this is the friday session here in europe. more risk events. the pal roll reports the state. all eyes on the fed with interest rates delivering the rate hike. worth noting, the markets in europe have been falling for eight straight days. yesterday, a flat session. there's a beari isish element cg through. the italian referendum, brexit

in the mix. watch it closely. yesterday, we saw outside losses versus the european markets for the futures. similar picture this morning. it's on the back of the bounce sterling after the high court decision and commentary for the boe. one sector in positive territory, that is household goods. the rest trading weaker. toward the bottom, outpaced by health care. this is what we saw stateside, too, technology and health care. 1.2 on. don't forget the clear election risks. many of the companies are reporting that, concerned about a less friendly environment stateside no matter who wins office. rio is weaker. insurance stocks are trading south. .7 down, just outpacing to the downside. in terms of the others, tele-co

is weaker. some of the safe havens, food and drink are ten 10%. industrials just accelerating and household goods. where you are seeing green, half a per cent north, electrolux along with montclair. one of the best performers, 6.8% higher. the response out of the gates. take a look at this. by comparison, we are trading weaker. the ftse on the losses. it's the one that fed better. you are seeing this in a two-day window after sterling accelerated up to the 124.

6748 as a result. 210 on the south. we are seeing the gentle market flash. right across the board, trading lower. they say they are on track to achieve the fourth quarter target after the increase in court earnings. they are growing by at least high single digits. the stock up 2.3%. keep in mind, this is a stock. virtually nowhere over the course of the year, up 2.5% if you look at the performance today. let's go to carolyn for more on the reaction. what do you think of the news this morning? >> you said the stock has gone nowhere. a year ago, we saw the merger. it was 70 franks, now closer to 5067

50. over the year, there's been price depreciation. they are skeptical of that behemoeth. they can be delivered. the cost cuts they are promising are way too ambitious. a lot of people said this is a firm, the big firm is not nimble enough in a market dogged by overcapacity and where they have been too over invested. the last couple quarters has been a show me quarter by eric olson the new ceo of that group. they are on track to fulfill very ambitious promises. look at the third quarter sales. 7 billion swiss franks. one important area is pricing. it's where we are seeing improvement. pricing us up the third quarter. the ceo told me pricing will continue to increase.

we saw plenty of overcapacity. he told me before, the bottom terms of pricing was hit in 2015. we are well past that level. the other big factor i want to talk about is shareholder returns. the company repeatedly said once we get that down to a sufficiently low level, that is around 13 billion swiss franks, we are going to start returning capital to the markets for shareholders. what form is that going to take, dividends or share buybacks? take a listen. >> you made a merger to generate more cash flow and we are going to make good on that commitment. we said that establishing solid investment grade ratings was important and having our ratios in the right place. we set a target of 13 million of net debt by the end of 2016 and we'll be there. once we are there, we will make

good on our commitment to return value to shareholders. >> they were cautious on the stock. j.p. morgan is. they say the emerging markets will take a hit once the fed starts hiking interest rates. that won't be positive for la falgeholcim. they are triting at a 15% premium to the historical average. it's not necessarily cheap at this point. i don't know what you think, steve. >> i think we are all looking for evaluations. we saw the fact that they are growing deal after deal after deal. i'll go after the fact that i have been around a while. 2001, big deal, blue circle. 1997 to 2001, he was the ceo, said no, no, no to quote megan

trainer, then he said yes to lafarge. the point about this company is it is growing through acquisiti acquisition. it's grown through organic as well. they are not cheap anymore. they are not cheap. i want to look at whether these companies, which in europe are good, solid, well companies. it's hard to argue lafarge isn't. you are paying 17.4 for a cement company. that is tough. is it supported by earnings? i'm going to this excellent piece of research about european earnings growth. i'll do a couple, then look to the panel as well. european companies are doing well on revenues, earnings and growth. your point taking out some of the dogs. i'm looking at core europe.

i think it's a fair exercise to do so. if i can do that, revenues are up a respectable 8.1% and e.p.s. is up. let's celebrate europe numbers. we beat ourselves up. let me finish up. i'm going to give you context. i'll get you back in, i promise. the u.s. equivalent is for revenue, 2.5%. they are outpatie ioutpacing eu that. 1.9 and 4.1% growth is better than many expected as well. europe is outpacing in terms of blue chip. it's very tight, i agree. we are outpacing by a significant margin. i think that's something to talk about, if not celebrate. >> let's put it into context. >> more context. >> six years of negative

earnings revisions for europe. for six years, european countries have nothing. if you put the banks in, it doesn't make it worse. this quarter, 68% of banks reported and have beaten, not necessarily the revenue line, but the earnings as well. very strong. if i look at earnings forecast next year, do i think it could be any worse? no. do i think the banking could be worse? no. then i should be achieving somewhere between 5% and 7% growth in earnings before i put gdp inflation into that picture. when people say to me, michael, they'll never get to 13% earnings growth. for the last six years it's been 13%. yes, i agree last year, that was entirely wrong. that's why we were short. that next year, i think it might actually happen. if i get to 7 or 8, it will make

the market move and revalue the market. >> you are doing the numbers. everyone is. quietly doing all right at the moment. it's not the big story on the demise of european equities. it's not the same as a couple years ago. i love that. i'm taking it back to the states. however you pronounce that, awesome. the numbers, i think the biggest story told is the numbers are good. if you look at the global economy, including eurozone, it's coming on the back of policies. people haven't taken into account to buy corporate debt and how that worked. it's showing up in the pmi

numbers. >> they have that combined. it's on the list of ones you can buy. what would mcdonalds do? >> there's a mismatch between the narrative you are supplying about earnings improvement and the message from the central banking community. you continue to point to reasons not to increase the cost after capital at this point. >> we look at the banks and the policy assumptions are terrible. the feds have been telling us they are raising rates only to backtrack. now that they have given up and they are calling for two rate hikes, now it's accelerating. the key is, there's so many folks that are investing, it's different this time. lower for longer. it's the term, pushing on a string. the central banks are pushing on a string. it's not going to work.

that was the first fed governor. every cycle, we don't think the fed is going to work or bank of england or the ecb. i's a matter of time. >> i'm going on something that is going to burst my balloon straight away. look at it in a few moments time. it's not a great story today, i do not believe. i'm afraid to say. >> there was an issue. we'll do it in a moment. >> one of the sectors you threw out of the basket, commerce bank, front and center, the restructuring story that's been playing out. this tells a story. no appetite despite performance for october, not participating in a huge way. the stock down 37%. the legacy it's beaten forecast with more than expected loss in the third quarter. structuring costs, low interest

rates weighed on the bank. generally the second largest lender confirmed the expectations for a small, four-year proffer. it's down 7%. it's not doing much to move the needle on the stock today. >> you are completely right. i think everybody is aware of the outlook. there's no real reason to buy into that stock. look at it without any rose glasses on. it is a restructuring case. the bank is undergoing the biggest overhaul in the last ten years. there are going to be only two divisions, another big round of job cuts, 9,600 full time positions are going away from the bank. so, essentially, nobody really knows what that means in terms of impairment losses going forward.

essentially, it's not cheap to get rid of so many people, mainly here in germany. bottom line from the q3 numbers is the focus is, of course, on cost cutting, shrinking the bank, once again. also the focus is on making retail bigger. they want to gain 2 million more customers by 2020 in a move to increase their market here in germany. many people are, though, saying this strategy has actually a lot of downside risk as the retail market in germany is very, very competitive. it's not easy to make a lot of money here. so, the positive from the numbers is as well that the capital ratio increased to 11.8%. ironically, it is higher than the capital ratio of the bank. having said that, i think the

focus is really on where should growth come from for the shares and that is one of the big questions i'm going to tackle in exclusive interview with the cfo later today. i'll bring it to you roughly at 12:00 local time. back to you. >> thank you very much. pressing questions coming his way. banks performing badly. sector down 1% so far. >> not compared to what the stocks put on over the last two weeks. >> this is the point. it's a correction. you have such a strong rock. >> very quickly, let me give you the spanish pmi numbers before michael. pmi inches lower to 54.6, the lowest since july. 54.7 in september. new business pmi falls to 52.6. that is the lowest since november, 2014 from 55.8 in

september. the spanish are going to have a gom government, but does it indicate the momentum is slowing? >> pmi picked up in spain is firm and continues to firm. the services side, we expected it to be weaker and that picks up at this point. the government is really important in terms of the wider service sector coming through. one of the most attractive areas of the moment is something the spanish media has is absolutely slammed here. >> i fancy the ibex, but it's not going lately. >> only with two or three stocks. you have the two banks. obviously it is dominating the i-banks. there are fabulous companies at the present moment in time.

one of the ceos, i think is absolutely fantastic ran a brilliant business growing simple acquisition. then look at the property companies that come out, nothing, out of nowhere, out of the ruins of spain and people created cash property companies, which for me -- >> a clearing. >> yes. >> don't you find it interesting we are talking spanish numbers slowing from the mid-50s, versus being negative? the world trades like we are in a global recession. there's a fear you are going to fall back into this global recession and having a slight slow down in the services pmi that is still a robust number. >> i look at where we are in the base. i'm going to put in spain unemployment rate. i agree. things are great, they look good in the pmis. 22.7% is the base unemployment. still horrendous. >> so, is that good or bad?

what that gives you is opportunity for improvement on an economy showing a degree of improvement. that's the story, central banks, to your point earlier, pinned with low rates while the economy is accelerating, increasing long rates. >> i'm going to shout out, below 20%. >> just want to say, we have double box up, a tv term. we are showing you swearing in the new cabinet. swearing in the new cabinet. >> where is the king? i know that. >> since it's what we are doing, i thought it important we go live to madrid. >> it's a minority government, which is going to be able to pass very little, but give you stability for three years because it doesn't want to go to the election or psoe.

party socialists don't want to go to election, either. not much reform. headline news, spain has political stability for three years because they have a government that can't do a lot. this is great. we come back to the unemployment issue, which was driven by the construction sector. it went down to 6%. it's not coming back then moving around. >> monetary policy. time is up. it's up to the government to come up with dramatic reforms. >> doesn't need it. spain is an economy -- >> that's it, end of game. >> spain is an economy that will surprise you over the next five years. increase in tourism, will not be in there. >> then we know we can lift monetary policy away from the ultra low setting. >> come back. >> i'm stumped. >> as we all are. i have a question. it comes from the comment steve made that we didn't get quite to

explore, but the issue. i just want to come back to that. i think it's very interesting. there are some noises coming out of the appetizing market that are not positive. the facebook announcement that advertising revenue is going to start to slow. the growth will slow, anyway. at the margin, you see some suggest that maybe appetizing numbers will be down for a number of platforms. isn't that like banking, a life blood story? if ad spending comes down, ceos are less confident about marketing to buyers. >> great question. especially in the u.s., there's seven years of economic recovery. there's a feeling like you are too long in the calendar, i don't want to spend too much money, you are about to embark on a recession. the calendar doesn't dictate it

so it should pick up. the recession is dictated by credit. the credit markets are wide open. globally, they are wide open to the point the ecb is buying corporate debt and negative yields in europe, which is still insane, sounds insane. but there is. it's very stimlative. >> you really need a shutdown of credit to end up in a negative economic backdrop. >> when you had a slow down, you had ceos spending more to detract the product. it hasn't worked like that. >> the make up of advertising changed, too. internet advertising versus tv advertising. i don't want to pretend to be an advertise i advertising expert, but it's changed. >> it's growing quickly. the outdoor traditional side is

not growing. j.c. deco is weak. that is for them. if you take the overall picture, we have in a trough for advertising. if we are right, things are improving, the corporates will be back next year, but do it different. >> think about this, has donald trump got more advertising from going on abc, cbs, nbc or twitter? it doesn't cost a thing. he tweets something and everybody covers it in a news. traditionally in a presidential election -- >> weighing in on the radio about how he's getting the vast amount of traffic is about trump at the moment and the traditional polls are underestimating the power he has on social media. the person who pointed this out correctly called brexit and the uk e lelection as well. there's a concern on the democrat side. he absolutely nailed it.

>> he's killing it. you wouldn't expect that. the millennials and more computer literal are on the democratic side. kind of a grounds eye view, not saying which candidate i support, they are both awful. when going through the u.s. and drive by houses, people typically have signs in the lawn. i have not seen any hillary clinton signs. you see sporadic trump signs. there really isn't any sign. you have not seen a lot of pro-hillary signs. the interesting thing about this election, what you are seeing from the exit polls from those that voted already, they don't want to vote for the candidate they are voting for, they are just so against the other candidate. that creates an environment that is not right for major legislative change. >> we are going hold on to you tony. let's get into the detail of jc. >> thanks, jeff.

the stock looks terrible. the billboard they produce. if you put the stock on the bill gork, downwards in the stock movement that led to a weak per formansz of 29% down and today, ugly performance in the stock as the shares hit a two-year low. all this on the back of the french outdoor advertising company. it would turn on the quarter and the global economic slowdown. the revenue fell to 1.5% down from 3.4% in the previous quarter. a significant revision. another sector, look at the gambling side of the business, 3.3% higher. upgraded the four-year guidance. all this, thanks to the weak british pound. they said they are benefiting from better than expected numbers and held by favorable sporting results. meantime, investors are seeing

the worth in loreal sales. north america being a stand-up performer as the shares spike 3.5%. i give this to michael, he called it this morning, 6.1% higher announced the retirement of the ceo and cfo. the swiss watch maker has a decline in first quarter profits. big question i have is whether the bounce in the stock is due to the change. i blame it on strategy for the performance of this company or is it about a change in the trade for the company? steve? >> this is an amazing company. it's owned so widely across the board. it is a blue ribbon in many ways. this is the blue ribbon. the problem with being the blue

ribbon is your argument in the resources when we talk about materials. i know you like it. i worry about the price. where is the leeway. up 2.53%. it's not a lot for the number one shareholder. gardner, 2.2. actually the top ten shareholders own a small portion of this company. it comes differently from the one that is family dominated as well. we argue about evaluations for a long time. i'll say this point quickly. i know we have to move on. trade 25 times a sector. down to 16-17 times. 24 times. where is my wiggle room? where is my wiggle room? >> can i bring up what the chairman brought up? he said the trend is not

improving. the part you brought up is done. can you look past the trends? >> the starting point in these businesses is to clear out, get it back off the retailer. get down low. then you are starting to produce on a lean basis for demand. then you find, over a period of time, i can't say definitely tomorrow, but the demand in supply come to light. some pricing flexibility with that business. therefore, that's where you start the transition. if you pay over 20 times at the bottom of the cycle for business like this, which could grow over the next decade, 5% to 8%. that's kind of cheap. >> we have to take a break. everybody stay with us. nobody move. we'll see you at the other side of the commercial break.

we have solid numbers. shares rising as earnings continue to grow with the ceo telling the company is committed to returning value to shareholders. they expect loss in the third quarter. shares are lower as the lenders earnings are way down. worth it? loreal. the biggest gains in europe as it beats expectations in the third quarter. changes at the top. the ceo and cfo announce their

retirement. markets here in europe have been open for half hour and you are seeing a sell off. the acceleration of losses are up. felt more in the first than some of the other markets. we are down about 1% on it. .6 on the french market. you are seeing the impact of stronger sterling. some of the positions they have been buying out but having impact. forget october with the gains. we are back at september levels on the index. broadly speaking, one is a negative one on the stock 600. the viewpoint pushed the market down .8. payrolls today, mistakes of the market participants believe this is a big one for markets today with the election risk front and center. brexit still having an impact.

we are seeing the impact. so many different risk events and corporate earnings moving the needle. let me show you the sectors and you can see the pressure points on the markets. all sectors are negative. health care, the one that is feeling the selling this morning, similar to what we saw on wall street down 1.8%. insurance finances, these are the weakest ones on the bottom. at the top, household goods and some to company reports. even this sec ptor is faded int the red. buy stocks. take a look at the reaction. big news are moving to the upside and downside. ridge month, the numbers, i don't think are great. they did beat expectations which were battered back the stock is up 6.1%. think time pieces. look at the likes of the asian

markets, down more by hong kong and the key parts, north amer a america, japan. getting movement on the back of the numbers today. it's accelerating 4.6% higher. the others look terrible. if you look at the performance on the market of vienna, the worst performer. the numbers look messy, 5.8% south on the stock today. the other one had earnings out today under enormous pressure, down 7.6% for a two-year low for the stock. >> karen, thank you very much for that. having a deep conversation here about social media and the role in distributing news. what we know is that the s&p 500 had a bit of a rough ride. if it continues the downward trend in today's trade, it would be only the third time in the past 23 presidential elections the stock market declined the

week before the vote. however, they say a potential trump presidency is not as scary as many think. speaking to cnbc, he said, quote, in the end, trump is a real estate salesman. when you elect them to the presidency, they are going to try to deliver something. >> brilliant. come on. brilliant -- >> one quick chat. >> because he's real estate. occasionally comes up with a comment, but promoting himself and about offering something that is new and unique causes controversy, right? tony, let me ask you, how do i turn here if i want to take a bet on the outcome. >> i don't think you can. if trump wins, you get what the consensus is, a drop, i buy it. a hillary clinton win you are going to get kind of a general

nothing done. i would buy it. i would buy the market because the fundamental backdrop is improving. when you look at the election to have major legislative change like the bush tax cuts or the obama tax hikes, it's economic dislocation. you are in a deep recession. you want to get out. you want the president to do something. in the situation, we are in the seventh year of economic expansion. the globe is getting better not worse. trump is going to come in and say we have to change this and everybody gets behind him or hillary clinton on the other side. >> that's the problem for global growth. you see the impact of the recovery story because trump is being too perfectionist. >> right except fear is worse than reality. not always, but usually worse than reality. donald trump is not going to walk in and change everything like that. you need legislative change.

you need the support of congress for most things. when it comes to nafta, you can opt out of it. you need legislative agreement on it. again, perception may drive the market down on the day but a good buy. >> health care and the pharmacists we know have been under pressure as a result of the narrative from both candidates about health care costs. after the election, is there a recovery in the health care stocks? as you point out, it's going to be quite difficult to get anything done. >> i absolutely think so. health care, we went over it two days ago. i's seeing such a drop. let me put it in perspective. the last two times you have seen eight down days in a row for the s&p 500 have been election years, 1996 and 2008. the last time you have had even seven down days in a row was the low in 2011. there's opportunity being

created. my friend is the one that came up with that. when you look back, when you have a positive backdrop monetarily, even if they are raising rates a little bit. it's not whether you are a buyer, it's when you are a more aggressive buyer. corrections are natural, normal and healthy, until you get one, then everyone runs for the hills. i don't believe there's anything fundamentally wrong. >> it's been great having you in. >> thank you for having me. >> americanism as well. i have one for you. your main guest is the dogs. do you know what that means? >> i don't think we want to go near that. i love it when you have no nonsense guests. >> we don't want to go into that. >> real pleasure. be careful whose computer you look up the latest phrase.

the uk government will appeal a high court ruling that says it must seek parliamentary approval before article 50. it sent it higher with investors hopeful it may soften a hard brexit. they said the government did not have the power to give notice pursuant to article 50. ten was disappointed with the ruling, but vowed to press ahead and vote article 50 as planned before march next year. however, economies at deutsche bank said it weakened the prime minister's hand telling clients it will likely call a general election next year. after keeping rates unchanged in the bank of england, mpc meeting, they gave their take on the court's brexit ruling. >> an example of the uncertainty that we'll characterize this process. as i said to the previous

question, the negotiations themselves haven't yet begun. there will be uncertainty, volatility around them as they proceed and i would just view this as one of the symptoms or one example of that uncertainty. >> m & g will reopen their real estate fund today. it's been suspended a long time. in july, post brexit, things are good now. henderson and huma abedin have all reopened. 1.5 billion pound fund remains closed. they saw the russian money. it was an interesting product. all kind of commentary on whether this should have been sold to retail clients without realizing you can't get out of property in a hurry. how does that work? when they weren't invested in it, property assets moved in the same direction as opposed to

holding reserve as well. >> i don't think we sorted it out. it's a daily dealing. having daily liquidity on asset that is can often take a long time to sell. the financial conduct agrees with you completely. >> the authority agree with me beforehand. >> they should have. we had the same in 2009 with the same problems. what we are seeing now is more negatives in terms of the consequence of this is managers having to hold a lot more cash. it's not so easy to sell. we have seen that and the funds now that the pressure came down. take properties off the market. it's not a climate to be a seller in. >> the pounds on the floor, it's sizable for investors. 10%, 15%, 20%. it's a great environment for flooding the icons of the london skyline. >> there's a lot of uncertainty after the high court ruling. now, although there's a positive

sign the brexit may not be so hard, it is more and more uncertainty. it's the last thing you want. when grow to real estate building, there's a long lead time in terms of planning leases. >> we have the ceo of trimont real estate. as it's forward for the first time in seven years, are we on the way after a fantastic run? i guess you are going to say no. >> unpredictability is good. politics is the black swan creating the trouble, whether it be brexit, the u.s. election situation. a year ago when we were talking about unpredictability, it was external forces like fed policy, interest rates and liquidity in global markets. i would not guess politics is the word in terms of the market. very interesting to see how

things play out. the uk gave us fair warning in terms of how unpredictability as a result of brexit could impact the u.s. and potentially the global capital markets. so, next tuesday is going to be interesting. >> going to come back to the point of liquidity. it is absolutely right. you can't have a liquid asset that takes 3-12 months to liquidize unless you have a huge cash offer. it made no sense in my mind. i go back further and saw the same thing in the early '90s, the same thing in 2001-2002. they have not clamped down. you must hold 20%-25% of cash in the funds. when we look at the wider implications, this is inevitably what they must be doing. >> the average buffer around july or brexit is 14%.

we probably will see a hike around it. that is a drag on it in such an environment like this. >> it makes it difficult to make profitable. that's fine. you can't have a liquid asset on a daily basis. >> let's bring this together when talking the global investment that's happening. a pullback. i wonder whether liquidity is the issue in going after markets with safer trades. we had a great conversation yesterday, the cfo was telling us, with shareholders, money is going to the general market afwra the uk market. do you think there is a sweep for investors to go after what might be more liquid, less political risk where they think they can get their money back quickly and a safer platform than other markets? >> i don't. i think the global liquidity for commercial real estate is as

vibrant as ever. it is not even an alternative. i don't think that's changing anytime soon. i think, really, if you look at the world capital markets, the flow will continue. what you have seen is hedging going on. in so far as europe is concerned, we have seen a pullback from the uk as a result of brexit because of uncertainty. it's not like people are going to leave the uk in droves. it's still one of the greatest markets in the world and will continue to be so. we will see diversity around amsterdam and frankfurt because of the airports and access to the markets there. i don't think liquidity is going away anytime soon. >> property investors like a discount even on the short term. why is it not triggering for investors to get into the market? >> i think it is, a little bit. >> they don't suggest that.

we have a fall. it's not suggesting the foreign buyers are coming in a big way. >> again, anecdotely, if i hear in the u.s. there are a number of investors seeing the sterling at all-time lows for them and seeing the uk as a bargain as a result of it, i think people want to wait. i think next week will be interesting to see how people reaction once next week gets through and we try to figure out what that means. it's possible then we don't have clarity, but i do think there is a viewpoint is weaker sterling is creating opportunity. so -- >> sorry, i'm going to break in with the italian october pmi. it's up to 51. the comp sit pmi in services and manufacturing, unchanged in september at 51.1. italian growth picks up slightly in october is the headline on that data point. quickly for me, property is a

leverage buy. we have seen incredibly low cost to capital. a lot of people have got into the trade. you have seen that in the volume we are showing here and the values rising. property, quite often leads us into a big recession as well. how far are we away, do you think, from a point where property actually is fully or over valued and too many parties are over leveraged? it would only take modest increases in policy rates to cause trouble. >> sure. well, property is fully valued in all of the great markets around the world. in some instances, it's for sure overvalued. investment in real estate has been driven for several years as an arbitrage. one might argue in many instances it was purely

arbitrage play. in the united states we have seen the return on the fundamentals. the economy in the u.s. is quite strong. i think the jobs numbers are coming up tomorrow. i think it will continue to reveal underlying strength in the marketplace. jeff, i think one of the questions you might be getting to is, if the fed, the u.s. fed, in fact, does move rates here in december, does that begin to erode the arbitrage play? i don't think initially. i don't think a move in the short term end of the yield, the yield curve, is going to impact property investment or volumes in any material manner. it's important, also, for those investing in the market to understand there's a big difference between how our central ban affects the short term and the long end of the the curve. it is the ten-year treasury and so forth. that long end of the curve impacts real estate values and

the mentality of investors around it. we don't see, even with a short term move in fed rates affecting the volumes around real estate anytime soon. lastly, where do we sit? hard to say. this could run for a while. >> we are going to wrap it up. thank you. the jobs numbers out today, later on. so, just to make it clear, not tomorrow. you mentioned that. >> sorry. >> you probably just got off a plane from somewhere, so we excuse me. trimont real estate. do we call you jen? >> it's friday. >> familiarity. >> check out the markets live blog that runs throughout the european trading day. head to cnbc.com to take a read. we'll be right back.

one of the largest countries where we invested the euros. >> welcome to the -- invest mltmentes are safe. in 2017 we introduce --

donald trump is building a lead in two major western

states. could be at risk of losing a long time republican stronghold. according to the latest nbc news poll, trump has leads of nine and five points in texas and arizona respectively, but at a dead heat with hillary clinton in georgia. joining us now is a global chief economist at the conference board but some market positions in europe saying the report will have limited impact on the markets because most people are focusing on the election. do you agree that's what it is about? >> i think it is interesting the labor market remains strong in the u.s. and realizing that this goes back to the election of nixon that we had so many months of positive reports. i think it will have some impact in the next couple days on how this is going to play out. >> what is the importance of the rate? there's been mixed comments. they were talking about the

participation rate. a lots changed. people are getting older, not coming back to the work force. janet yellin is changing the picture. >> two very important forces. one is the aging and the retirement of the older labor force. much more important trend to watch is the participation in the 25-35 group, which dropped off enormously. we had seen that rate coming up quite a bit. more young people coming into the labor market. that's a very important number to watch. >> what does that mean around fed policy? if we don't get a rate hike, it's not the end of the world because we can't run the economy looser at this point. put it into the system because it's a real issue. >> i think the fed is continuing, as i keep saying, to watch the numbers. i think, you know, unless the labor market numbers are going to be really, really strong, i don't think, you know, that will

hugely influence their decision. i think they will look at the overall economy, inflation, i think overall, it looks like they are likely to raise. i think they watch the numbers. this number, today, is very important. >> what about participation? a huge reservoir that could come back to the market? i think janet yellin understands that better. the contrast with the uk where the participation rate is over 20% t. debate about wages should be more jermaine to the uk than the united states. >> in the u.s. we have seen pay come up 2.5%. those numbers are going to play into the inflation figure. i think although it's muted, it will be part of the equation they are looking at. >> i want to revisit the issue. mike man making a case here as one of our other guests has, th

negative about the outlook into 2017 for corporate profits. what do you say? i get the sense from looking through your notes here that actually the down trend continues. >> yeah, we are concerned about the relatively slow growth of the economy. next year, looking at less than 2% growth for the u.s. economy. the revenue side, we get a lot. we see wages going up significantly. so, this profit figure will be a matter of concern. we have to look atmore than just profits, so, we don't think it's going to be a clear signal because consumer growth is strong. it's going to help consumption. i cannot see a strong recovery of the corporate profits. i wonder where it's going to come from. it's not going to come from the revenue side and the cost side is a big concern going into 2017. >> the u.s. situation. >> yeah. >> i think we have to take that

on board. you know, the data and points they come back to in europe suggest growth exceeds current expectations forecast. >> in europe, i agree. europe is still much further behind in the business cycle and upside into 2017. so, i think there, your comment is correct. in the u.s., we will see this continuing pressure. >> bob, thanks so much for coming in. global chief from the conference board could look at the french pmi and services pmi, 51.4. the forecast was 52.1. it's easier than the market was looking for. >> the october final services, pmi 54.2. the september final 50.9. gerrje is europe back and have the european central bank spotted it? >> we have to wrap up the

program. michael, a pleasure having you on. michael brown, thank you for tuning into the "squawk box" this week. stay with the programming, it continues.

good morning. it's jobs friday. we'll talk expectations and what the number could mean for the markets, the fed and even the presidential election. earnings central, starbucks shares rising on better than expected quarterly results. a move to hollywood. dalian is buying dick clark productions. the "worldwide exchange" begins right now. ♪ good morning. welcome to "worldwide exchange" on cnbc. happ