good morning. welcome to "street signs." i'm nancy hungerford. these are your headlines. investors in europe shrug off the records reached state side with the dow reaching the 20,000 mark ahead of the fed as janet yellen gets set to reveal what the outlook is for next year. allianz chief economic adviser mohammed el-erian tells us gels's fed won't be swayed by president-elect trump. >> in terms of the fed itself, i

don't think that they're going to be highly impacted by what mr. trump may say. what they'll be impacted by is how much of the market movements they internalize in their own projections. vivendi turns up to the pressure on mediaset, sending the shares to the top of the stoxx 600. but a media battle could be brewing as fininvest, mediaset's biggest shareholder, warns against a hostile takeover attempt. healthy discussions? actelion shares slide after the swiss biotech company says it is in strategic talks with an undisclosed suitor, as johnson & johnson drops out and a report suggests sanofi could be the winning bidder. good morning. welcome to "street signs." about an hour into the european trading session, a decent amount

of red across the european map with the italian ftse mib outperforming, but investors in wait and see mode ahead of the big fed decision where many people will be looking not just to the decision that many are thing will be the first rate hike this year but also janet yellen's comments for an indication of how many rate hikes quwe could get next year. softness in europe. looking out for uk unemployment due in 30 minutes. the german market off about 0.7%. the frank cac 40 softer by 0.36ers. and the ftse mib up about a quarter percent. let's dig a bit deeper into the sectors on the move in europe. investors continue to watch the energy sector. we got a pare back in oil prices

after comments from the iaeapro. oil is moving higher. travel, leisure, oil and gas are are in the green. banks have been the beneficiary of the rally stateside. all of this as the dollar has been holding firm. treasuries in focus as well ahead of that big fed decision. if we can look here among the expectations, because of course investors are watching that two-year, the fed sensitive yield, getting near six-year highs. but what is widely less known about the fomc meeting today is whether or not they will tighten and at what pace into the next year it ranges when you look at the various expectations among economists, when you look at goldman sachs, they're on the higher end. more hawkish end. goldman sachs is predicting about three rate hikes next year. when you all look at the

expectations of the trumpflation scenario, expectations of just two. fed watchers will be listening out for clues from janet yellen's press conference on that future path. stay tuned for that one later stateside. the trend in the u.s. equity markets has been to broadly drift upwards since the recession in the early in the 1980s. interest rates have been grinding down to zero. the big question is whether this month's rate hike could mark the end of the 35-year bull run for bonds. a fed rate hike today is a near certainty followed by two rate hikes in 2017, that's according to the findings from the cnbc fed survey. steve liesman has been guiding us through the details. >> first we asked our 46 respondents, why is this market up so much? 82% say policies from the new

president. what you see is that 56% believe the market is too optimistic about what they think is going to happen and when it's going to happen. 42% say they are realistic. and that's why when you look at the expectations for where the s&p is going, they're more muted than what's happened. currently 2256, or thereabouts, looking to go to 2357. big jump from the forecast back in november but looking to go less than they had previously. the market up right now, 2018 forecast, just about 9% higher. all this comes amid expectations for higher interest rates. you'll see right here the new expectation, well, they surpassed that since the last forecast. now it's 290 for the end of '17 and 344 for 2018. remind you again of the main findings of this survey. you can read this online at cnbc.com. 90% say the fed will hike tomorrow. 44% say the next hike in may and then they'll get done the second

quarter of 2019 at 292, that's 50 basis points higher than they had previously forecast. allianz chief economic adviser mohammed el-erian says the most significant thing will be the changes in the fomc expectations as set by the dot plot. we spoke to him in dubai. >> everybody is predicting 25 basis points. it will be a shocker if they don't do that. the key issue is what do they signal thereafter and how much of what has already occurred in markets today do they internalize. i think what we'll see for the first time is the blue dots will not migrate down. the blue dots will be relatively stable. market expectations are migrating up, so that means the fed will be signaling at least two hikes next year. >> that's the view from mohammed el-erian. we are joined by jordan

rochester and john taylor. thank you both for being here this morning. finally we get the fed decision. hard to believe. for a while it's almost like investors forgot about it over excitement about the trump reflation trade. it would be a shock if we don't get the hike today. you heard mohammed el-erian saying he doesn't think the dot plot will change much. do you agree? >> absolutely. there's some risk that the dots on the distributions, the core members unrevised, regional fed governors might raise expectations for next year that could be the signal we see tonight. >> what do you think? >> i think it will be difficult for the fed to increase growth expectations. they need to see what gets passed for fiscal policy. i wouldn't expect great changes to the growth forecast or to the dot plot. that's probably a story for first or second quarter of 017. >> do you think we'll see a pullback in markets? >> conditions could be there for

the markets to pull back a bit. if you look outside the fed, you had the ecb extend for another year. the bank of japan buying in the market again to suppress yields there. those global yield forces are dragging down and having an impact on the treasury market and everyone is looking for treasury yields to move higher. a little bit of disappointment, at this time of year when market liquidity is not hot, you could see a pull back in yields here. >> jordan what will it take to see a change in market moves? >> i think we have a rerun of last year's christmas dvd box set. the one annual fed hike, the christmas present we all get. it keeps us sober until the christmas parties going on next year. so dollar/yen, euro/dollar, a bit of a pull back. there's a lot of differences from last year but a lot of similari similarities. on the similarities, everyone expects a hike. so i think people will be looking at dot plots.

there could be a surprise. at the same time, most investors i speak with, most clients, the trade in the collar is not about the fed hike next year, it's about what trump's policies are. your survey you showed before this clip was about some people saying trump's policy agenda, markets are pricing it too optimistically. i think they're underestimating it. >> is that because of the uncertainty of what congress will pass when it comes to what tax reforms look like and what kind of stimulus he can get through? >> yeah. i think donald trump is a completely different president-elect. he's announced youtube videos saying what he'll do next year. no one has done that before. tweeting consistently about what he plans to do next year or his views for next year. why are we using the same tools to assess donald trump. >> which is one reason people are saying it may not just be janet yellen's press conference today that investors tune into, but what trump tweets. >> we start following donald trump. >> how does this play out for

you in terms of fixed income? >> i think over the course of 2017, i think u.s. yields could move gradually higher. we could move lower in the near-term. i think there's probably more exciting opportunities outside of the u.s. at the moment. in that trump reflation trade, other global yields got dragged higher. so with the ecb extending qe, the bank of japan doing their bond buying, slow growth and lots of other parts of the world, bonds there are more attractive than the u.s. is. >> i'm glad you mentioned kind of the carry-on effect. people following the moves in treasury, and then what mario draghi did last week, was it tapering or not tapering? the ecb will say it wasn't. i had a guest on yesterday who say they could do real tapering by the second quarter is that a possibility? >> i think it's a little too early. i think draghi did a good job

specifically stating it is not tapering. the fact they're in the market for a long time, which is a point kept reinforcing that. >> you cannot ignore the election risks going into next year, particularly the french election. how should investors position around that? >> avoiding french government bonds is probably the easiest trade to do. you had the italian referendum and spreads get to 200 over. they tightened a bit. french spreads are in the region of 30 basis points. if the market gets nervous about le pen getting in, you could see france getting to where italian spreads were prereferendum. if we get a fresh election shock what would that mean? >> in fx, we look about the dates. the premium you have to pay to hedge around the french election. this morning i heard a trader

talking about how the markets are taking the event premium out. i think that's a bit too early to call. in market terms, fillon is the front-runner. we were not talking about him a year ago. he will be the surprise. >> what is your outlook for the euro? >> will break parity sometime next year. how aggressively we do that depends on the first quarter. if we get political uncertainties that may push us over the edge. i don't think the ecb will taper. i welcomed mario draghi po's policy. it's not the same as the boj program, but i know ten-year jgbs won't go wildly everywhere.

>> if we get to 3% on the ten-year you could start to see some real problems according to liquidity according to some. do you think that's a possibility and do you agree with liquidity fears? >> yes and yes probably. i think we could get up to 3%. that's a bit further out. i think we've already had a bit of a flash crash in the u.s. treasury market going back a couple years. the liquidity in the treasury market is low. it's the most liquid market. even their liquidity is lower. we've seen the pain trade as yields have gone up. there's been losses on bond investors balance sheets. if we do see yields push up to 3%, fear could start to grab and people could blindly sell. >> jordan, the last word on this. if we get a fed consensus decision, being 25 basis point hike and then really an indication of two hikes next year what do you think happens to the dollar? >> dollar goes up. most people are trying to wait

for this event risk to go out of the way. the trade is about next year's fiscal outlook not monetary policy outlook. >> all right. thank you both. we want to hear from you. what you are expecting from the fed, how will it affect the markets? get in touch. streetsignseurope@cnbc.com. you can also find us on twitter. @nancycnbc. so much coming up on the show. it's not just about the fed. plenty of corporate movers this session. we will be talking velour versus berlusconi. fininvest followed vivendi in its media stake. generosity is its own form of power.

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. good morning. welcome back to "street signs." there are various media reports from aleppo that shelling has resumed in the city. this after a cease-fire was started yesterday. the delayed encampment was delay ed. bill neely has more on the civilians scrambling to escape the city. >> reporter: they escape to slaughter today, thousands fleeing aleppo's last battleground. the young and sick, the old and helpless besieged for months, trudging from the ruins of their homes. they fled a relentless onslaught from regime and russian forces crushing what's left of the east. but not everyone escaped. terrified civilians sending what they called their last messages. >> militias are maybe 300 meters

away. no place now to go. it's the last days. no word tonight of one child, 7-year-old bana whose latest message read "this is my final moment to either live or die. ""the horrors are clear on alep to stre aleppo streets. we can't verify this many or many claims, but the u.n. is alleging raging militias are executing civilians in cold blood. >> they've been going door to door, executing people on the spot. >> president assad's troops are celebrating victory over the symbolic city of the revolution and deny they're committing atrocities. as soon as people heard we freed this area, he says, they feel safe. by few can be safe, even as the regime boasts that aleppo's revels have stopped fighting and they'll be allowed to leave,

though it's not clear where, and that the battle here is over. the exodus of misery is not over, nor is this war in so many places beyond aleppo. bill neely, nbc news, beirut. elsewhere, according to the tanken survey, japanese manufacturers have found confidence in the past year. big corporates plan to increase capital spending going into next year. japanese government bonds have rallied after the boj increased bond purchases ahead of the fed meeting. let's get out to pauline chu. >> good morning to you, nancy. we didn't see a whole lot of direct reaction to that tanken survey on the nikkei which ended flat. even though business sentiment is at a one-year high, capital

expenditure plans are higher, but lower than three months ago. many manufacturers believe business conditions in the next couple of months will get worse. that's if you peel back the layers on that tankan survey. where are investors in the asian markets? many are sitting on the sidelines, thin trading. the nikkei at the flat line. the kospi at the flat line. the hang seng at the flat line. investors on the mainland rattled by the government clamping down on insurance companies making big bets on the market the only place we saw that risk-on sentiment was down under. the asx 200 up 0.7%. partly because of significant m&a activity which lit a spark under the consumer staples sector. there the nifty trading down 0.25%. metal and auto stocks under

pressure. that's a look at the asian markets and where we're sitting. another look at italian markets. incoming prime minister paolo gentiloni won an initial vote of confidence in the lower house of parliament. following the constitutional referendum loss by matteo renzi. he outlined his plan for office vowing the government was ready to intervene in order to guarantee the stability of banks. let's give you a fresh check on the banking shares. italian banks have rebounded from lows earlier this morning and are hitting their highest level since june. it is a bit of a mixed picture. unicredit off about 0.9%. unicredit was trading higher after shares closed higher by 16%.

that's why you could be seeing a bit of weakness there, just shy of 1%. italy's largest bank unveiled its strategic plan at the capital markets day. that strategy includes a 13 billion euro share issue, 14,000 job cuts and 900 branch closures. the news comes at a turbulent time among italy's banks over concerns about unicredit's profitability. and monte dei paschi siena said it received official communication from the european central bank rejecting its request for more time to raise capital. the lender confirmed the ecb said an extension could cause a further deterioration in the bank's liquidity. and moody's has changed its outlook to negative from stable for the italian wanks. they say the banks need to recognize additional

impairments, adding any failure to rescue monte dei paschi siena could further undermine confidence in the sector. vivendi has turned up the pressure on mediaset revealing it now owns 12.3% of the italian broadcaster and said it could raise that stake to 20%. the move has antagonized already tense relations between the french and italian media groups with fininvest calling the purchase a hostile takeover attempt. fininvest also bought over 27 million shares and said it would raise its stake to nearly 40% of the group's voting capital. you can see mediaset shares now higher by 5%. sanofi is in deal talks with actelion. a deal could value actelion at as much as $30 billion. this after johnson & johnson bowed out of the bidding as it was reportedly not willing to meet the necessary price tag.

after j&j's announcement, actelion said in a statement it was engaged in discussions with another party without giving further details. and monsanto shareholders have backed the buyer deal, the still requires regulatory approval to close. donald trump's election has raised questions about the outlook for large mergers, but chief executive hugh grant says his view has not changed since november and he has not engaged with trump's transition team about the deal. we'll be back after this short break. check out or world markets live blog. it runs throughout the european trading day. we'll have uk unemployment data straight after this.

good morning. welcome back to "street signs." i'm nancy hungerford. these are your headlines. investors in europe shrug off the records reached stateside with the dow reaching the 20,000 mark ahead of the fed as janet yellen and company look to raise rates. allianz chief economic adviser mohammed el-erian tells us janet yellen's fed won't be swayed by president-elect trump. >> in terms of the fed itself, i don't think that they're going to be highly impacted by what mr. trump may say. what they'll be impacted by is how much of the market movements

they internalize in their own projections. vivendi turns up to the pressure on mediaset, sending the shares to the top of the stoxx 600. but a media battle could be brewing as fininvest, mediaset's biggest shareholder, warns against a hostile takeover attempt. healthy discussions? actelion shares slide after the swiss biotech company says it is in strategic talks with an undisclosed suitor, as johnson & johnson drops out and a report suggests sanofi could be the winning bidder. good morning. welcome back to "street signs." we want to bring you some breaking data on uk unemployment figures. we're getting in the jobless count for november rising by 2,400 on the month. that compares to a reuters poll

of 5,500. you're looking at the uk unemployment rate at 3.8%. that is in line with forecasts. if we can get additional information here. we did see the employment fall, but wages are reportedly defying a brexit shock. averages were up by 2.6%. the three months to september they were unchanged at 2.4% that basic pay growth is coming in at the strongest since august 2015. so very interesting a day after we had the uk inflation data coming in higher than expected as well. we are expecting mark carney to speak later on today. let's look at how u.s. markets are set to open. the big story of the day is the fed, prarly when it comes to janet yellen's press conference a bit later on.

you can see the s&p 500 called just slightly higher by 1.7 points. the dow jones in the other direction, implied open of lower than 1.2. the nasdaq called just slightly higher. similar pattern to europe, investors are in wait and see mode. it was yet another record day for all three major indices on wall street. we will a good run on europe as well. just seeing some gains pare back across the board. let's give you a shot of the ftse 100, just off 0.2%. the xetra dax, a bit in the red. the french cac 40, down about 0.35%. and the ftse mib slightly in the positive direction. it would be a huge shock if the fed did not raise rates by 25 basis points. but the focus today will be on guidance. you can see pretty much flat

across the board here. the euro relatively unchanged against the green back. the dollar, similar story against the yen. sterling pushing just higher after that data. let's shift focus a bit and talk about ipo activity as we near the end of the year here. ipo activity did decline across the board this year. but the share of cross-border deals rose overall. this comes according to a new report from baker mcden kenzie. cross border deals accounted for 35 of the new listings. the new york stocks exchange was the only exchange to see growth in volume and value. notably the london stock exchange saw the biggest declines. joining us now to dig in deeper on this report is nick o'donnell partner of baker and mckenzie. let's talk about this report. specifically that line on the london stock exchange. why was london the big laggard when it comes to ipo activity?

is this all down to a brexit effect? >> brexit is a part of it. a number of events through 2016 have hit london hard. we had the market declines back in january. the ftse 100 taking strong limit 10% down in less than three weeks. then going forward to the yune 23rd brexit, the polls moving ahead of that, creating uncertainty and the unexpected result. in that atmosphere of uncertainty, the u.s. presidential election result hit london harder than we have traditionally seen for u.s. elections. so created a tough market to launch ipos all across the world, particularly in london. >> does this suggest it will be another tough year for london? the big factors are not changing. we still have certainty over brexit and donald trump has yet to take office. what is the expectation? >> there is more good news. there are reasons to be

optimistic. if you look at the calendar through 2017, we don't have the same schedule of events coming up. yes, there are french presidential elections on may 7th. german elections in q3 and q4, those events don't affect the london market in the same way. so i think there are a number of reasons why it should be more positive if you look at the italian referendum, and the impact of that last year, and the resignation of prime minister renzi, it's pretty muted. >> when it comes to new york's outperformance, specifically for the new york stock exchange, does this continue? if you look at the way markets are going stateside, so much expectation, this idea that trump will usher in an area of less regulation. do you think that will give the new york stock exchange an additional boost? >> i think it will. less regulation is a great point. you have to look on a sector by sector basis.

if you look at healthcare, pharma, life sciences, there are more indications from hillary clinton had she become president were indicating greater regulation. president-elect trump has not been making those sorts of statements, distancing himself from that. there's a great deal of buzz and moth mo more confidence around those sectors. >> president-elect trump did say in an interview with "time" magazine that he hasn't liked the way prices have done. again there are questions about what he will do with that and obamacare. investors wanted to know what are the hot companies you're looking at in the pipeline for next year? >> the hot sectors and the hop companies, you have to start with tech. that's all the sexy sector. >> a surprise. a bit of a dearth of ipos there. >> there has been. a tough market to get things away. looking to next year, the names

listed, you know, big names. dropbox, uber, snapchat. it goes on. where they all go, where all the big names go, i wouldn't think so but certainly one or two. when you get those one or two names, it creates buzz in the market. there are companies that are not on the 20 billion, $30 billion valuations but in the 100 million to billion dollar valuations that will go. talking silicon valley, which is the center of this. actually big growing tech companies across europe and increasingly in asia with strong equity stories. tech will be one sector to watch. >> you think snapchat goes next year if you were a betting man? >> that's one of the ones that are more likely to go. yes. uber has been chatted about a lot. snapchat more likely. >> when you hear from the likes of uber's ceo, they say we don't need to go public. they have so much funding on a private level that seems to be

the issue holding back tech companies from listing. it's not so much market turbulence but why go public when there's no shortage of private funding. >> absolutely. that's the big story with the uber story. there are lots of reasons why companies want to ipo. that's why big companies skew the story. snapchat is a little different. facebook trying to buy it for $3 billion no that long ago, now some of the valuations are $40 billion. and there is market deplanned for the demand for these companies. >> interesting that one of the largest -- two of the largest ipos in new york were coming from the asian markets this year. is this a trend you expect to ko continue? >> the asian story is part of

the long-term pivot of the global economy. we will see that. the ten largest cross-border ipos last year were all asian issuers, two of those into new york, the rest into hong kong. we have seen tighter regulations in the hong kong markets, and we don't expect to see a loosening of that. having said that, of the big exchanges for cross board ir, it border, it's london, new york and hong kong. >> nick, thank you very much for that outlook. >> thank you. speaking of tech, the heads of america's biggest technology companies are scheduled to meet president-elect trump later today. in an effort to find common ground after an exceptionally heated and contentious election. the need meeting is expected tos on job creation and the use of technology. executives scheduled to attend

are tim cook and larry page, along with venture capitalist and trump supporter peter thiel. >> bill gates already had a chance to speak to president-elect trump. the microsoft cofounder recalled his recent conversations with donald trump. >> i had an opportunity to talk to him about innovation. a lot of his message has been about things where he sees things not as good as he would like, but in the same way that president kennedy talked about the space mission, got the country behind that, whether it's education, stopping epidemics, health breakthroughs, finishing polio, and in this energy space there could be an upbeat message that his administration will organize things, get rid of regulatory barriers and have american leadership through innovation be one of the things that he gets

behind. >> bill gates may have struck a note of cautious optimism on the incoming trump administration, however the president-elect's latest cabinet pick is already stoking divisions within his own party. kristen welker has the latest. >> reporter: tonight president-elect donald trump likely setting up his first confirmation fight with members of his own party. officially tapping rex tillerson to be his secretary of state, touting what he calls tillererson's deep understanding of geopolitics. the pick praised by condoleezza rice, bob corker. still some gop senators wary of tillerson's ties with russia. marco rubio saying he has deep concerns. >> he's very good at being a diplomat. the good lord did not pit oil in all freedom loving democracies across the world. yet rex tillerson was able to make this work.

>> reporter: it comes on the day of what is perhaps mr. trump's most surprising meeting at trump tower yet, kanye west. west uncharacteristically tight-lipped today. >> i want to take a picture right now. >> reporter: later tweeting he wanted to discuss multicultural issues. it's not clear if west will have a role, but rick perry now poised to be tapped for energy secretary, the very agency perry famously forgot during a presidential debate. >> the third one i can't. sorry. oops. >> reporter: trump announcing tonight his adult sons will manage his business interests and no deals will be done during his term in office, a vague statement raising more questions. >> these things have a cumulative effect it would serve him well to be the more transparent the better. >> speaking to cnbc earlier, ian bremer questioned president-elect trump's handling of foreign policy. >> you have to be worried that

he is not really capability abl showing nuance. as a businessman that's fine. you work to get the hardest deal, you make more money that way. there needs to be diplomacy in your foreign policy, and trump's willingness to go out on a limb himself before he had a secretary of state, before he had an asia team and said i will take that taiwanese president's call, i will question the one china policy, i don't believe trump has the policy chops to know the implications of what he's been doing. as we've been telling you, markets are pricing in a fed rate hike today as a near certainty. but questions still loom about president-elect trump's impact on the economy in 2017. steve liesman has the latest from the cnbc fed survey of some of the nation's top economists, market strategists and money managers. >> reporter: this group was positive on donald trump's potential impact on the economy

before the election, less positive about his effect on stocks. they had that wrong. now we asked them to take all the policies what you know about trump's policies what do you think the effect will be on employment? increased somewhat, over 50%, nearly 60%. stocks somewhat as well. overall growth getting a little warmer now. also increasing inflation, increasing deficits. also increasing bond yields. we asked for views on individual policies. some changes. very positive in general. 76% like the individual tax cuts out of the 46 who responded to the survey. 89% love deregulation. they really, really like business tax cuts what they don't like, they don't like trade and trump's trade policies at all. i want to show you, we asked specifically about this issue of putting tariffs on companies that send jobs overseas. we sent a contingent of art

stach staff to put graffiti on this container, 60% said he can't do that. 27% did not know. over here, another paint job, 85% say those tariffs mean lower growth for the economy. 9% believe in what wilbur ross and others have said, increased growth. a couple comments we got, lou green said i think trade policy will be a key aspect of trumponomics. and at the national retail federation, jack kleinhouse says trump's opposition to the tpp, nafta and tariffs on imports could drive up the price of goods. so positive on a lot of stuff but negative on the trade outlook. coming up, has britain's wine retailer lost its fizz? we'll be joined by majestic wine's chief executive after this short break.

. good morning. welcome back to "street signs." hertz has appointed volvo and general motors board member katherine maranello as its new ceo. she will take over at the start of 2017. at the same time the rental car company said it will reduce the size of its board. investors failed to cheer the update with shares falling in after-hours trade. and google's self-driving car program will become an independent company called waymo. it signals a drive by the company to monetize the extensive research conducted during the project.

alphabet shares up just shy of 1%. and wells fargo failed the so-called living well test for the second time this year. regulators have found that the bank does not have a sufficient plan in place to protect markets should it go bankrupt. officials punished the lender by limiting its rights until it submits a revised plan in march. it caps a tough year for the bank which saw ceo john stumpf resign. wells fargo lower by 0.6%. goldman sachs planning on naming david salomon and harvey schwartz as co-presidents. they would fill the role vacated by larry cohn. this is a fun story for all you wine lovers. glass half empty or half full? that is the question for majestic wine, britain's biggest wine retailer. shares lost more than a quarter of value in september after the

company reported a pre-tax loss of $5 million saying a weak commercial performance and a failed u.s. marketing campaign were to blame. joining me now is rowan gormley, ceo of majestic wine. good morning. >> good morning. >> you talked a lot about change you're expecting for next year. perhaps that's a good thing when you consider the performance of majestic at the end of the year, specifically that 25% drop in shares after the profit warning. what does 2017 look like? >> i think there's more uncertainty in the world today than we've seen for a long time. the only way we can adapt to it is by actually sticking to the plan. the plan is to be obsessive about customer loyalty. continue to provide the base service for people wanting a wine specialist. and, you know, markets come and go. trends come and go. fashions come and go. if you keep looking after your

customers, they will continue to look after you. >> when it comes to looking after customers, how concern are you about price sensitivity in the aftermath of brexit, it seems almost inevitable you have to raise prices on bottles. you have already? how much further do you expect to go? >> i think it is inevitable if the pound has a sustained fall against the euro that will have to be reflected in the price of oil and wine. all kinds of exciting liquids. i'm sure that all retailer also have to pass that on. wine is a low margin business. there is no immediate change in prices. who knows what the euro's gain will be when the hedging expires and we need to look at prices. and we are a value proposition. prices are important to people.

in many ways that plays into our hand because majestic are value offers to the customer. >> let's talk about naked wines. you had difficulty there with the marketing company in the u.s. what is next for naked wines as you try to expand? do you see the u.s. as a valuable market. >> we see the u.s. as a valuable market. it's seven times the uk, it's growing. the margins in the u.s. are strong because you have a regulatory environment which protects wholesalers and keeps margins high. if you look at the world market for wine, the u.s. is 12% by volume, 22% by sales. cracking the u.s. has to be a great concern for us. >> you talked about the broader concerns on the low-range wines. on the high-end are you seeing an uptick? >> yes, we are.

if you go to the fine wine end, it's a market denominated in international currencies. euros and dollars. with the decline of the pound, there's more international demand for inventory held in the uk, bought in sterling, which now looks like extremely good value. >> for all of our fine wine lovers out there, perhaps family members of those looking to buy a gift for christmas, what's the best wine to be buying? >> the best wine is the wine that suits you. i would urge you some good advice. the wine i'm drinking this christmas is from our fine wine blend, a spanish swine called vegas ascilia. one of the first wines i ever tried when i started getting into it. i remember taking a glass of it thinking, right, that's what all the fuss is about. >> very interesting. for the average wine lovers like myself, what should we be

serving at christmas dinner? >> depends what you're having. the best way to find out is go in and do a tasting at your local majestic. we'll have 20 wines open. if you're having roast turkey, nothing goes better with roast turkey than a bit of chardonnay. >> what do you expect to be the best vintage this year? >> the 2015 vintage in burgundy is exciting. that's just coming on the market for fine wine lovers in the next weeks -- next days, actually. that's been the best vintage in years and years. that will be really powerful. >> fantastic. thank you very much for joining us. rowan gormley, ceo of majestic wines. let's give you another check on how european equities are faring just two hours into the trading day. we are still seeing some red arrows across the map. keep in mind investors are in wait and see mode ahead of the

big fed decision stateside and janet yellen's press conference. everyone wants to know if they will change guidance when it comes to the dot plot, whether we will get hints that the fed will be more hawkish and upgrade the dot plot. the ftse 100 lower by 0.3%. same story for the xetra dax. the cac 40 off about 0.53%. and a look at u.s. futures. that's it for today's show. i'm nancy hungerford. "worldwide exchange" is coming up next. generosity is its own form of power.

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good morning. today is the day, the most important fed announcement of the year just a few hours away. we'll set up what it means for markets. and tech meets trump. the president-elect's most outspoken critics making their way to his turf for a meeting today. and china issuing a stern warning to president-elect trump's recent criticisms. a live report from beijing on the way. it's wednesday december 14, 2016. "worldwide exchange" begins right now. ♪