, we are seeing that all over the world, in europe and in the states as well. this started in august with talks between the two companies it seems about time warner content going on at&t's platforms and it ballooned from there. it is all about vertical integration. >> how do we know this is not another aol nightmare? time warmer has been down this path before. and deb dukes has done a lot of work trying to undo the damage that the aol deal did. >> sure. look, time warner has been through a lot. in order for them to go ahead with the deal, they have to be pretty confident. >> with which seemingly they are, but listening to both sides

here in the presidential run-up to the election, it sounds like it might be very difficult to push through with the regulators. >> and i've already got the sound bites coming out. so i think there's a tv station in atlanta perhaps if they sell that, then the fcc might not be formally involved in a potential review. so here you've got the department of justice on the anti-trust side and the federal communications commission on the communications side. they both really took a really good strong, hard look at comcast nbc universal. this deal is in the shadow of that a couple years ago. if they take a close look at the deal, there were some fines later on for them not going ahead, not applying the remedies properly. that was demanded in them. but politicians are having a real go at this. they will probably have to do that through the fcc. the fcc is under an informal

capacity into the doj that could help. and sound bites obviously like vertical integration is a big sound bite between the two companies. >> what do you make about the price? the aol time warner deal is $160 billion. a lot of people are saying there are no similarities because aol was sold value to the tech bubble. and we are not seeing a similar environment. >> well, time warmer leads to this deal, so obviously they have a price that they think is fair. obviously, there's a lot of anti-trust risk here. so we've got breakthroughs involved, it's going to take a while to get through. perhaps that's in the price of it as well. >> do you think there's a chance that a counter offer is involved. because 20th century fox made the huge $70 billion deal for time warner two years ago rejected by jeff dukes. is there a chance they might come back or even apple? >> well, there was talk about

apple but i think over the weekend apple tried to downplay that decision to the media. obviously 21st century fox is always in the play because you never know what they are going to do. but these two companies have really tried to get the ball rolling very quickly. i think, with it, since it got leaked with the announcement over the weekend. about 24 hours after it got leaked. part of that is to try to get the ball rolling and to try to ward off any more consolidation. >> we have seen so much consolidation in the space by verizon, at&t teaming with directv, dreamworks and verizon buying part of yahoo!. at what point will it be concentrated enough? >> that's why this deal is so important. so what you have seen is the rise of netflix and amazon. creating their own content as

well, that is putting pressure on these companies a little bit, too. obviously, yeah, with those types the of players, they would be in the eyes of other sort of providers like at&t, that's the big question. but the secene is changing. >> we talk about the size of the deal and how it might be hard to push through. but it is not a horizontal deal. there are examples in the past where you can see deals push through because they don't overlap. >> well, that's what we saw figuratively with comcast and nbc. what they were, what you have, though, is a lot of behavioral remedies. so in horizontal mergers with a competitor taking out a peer, you'll see a lot of investments. in this, you're controlling the content that should be going to or could be going to other

providers. so you might see the doj impose what i call behavioral remedies, perhaps, or the fcc, trying to allow certain time warner content to go to at&t competitors. >> comcast is owning cnbc, just to add that. alex, thank you very much. alex, assistant editor at deal reporter europe. >> and tune in later to "squawk box" to hear from the ceos of both at&t and time warner. don't want to miss it. louisa, are you a chord cutter or a chord never? do you have a cable subscription? >> no. >> you're a chord never there. >> well, what are you? >> i'm a chord cutter. >> i watch most of it online. shares of syngenta are trading lower after chemochina has not offered more after the

trade deal. this offers concerns over the largest foreign investment by a chinese company. in a statement to cnbc, syngenta said constructive discussions with the eu are ongoing. third quarter sales rose by 1% in the quarter thanks to higher sales at the health care technology agency for philips. they say they expect further earnings improvement during the fourth quarter. we spoke to the philips ceo earlier about how the company's cost-cutting saving measures are taking effect. >> we have a whole arsenal of improvement measures from expanding the top line to reducing overhead cost to indeed making our manufacturing footprint more effective. we have over 50 factories, so it is not so much moving manufacturing to other regions

as consolidated a few manufacturing sites so tt onene. we are an innovation company. innovation is what drives customer demand. and i think that is where you really should put the emphasis. >> let me ask you about the geographies because the movement in sales is bailing anything registering. if you look at western europe, north america and otherographi s geographies, there's not much you can say about the geographies you're facing. >> well, maybe we should tackle europe first because there's heightened volatility and indeed our order growth and revenue growth is not as strong. but we had absolutely fabulous growth in china and in the other emerging geography such as southeast asia, double-digit orders, double-digit growth, but

also the united states. the united states has performed very well for us with more than a mid-single digit intake growth and revenue growth. so overall, i think philips shows a balanced picture across the world. and let's not forget that europe is less than 25% of our revenue. >> this is a business that you failed to sell as regulators step in. we have heard that apollo could be interested, nobody else has been quitcited. so what is the process? is there more than one company interested? >> well, let me say, we are looking at a strong third quarter performance. we saw a magnificent profit increase. and, in fact, it was the best quarter for the luminescence

division. we are looking for a buyer. there are discussions going on. so we just need to be a little patient to see what is the outcome of that. let's have a quick look at philips shares up by a whopping 4.5%. we'll talk more about the sectors that are lacking here with earnings season. we have rob mccareerry joining us around the desk. some say the earnings session may have already ended in the third quarter. what are you expecting for europe? >> i think much of the same. the reality is better than we thought it would be for the u.s. all the talk was about the u.s. and europe needed the positive speak from the u.s. so generally speaking, the outlook is pretty decent. i don't think too much is being priced into the shares. too much is being priced into the market. >> well, let's talk about the

banks. because the banks really stole the spotlight in terms of the rebound in some of the bond trading post-brexit. as i just talked to louisa this morning, we have seen european banks trade back at pre-brexit levels. but you say you can't find any banks to buy. was that a little premature, maybe? >> no, we did have banks to buy a few weeks back. and they were -- thereas that moment where they were cheap. >> so you participated in the round. >> yep. with unicredit at the time, which is the only one we really could find, so you take your chances on stops like that, but we did find something. but i think they were never cheap. and what they have done is rallied along with u.s. banks. and the question is always, is that warranted? but there's a risk they would. and that is why we decided to participate. now i think the problem, and i mentioned this this morning, now we go into the results subpoena this week from the banks with five of them to report. i mentioned that, in fact, we

see considerable risk and very little return. >> speaking of the european markets, we do hear quite a few of our guests say that europe might just outperform in a short to medium term over the u.s. because we have greater ways to go. we had a guest on jpmorgan on talking about the market to see seven consecutive market outflows since january of this year, and that year to date the performance of most european indexes is negative still. and that a lot of it has to do with the political headwinds. do you think there's repositioning based on political uncertainty in the elections coming up across the eurozone that could be quite detrimental? >> i think they could. i don't think people have yet focused on that. i'm not completely sure why there is the outflows coming within europe, given the fact that politically we sort of know what is going on. they are not too concerned about brexit as far as europe is concerned. and as far as the elections are

concerned, that's may and june. so they are some way away. so maybe they are finding better places to put them and their money. but at the moment it's created a situation where european equities are very inexpensive and we believe well supported by value. >> so a couple other names, you have a buy on taylor wimpy and bangkok? >> yes, i guess to a certain extent, there's a brexit effect as far as the uk is concerned. and yet some of the news out last week was positively supported. so there's a value gap and a risk gap there that can be filled. as far as the likes of bangkok, a lot of the u.s. stocks rallied solid indeed. the value trends have picked up, so you have a meeting of share prices and values retracting again. so i said, we're not a uk buyer

in that respect because of the stocks. >> you singled out one stock that is definitely overpriced, even if you think the rest of the market is trading below or at fair value. why swash? >> we look at prelims in the one or two-year growth. and for whatever reason, an awful lot of good news is being priced into swatch in a short period of time. indeed, the luxury stocks themselves. the fact of the matter is we are clearly not alone. i saw something tweeted earlier on your website, it is the most heavily shorted stock in the stoxx 600. that probably accounts to why it is where it is today. but it is very difficult to see good news coming through here when the stock lookses expensive to us.

>> rob mccreery, thank you for talking to us. it's the beginning of the week, what are you looking forward to? sorry, i threw something across the desk. e-mail the show. streetsign streetsigns@cnbc.com or @streetsignscnbc. we'll take a closer look at the fashionable trends set to dominate in the coming years.

hi, everyone. welcome back. you're watching "street signs." aixtron is seeing germany withdraw their approval for the chinese to take over. >> in a rare interview with a newspaper, piech and porsche families vow to support the vw management. there are a lot of german names in there. you're lucky i got that and not you. the uk is considering having the corporation tax if faced with a brutal brexit deal with the eu. according to "the british times," they could cut the headline to 20% if eu members

block a trade deal or refuse passporting rights to financial services. the newspaper quoted unnamed services saying we have quite good cards to play if they start getting difficult with us. downing street refused to comment on the report while the treasury secretary said we keep all taxes under review. meanwhile, big banks are prepared to relocate out of the u.k. over fears over brexit. that's according to the british bankers association. the head of the paper anthony brown said the public and political debate was, quote, taking us in the wrong direction. he wrote most banks have projects working out which operations to move and when adding their hands are quivering over the relocate button. speaking to cnbc at the conservative party conference earlier this month, brown highlighted his biggest worry for the u.k. banking industry following a brexit. >> one of the concerns about brexit for us as an industry

wasn't the day that the referendum result where the government then committed to leaving the eu, but actually when we do leave the eu in two years' time or two years after the article 15 negotiations. because that's when the real uncertainty comes about, whether the banks face in the u.k. can carry on certain customers in the eu and the banks can carry on with customers in the u.k. we want as much clarity for the road map for how that will unfold, and that is transitional arrangements between the u.k. and the eu. now the global luxury market is estimated to grow by 4% this year topping a trillion euros in sales by the end of 2016. according to the global luxury report, travel, food and wine and even fine art are the major trends to watch out for this year and beyond. the chief investment officer at tv direct is here with us this

morning, good morning. michelle mcgrade, how are things looking? >> good morning. it's growing faster than any other sectors in the industry. >> and this is down to asia and the middle-class consumer becoming rich? or is it down to a split division? >> well, it is everybody who is middle class wants a luxury item. so it's all about having the experience and having something that is a lifestyle and heart sing. but the drivers are really the asians and the chinese. the chinese account for a third of the luxury brand market. >> for the first time in history, and i'm looking at a recent report, chinese consumers have increased the contribution

from 31% to 30%. that share is not growing. that's responsible for much of the fanfare among luxury firms. if that growth is not coming or that does not continue, how worried should the electric companies be? >> i don't think they should be worried at all, actually. i think we had a quiet first half of the year. there was a bit of a concern about growth in china. but, in effect, china is growing one of the fastest markets with growth in the world. so they shouldn't be concerned about that. the thing is, there are so many more people joining the emerging middle class. and so think about it, by 2030, we should have 500 million people that call themselves middle class. that is the total population of europe. and that $500 million i'm talking about is just in asia. so the growth of the market is

definitely going to be supported. >> how big of a factor is currency in the luxury market. we are hear iing burberry fluctuates around the currency. >> yeah, currency fluctuated because the chinese don't buy in china, they buy outside of china. and so with the -- since july sales have gone up about 7%, and you have seen people flocking in to buy high-end goods. and companies like burberry said their sales are up since the brexit vote. so there are more and more chinese coming into the country. and also actually don't forget the u.s. market because the

dollar is really strong at the moment. and so they're flocking to the uk as well. >> our guest just a moment ago had a sale on swatch, but you're saying swatch is losing revival. >> well, not necessarily swatch as such. what is interesting with swatch is that -- and with any of the companies, they have to really watch their brand. they have to keep their brand luxury. and as soon as it ceases to be luxury, then it becomes an issue. and the watch market has a real issue because watches are not as important in life for millennials as they are to us. you know, they have their phone that tells them the time. so swatch specifically has a problem. swatch has had a difficult time, but since july, since brexit vote, sales of swiss luxury watches have risen 13% in the u.k. >> i just wonder how sustainable the sales are based on currency

alone. >> yeah. i think all the compaes are expecting 5%. and what they spend their time on is keeping their brand, the brand everyone wants to buy. so they've got to say luxury and relevant. >> michelle, thank you so much for that, chief investment officer at td direct investing. we need to take a short break and check out world markets live. while we're on the break, it's our blog that runs throughout the entire trading day. we'll be back to talk fx and get an update on the u.s. presidential race and be talking oil as well. stay tuned. ♪i had to leave my happy home in exile♪ ♪oh which way should i go? ♪home is where i want to be ♪home we love being green. so the nest learning thermostat connects to your phone,

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welcome back. you're watching "street signs." i'm caroline roth. >> and i'm louisa boys jesenboj.

these are your headlines. >> we speak to the ceos from at&t and time warner about the possibility of a merger. and philips is confident about the future profits. >> we have a whole arsenal of improvement measures from expanding the top line to reducing overhead cost to indeed making our manufacturing footprint more effective. syngenta shares stumble after chemochina did not offer concessions in the bid for the swiss agri giant. and hillary clinton says trump is a loser as he admits republicans are losing in the polls. >> she has a tremendous advantage. her former president is

campaigning for her, the first lady, the president, all are much more popular as she hopes to be, but she is seen as the incumbent. a quick look at u.s. futures as they are looking positive across the board. the s&p 500 after it closed flat on friday seen by roughly 11.5 points down. the nasdaq and dow look to add 70 points. earnings this week feature those from apple, amazon and alphabad. we'll be busy with earnings in part because of at&t and time warner's deal, we are seeing stocks rally. some of the media names, xetra dax is up. we also have earnings this side of the pond with philips out

with better than expected numbers and shares up by 4.5%. in the currency phase, we're seeing euro dollar at 1.0888 fairly unchanged despite the fact for the month of october we got better than expected pmi numbers and just want to tell you that by and large, u.s. dollar strength is still the story of the day. we are close to an eight-month high for the u.s. dollar index. very important week for the u.s. dollar given the gdp footprint on friday. yeah, when looking at these effects markets, the euro dollars come right back down again. here's the head of the forecasting research center this morning, welcome back, good to see you. >> yes, good to see you. >> the requieuro dollar, we aret back down again. is that due to the comments we got from mario draghi last week that taping isn't in the future? >> the markets are so thin, so

only banks now are coming so far. you would be really upset if you shorted the euro dollar at 1.40 given the press conference. so i think it has to do with that thin liquidity in the markets that is not helping at the moment. >> what is your expectation? that we continue to head in this direction given we anticipate the fed is going to hike? >> yeah, i think in the short-term it's going to ease down a little bit and may get as low as 5, but i don't think this is a level where you want to go all in in short position. you have seen the 1.10 change, you may feel more comfortable, but i think it's probably near the top. >> paul, if you take a look at dollar positioning, it is actually the highest, most extreme since late january. is this dollar strength primarily on -- based on the premise of what the fed is

doing? or is it largely to do with an expected hillary clinton win? what do you think? >> i think it is both, really. we also have a problem with the dollar and the fed doesn't officially target. everywhere we look at they should top the currency. the u.k. accidentally, if you will, with the brexit vote, i think positioning is starting with a long stretch now. but when things are going to be raising rates, we'll stick with it. come the new year, it could change the world rapidly. >> go ahead. >> sterling will be the one to lead the way. we are seeing the 1.10 parody against the dollar, that is a little stronger than the bond. >> i was just going to ask you about that. based on the latest data, sterling shorts have come back a little bit. do you think the market got carried away with its bearishness on pound/sterling? do you think that was the bottom

specifically after the flash crash? >> i think so. who knows where the bottom was during that. i mean, i'm old enough to try to remember where the old time was, and we think that is around 1.05. we might see 1.18 in gains, but that really is -- >> do you think the hard brexit will make a difference over soft brexit? or are we just bathing in brexit? >> i think the whole brexit thing has been done before. everyone is an expert on the legalities, so to speak, but i think brexit is brexit, whatever happens. and it will come down to how skillful the negotiations are in trade deals with europe. i can't say -- mutually it's a good idea, but politically europe has to fight hard.

>> it's interesting comments coming from the belgian prime minister over the weekend. he said if the eu can't strike a trade deal with canada because millonia walked out of the trade deals, how would they negotiate a trade deal with the brexit and the eu once brexit happens? how do you feel about that? >> you have to go into it thinking no real -- they are good people now. because they are asking big questions how the european union works. so really, they are going from the zero tariff and trying to build things up if they can. but i think it just disappoints that free trade is a thing. politics is a problem. >> when you look beyond the pound and beyond euro dollar, are there other currencies striking your interest?

especially when looking at the trade effects from this lower pound. are there other opportunities out there? >> i think the swedish crona is doing well. i think sweden really and truly should be near 9.20 or 9.75. we have a bit of a dollar down at the moment. the u.s. fraccers have a lot of money invested. i think the world is difficult. after last week's bsa meeting, they are not going to cut rates any time soon. >> well, thank you very much. this is a really cool story. finally after ten months of

political debt lock, something is moving in spain. the spain socialist party will allow the conservative prime minister to form a minority government. during a meeting in madrid, they decided to abstain in a confidence meeting later this week. they have come in second in the last two parliamentary elections, but the conservative party has failed to win the overall majority in both occasions. now the deputy leader of the csu, a junior coalition partner in angela merkel's government, told the magazine that he will back her if she decides to run in next year's elections. this puts an end over the refugee policy. the csu and allies have long demanded a cap on the number of asylum seekers allowed into the country. hillary clinton has extended her double-digit lead in the two-way race with rival donald trump according to the latest abc news national poll. this after the final presentation debate in las vegas

wednesday in which the republican nominee said he would wait to see whether he will accept the results of the election. campaigning in the swing state of north carolina sunday, clinton called trump a, quote, sore loser adding that his threats to challenge the results of the election are a, quote, direct threat to our democracy. now, at the same time, while donald trump campaigned in florida, his son eric trump said that his father's ready to accept the results of the election, quote, if it's fair. several key members of trump's campaign team including his campaign manager kellyanne conway have downplayed his comments about the integrity of the election. and another allegation of sexual misconduct has risen over the weekend from jessica drake against donald trump. he denied the accusations calling them false. at a policy speech in gettysburg on sunday, he looks forward to suing his accusers after the election. with only 15 days until election day, both candidates are making

a final push in crucial swing states. nbc's edward lawrence is joining us from washington. edward, what can we expect this week? >> reporter: we can expect to see a lot more of the same. donald trump trying to hit the message to resonate with his voters. he believes the message of drain the swamp of the corruption in washington, d.c., because everything is rigged resonates with his supporters there in florida. he has two more events scheduled for florida later on today. this as he wants to believe that undecided voters would also swing his way with that message. on the other side of this, hillary clinton is also using that message against donald trump. she had a voter rally in north carolina as you said, called trump unqualified to be president. in las vegas, president obama campaigning for hillary clinton, said that because donald trump is saying the system is rigged, that proves that he is losing. president obama going on to say he's unfit to do the job that president obama is in at the

moment. so again, donald trump not backing down for all of this. in fact, doubling down on the comments. he truly believes that the undecided voters will swing in his direction even though the latest poll shows him down 12 points. >> edward, he may think that, but kellyanne conway, a trump advisor, actually said over the weekend, yes, we are behind. once again there, is a split within the campaign in what will happen in two to three weeks' time? >> well, i think the campaign does believe they can actually turn this around. you know, that's just -- she's just saying what is what the polls are showing. there you see 12 points separating donald trump and hillary clinton. the campaign and the candidate have been saying different things, kind of the same but different mess annualagage.

donald trump says he thinks the election is rigged. but his campaign says the will accept the decision barring any disruptions. >> thank you so much, edward. we'll be back with more in just a minute. ♪

this is the new comfort food. and it starts with foster farms simply raised chicken. california grown with no antibiotics ever. let's get comfortable with our food again. these are live pictures from france where migrants are being

removed from a camp outside the port, this is a so-called jungle camp home to 6,500 migrants fleeing poverty on the humanitarian grounds. france is planning to relocate them to 450 centers across france. and charity workers are expecting hundreds and hundreds of the migrants to try to stay. and the big problem is, what is the fate of some 1,300 unaccompanied children? where are they going to go? >> exactly. fighting in the syrian city of aleppo intensified on sunday, a day after the russian cease-fire was broken. the three-day so-called humanitarian cease-fire ended before the un could deliver aid. syrian and russian air strikes hit a number of rebel-held areas around the city while heavy fighting erupted along strategic front lines in southwest aleppo. almost 500 people have been killed. more than 2,000 injured since the syrian army launched the

effort to recapture the city's east last month. the kurdish fighters claim a key town in the battle of mosul. the capture came while the u.s. defense secretary ash carter was in iraq reassuring u.s. troops on the importance of the battle for mosul. nbc's matt bradley reports from iraq. >> reporter: ash carter is in iraq for his second time in many days. and his mission is two-fold, trying to reassure u.s. troops that the battle for mosul is a fight worth fighting alongside iraqi security forces. this comes a few days after a u.s. service member was killed north of mosul. this man was embedded with kurdi

kurdish peshmyrga. the islamic state is lashing out erratically. most recently they set fire to a sulfur factory and the u.s. troops were actually forced to dawn gas masks in order to avoid the stench of burning sulfur. really, this just goes to show that the islamic state is feeling the pressure. they behaved this way in the past, where they start to behave erratically, lashing out to take bizarre techniques in the course of the battle. it is up to the iraqi security forces and the u.s. advisors to see if they can keep up the pressure and penetrate isis defenses and retake mosul. back to you. top oil producing nations met in ryadh over the weekend to discuss strategies to stabilize global oil prices. the president held a meeting to

discuss bilateral cooperation. they said russia and saudi arabia's interests are, quote, getting closer on the need to stabilize the market. the talks come ahead of opec's meeting in vienna on november 30th. i want to take a quick look at oil prices this morning. they were down in asian trading overnight, but now staging a little bit of a rebound to crude at 50.94 up by 0.09%. iraq says they want to be exempt of any opec freeze or cut deal. why? because they say they're fighting so many wars. and it is, in a way, understandable, but i wonder, given not iraq showing hesitation to join this cut, and it is the second biggest producer in opec after saudi arabia, can this deal actually go through if one of the key members isn't taking part? >> i'm not sure what the expectations are for the 30th, what we'll actually get, if we'll get anything real from this meeting.

oil has stabilized over the last four to five months somewhere around the $50 mark, right? but richard mallard is with us from energy aspects, a political analyst there. richard, if iraq is not part of this deal, will there be a deal? >> i think there's definitely work to be done. it's not going to work if iraq is completely outside of this deal. certainly, no one is expecting iraq to make big cuts, but the first problem is just to get agreement on the level, the baseline from which we're going to measure iraq's production. >> how difficult will it get to get agreement on that? >> i think it could be tricky. straight after the positive talks in algiers, the oil analysts came out to make a big deal between the second resources, which is what the rest of the debt plans to use to set the base line. and what iraq is saying its own production is. now they have a series of

reports from the main agencies that produce the secondary sources in baghdad over the weekend to essentially tell them off, to tell them to correct their production figures to increase them to the levels the iraqi officials are putting out. but nobody in the market really agrees with those numbers that baghdad is putting out. so i think there's going to be some difficulty behind the scene between now and the 30th of november to try to get baghdad seemingly from the same sheet as the other producers, if not being very positive about this, at least about quieting down about the production levels. >> that's really where russia comes in. we have heard the comments coming from mr. putin, but then we heard the ceo of the biggest oil producer in russia saying, no, to an output deal. how does russia make sure that some of its biggest energy producers are actually behind it? >> yes, i mean, this is ather of the difficulties as we go into the 30th of november.

the section within a key ally is showing there's a clear difference here, they have been saying he doesn't believe russia needs to be a part of this, making some comments about increasing production. i think there are mechanisms that the kremlin has to agreeing the producers into line, at least as far as freezing production. i don't think russian production will be cut, but i think using the mineral extraction tax, which the main fiscal measure against the producer, there are various ways that production from russia will be limited next year if putin and the crekremli decide that is worthwhile to support a deal. because, of course, in a freezing production, encouraging the opec deal to so you cucceed going to be good for the russian budget. >> i have seen a note for barclays is showing a small deficit in the third quarter. and that deficit is going to

widen in 2017. then the other week i'm seeing goldman saying we're far away from the deficit and rebalancing of the market. where do you stand? >> well, we think this quarter and next quarter we are pretty evenly balanced. it's going to come down to the exact numbers that come out of the opec producers over the next few moments. it comes down to the demand figures still trickling in from some of the medium and smaller sized economies. but we think going into next year without the opec deal, you only see a significant deficit e merging in the second half of the year. but if opec can reach a deal, that begins to kick in from the beginning of the next year and we see deficit throughout the next year. so that is why there's such an importance attached to this 30th of november meeting for 2017 balances. >> richard, u.s. oil rig counts posting their first double-digit rise since august. some people say it's important to follow the metric, others say not so important.

nevertheless, we have seen the price of imex up 30% and hanging on in the levels of somewhere near $50 since then. where do you think we're heading in the short-term? >> well, i think recounting the metric is of limited value these days. so much is being done in terms of efficiency gains, high grading, that we've got to look at more than just how many rigs are active. but it's definitely true that u.s. producers are gradually beginning to raise their activity levels in key places in the most productive basins. there's a lot less happening, which for a few years ago was an exciting hot spot, but they have not held up as well when prices come out. i think what we're seeing is the beginning of the bottoming out for u.s. production, certainly for the size of the declines, year-on-year declines, but we still need prices to go back to

$55 to $60 for wti for u.s. producers to begin their increase in activity levels. then in the six-month to nine-month lag between the activity level, you're not going to see it in the production numbers. so we probably are going to leave behind the big, big losses on the u.s. productions as a whole, but we still are to the point whether the u.s. is firing up again and returning to growth. that's unlikely for late next year and still needs more price rally to really incentivize it. >> richard, thank you so much for that. the political analyst at number aspects. we'll get back to the top story, at&t agreed to buy time warner for just over $85 billion in the biggest global deal of 2016. the giant will finance the deal half in cash and half in stock paying $107.50 per share. the media tie-up aims to complete by the end of 2017. but it is an uphill battle until then with lawmakers and regulators alike voicing

concerns. >> now this will be the first big test of the new president's anti-trust policy in the states. so donald trump has pledged to block the deal if he wins the election on the grounds that, quote, it's too much concentration of power in the hands of too few. meanwhile, the mega deal still faces scrutiny from the u.s. justice department in order to bypass the telecoms regulator the fcc. time warner could be open to spinoffs. tune into "squawk box" midday to hear from the ceos of at&t and time warner. don't want to miss it. that's it for today's show. i'm caroline roth. >> and i'm louisa bojesen. have a lovely afternoon. see you tomorrow, same time, same place.

a mega monday. at&t agrees to buy time warner for $84.5 billion. but will the deal pass regulatory hurdles? and mark faber drops the doom. why the pessimistic calls for oil prices to rise soon. and only 15 days left before the election. we'll bring you the latest poll results and tell you what the candidates are saying on the campaign trail. it's monday, october 24, 2016. and "worldwide exchange" begins right now.