♪ good morning everybody and welcome to "street signs." carolyn's with us as well. sterling this morning falling after teresa may is saying she has no plans of keeping bits of, eu membership. donald trump accepts russia conducked cyber attacks but says only stupid people would question closer ties with the kremlin as the president elect won't punish moscow. >> they did not succeed in

embarrassing this country and throwing the election of donald trump. let's make a deal. vw shares get a boost after report that german automaker could be nearing a deal with the u.s. justice department and shares of lufthansa over challenges to earnings growth. ♪ good morning everybody. and welcome to the show. very glad to be back and glad you're all with us for this hour. still a new year for many of us. the stock share of 600 opening to slightly mix hadded this morning as you would have seen edging just a little bit lower despite the positive data from germany. a 2.2% rise in the year to november. a 5.6% rise in exports as well. that was quite a bit better than

anticipated. in europe we're still just moving a little bit lower. when it examines to some of the sectors and our main markets that trend is reflected in the markets. autos bucking the trend. with regards to some of the auto sales figures looking quite perky. basic resources higher and telecoms off by right around 1.3%. we'll be talking more about what broad band speed a little bit later on in the show as well. >> it's live tv but we fixed it, luckily. >> very glad to be back. >> happy new year to you. >> happy new year to you. >> we were toiling it away last week. let's talk about some of the auto news. the fbi has reportedly arrested a volkswagen executive. authorities took in him in who

led the compliance office in it u.s., accusing him of defrauding the united states. his arrest mark as significant ramp up of the criminal investigation into vw's emissions cheating scandal. the head of the volkswagen brand says auto maker hopes to settle the probe as soon as possible. >> now shares invokes wagon heading towards the top of european trade but hitting the highest level since september of 2015. this after some of the reports that the german car maker is moving ever closer to the u.s. justice department. and also hit almost 6 million vehicles up by 2.8% thanks to significant grossing especially in china. sterling is slumping after uk prime minister indicated that britain will leave the eu single market and seize rr not interested in keeping quote bits

of the membership. may said she wanted to get a deal with the rest of deal to get better control of immigration. >> it's wrong to look at this as just a binary issue. as you have control of immigration or a good trade deal. we will outside the european union be able to have control of immigration and set our rules for people coming to the u.k. from member states of the european union and as part of that brexit deal will be working to get the best possible deal with the european union. >> the prime minister went on to say that she will be setting out her brexit strategy in the coming weeks and her brexit plan was muddled. while may admitted that the government had been taking its time, she argued that it is about getting a fair deal. and ja head of ethics strategy. >> good morning.

>> i wonder why does the currency market react this way? because what we heard wasn't entirely new. >> it's not entirely new but it's an afferimation of what she said in october when she started to amplify this presumption of a hard brexit scenario. and in a sense what we're seeing now is that as far as sterling is concerned, it's a battle between politics and they're seen to be negative predominantly by markets and economics on the other where we've seen pmis. consumer credit being very robust. this morning, prime minister may has really amplified and sterling is trading accordingly. >> let's get back to the politics side for sterling. how long can she get away with not offering any major details on brexit and how long will the currency market give her the

benefit of the doubt? >> well, they've stopped doing that and in a sense we have that clock ticking to that in march deadline if we're assuming the government follows through with its word which goes back to that stop watch of prime minister may in october. and of course we have other variables at play. we're waiting on the supreme court judgment on article 50 as well. and clearly markets are looking for more information and whenever we get that from the government, or the prime minister and i think that's a distinction. there are different strands of government. but from the prime minister's perspective it seems the primacy of immigration control and that's a negative for sterling, and macroeconomic performance accordingly. >> we were at 145 before the brexit vote. we're at 121 and a bit. what do you think happens over the next couple of months? >> as you see the politics play

out, it's still going to be relatively challenging for sterling. having said that. i think there's opportunity for that political risk to play out again. back in the beginning of this year is reasonably encouraging and they will look to sell any sterling rally. we'll see them examining under pressure against the dollar and i think we will see euro sterling continue to grind higher and once we get to 87 and a quarter, that might be the near term top. >> the long dollar, short sterling, given trump coming into office and we could be looking at strong dollar continue sng. >> i think the problem for the dollar side of the equation is i think we've discounted a lot of the good news and there's a lot of political risks still and we'll see how that plays out. yes, we assume there's going to be oo fiscal expansion and tax

cuts but how soon that impacts the economy is a mute point. one of the things is we see the dollar having a good start to the year but i wouldn't expect that to be extended and i think the fed meeting was in that regard and i think there is a presumption that allowing the dollar to continue to strengthen will mitigate the growth story in the u.s. u.s. dollar up in the first quarter, maybe part of the second quarter, but i wouldn't extrapolate that trend throughout the year. >> a little bit disappointing on the headline number under 156,000 jobs created in the month of december. and the wages number is the best since 2009. how much further, because we're close to 3%er that the fed would like to see. how much further can we expect the fed to talk up the economy to let them over heat it? >> in terms of the labor market, because of the resilience of the

labor market and creation of jobs, we shouldn't expect enormous month to month increases. it's well in excess of the 100,000 required to continue to create jobs and bring down the unemployment rate. we're seeing signs of earnings growth ticking high and that cause as little bit of concern. i think that's one of the thing m themes that had been in play. we're starting to see that and that's one of the reasons i think the fed will be consistent of their mandate of looking to tighten policy a little bit faster than we've seen in subsequent years. i think a lot of that is already discounted in the market. i don't think necessarily that in itself is going to be the catalyst to see the dollar go up exponentially. i think that's still the case on the presumption the growth story

is reasonably constructive. and we've seen a slight change compared to last year and i think there is still a relatively strong case as things stand now to play out in terms oof that three hike scenario. >> how are you getting home today? >> i do take the train so hopefully i won't be dependent on the tube that's not running today. >> london is set for potential travel chaos. members of the tsa unions and they plan to close ticket offices on the underground. they've warned that the majority of underground stations in central london will be closed due the walkout 6:00 local time tonight. the mayor of london called the strike pointless. i've been looking on tweeter and people

writing things like spare the thoughts for the tourists without the pick dilly line. they're 50 seconds apart. you can walk it. >> very true and it's not as cold as last week so shouldn't be so bad. >> i have to say it's very irritating the strike but i like people to be at the ticket offices. because when stuff goes wrong and you can't get through, there's nobody to ask. mobile pay, whatever. mine doesn't work. what do i do? do i jump the thing? do i walk to the next station? >> always walk to the next station. >> that's what i'll do. >> let's talk politics in italy. and grillo has ask writing that he has achieved its political goals and the group no longer has a common objective. instead he has pushed for a new coalition with liberals and

democrats. the former belgian prime minister has declared his fwrid the presidency of the european parliame parliament. he's leader of the alliance for liberals and democrats in europe will compete with the european people's party and geony putella for the post. a german vice chancellor has signalled his had central left democrat could form a coalition with the environmentalist in an interview, he said quote we don't want a new edition of the grand coalition. it faces an election in september of this year has been in coalition with spd since 2013 and they say they don't want be

to in a coalition with mackle's party and simply don't have a choice. come election day and we'll see if the spd wants to be in power, they have to partner up and the story next is the election. >> there's more to it. gab real saying her fiscal policies could lead to the break up of the eu. it's raised serious political risks and contributed to the rise of poppialism in those countries and added that the idea of the eu breaking apart is no longer unthinkable. former french prime minister has lost his lead over rival ahead of the country's socialist primaries. a poll published showed the former minister is slated to win 52% in the case of a second

round vote on january 29th, while a second poll published said montebourg would win 53% of the vote. the actress as usual,@cnbc.com and we're all on twitter. you can tweet us directly of course. >>@carolyn cnbc or@louisa boysen. and it's two years since apple revolutionized the iphone. we'll discuss after this. with the xfinity tv app,

anything with a screen is a tv. stream 130 live channels. plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. ♪ hi everybody. welcome back. you're still watching "street

signs." >> mcdaonald's has sold a stake in its chinese business. mcdonald's's retaining 20%. let's check in on the broader markets out of asia. singapore and japanese markets aren't trading today. it closed for a holiday. >> that's correct. it's the coming of age holiday in japan. so tokyo markets are closed and the main asian markerates probably pushing higher even though tokyo is closed. the shanghai composite up half a percent and we saw that the rally there was led by defense stocks as they continue discussions about mixed ownership as part of state reforms there and the yuan was in focus after the volatility we saw over the weekend. and the fs reserves down to 3.$3.01 trilli

as china continues to try to prop up. and let's take a look at the asx 200. the fifth straight day of gains. financial and hairk stocks leading the way. and earning season gets underway. and the concern is that prime minister mody's drive to ban the 500,000 rupy notes at the end of last year put a dent in consumer demand and had a knock on effect of corporate earnings. but we're seeing corporate earnings season getting underway back to you. >> thank you, very much. now shares in lufthansa have been flying even higher as the company's trading out look disappoints. the stock hitting a two month low and unit revenue will fall.

good body stock brokers called the out look under-whelming and others saying earnings growth remain as challenge. >> and they were concerned that yields will remain depressed in 2017. and the u.k. government has further reduced its share in the bank. david richie is stepping down just days after a profit warning. he missed its completion target. financial director will run the business until a replacement is found. shares are languishing at the bottom of the stock 600 after the german dialysis provider received a subpoena from prosecutors investigating the ties to the american kidney fund which helps patients pay

for kidney dialysis. and hit by unexected football and horse racing results in december. the operating profit came in at 260 million pounds. that's at the lower end of the guidance range. >> dialogue semiconductors jumped by 5% according to the german listed firm's preliminary results which showed full year revenue at $1.2 billion. apple ceo tim cook has taken a pay cut after it missed isz profit goals. his total compensation was down from the $10.2 million he received in 2015. i'm not sure we should feel sorry for him. >> still a lot of money. but they've completely changed the world and on this day 10 years ago.

10 years now, apple's founder, steve jobs unveiled the company's very first iphone. and jobs announced that apple was reinventing the phone and from the last 10 years to the year ahad head now our next guest says brexit britain needs to super charge its broad band inf infrastructu infrastructure. dave millet is a director at eq equinox and here with us this morning. 10 years since the iphone and it's completely changed the way we look at the industry. >> and blackberry, 10 years ago. hundreds of billions of pounds of turnover and now a fraction of that. so the world is changing. >> and that means we need these high speed broad band connections to work. fiber-optic conctions to work. they don't in the u.k., is your point. >> they don't. the u.k.'s language is about 50th in the world for 4 g

connection. bottom in europe for fiber to the home. fast super broad band going directly to the home. we're lagging well behind the rest of the country. partly you could blame b.t. because they focussed on residential homes not for connecting businesses. trying to sweat their corporate assets. the government is far behind many other countries. >> i find it curious that whenever i land in south korea, you have 5 g and you land in eeth row, it takes ages and then it's mediocre 4 g. but with brexit, is it possible that the gufrmovernment is goin neglect this even more because that's not on their list of priorities. >> if you look at hammers and nails recently, compared that

with south korea. now it's 1.6 billion to get 5g ready by 2020. and recently said the aim of the u.k. was 2025. >> and it's expected to reach 2.3 trillion pounds by 2025. is the u.k. ready to have the internet as a daily part of our lives if we don't have the right infrastructure? >> gardner said about 20 billion devices globally connected. driveless cars, if you don't have good 5g, you can't have them. nearly 8% of u.k.'s road have that coverage. it's not just that. augmented reality. we all got caught up in the pokemon craze last year but there's many business applications. you're looking at a house, the floor plan could come up and you

can look lat of that. you do need that connection if the internet is going to take off. >> had hin my small flat i decio dedicate an entire room to an office. it's an office. set up the office, etc., etc. no internet connection. it's not stable enough for me to use it. so i have to carry my laptop into the living room every single time. it's ridiculous. but just because they've announced measurers, it's going to take a lot of time. >> and that's setting an ambitious time scales. if you look around the center of london -- and not just london. there is just no fast broad band unless you're prepared to pay top prices which hurts small businesses. so if you're looking at the attractiveness of the country, why can't you play 50 pound when money companies are having to pay 5 or 600 pounds a month.

>> you say free services like what's app. >> it enables people to talk abroad for nothing, comparing that with roaming. they're going to lose their roaming revenues later this year. so the challenge for many of these services, really unless they have media content as part of their revenue stream, they're going to start seeing pressure from these free to air services. >> thank you very much. director at equinox. remember the time you thought twice before calling somebody abroad because it cost money and now you just do a whatsapp call. >> and i believe june or july of this year you're not going to pay roaming in u.k. >> huge. >> and check out world markets

live, our blog that runs throughout the european trading day. we will be back in two. don't go away.

welcome back to the show. yes, you're still watching street signs. >> i'm louisy and your headlines this morning. teresa may has no plans of

keeping a bit of eu membership. donald trump accepts russia conducted cyber attacks during the u.s. election but says only stupid people would question closer ties to the kremlin. he won't punish moscow. >> they attempted. they did not succeed. they did not succeed in embarrassing the country and throwing the election of donald trump. let's make a deal. vw shares get a boost off the report that the german automaker could be nearing a deal with the u.s. justice department. and ridsing fuel costs and challenges to earnings growth. and let's have a quick look at the currency markets and a

pound against the uk's dollar. this is on the back of teresa may's comments saying that they would -- britain would leave the eu single market rather than trying to keep bits of the eu. those comments are not necessarily new but once again they're a stark reminder of where britain is headed. we saw a fairly strong u.s. jobs report. that was below expectations but wage growth was the highest since 2009 and that's epihhelpi some of the u.s. dollar. and we're seeing the ftse 100 up by 0.3% thanks to the weakness and pound sterling. elsewhere some profits being taken. the ketra dax despite the fact we saw better german industrial numbers. and ftse also seeing modest

decli declines. we are seeing a bit of a mixed picture. the dow jones set to rise by 6 points and the nasdaq to the tune of five points. this after we saw another record on friday for the dow, the snp and the nasdaq. let's get out to nancy who joins us from the goldman sacks strategy conference in london. nancy. >> thanks for that, carolyn. and the big question heard here at the goldman sacks conference is how much further does the it reflation trade have to run. i'm joined now by peter oppenheimer who is the chief global equity strategi strategist. on that question, investors nin u.s. on friday were trying to get above that 20,000 mark in the dow. but investors seem more keen on the s&p 50500 levels.

>> well, we think it is going to be a bit of a play of two halves in a sense. we think the momentum behind the rally will continue and we expect the s&p to reach 2400. but to come down through the second hamp of tlf of the year around 2300. so relatively modest return over the year as a whole in the u.s. and better returns in other markets. >> and the sector that have specifically enjoyed a run, key bank earnings due to kick off at the beginning of this week. do you think financials have further room? >> we do. one factorer is how chief financials reached before they started to recover and the second half of last year and they have the most to benefit from a more reflationary environment and in the case of the u.s. as well.

a more regulatory back drop as pep. >> and over here in europe. why? >> well, european accounts have had a particularly bad performance through the financial crisis. they've been at the ep center of it in europe. the risks of more negative interest rates are fading. a steeper yield curb is certainly helpful for banks in europe as it is in the u.s. as well. and some of the politically related concerns around capitaled a kwacapital ed ad kwaes in the banking system peeking out and they have really been held back by many, many concerns about capital ad kwaes and to continue to be more negative and as that situation changes, there are more opportunities. >> you touched on the regulatory environment of the u.s. to

become easier. will that be an impetus for european regulators to care about. >> i think the important part here is marginal differences. it's that it may be less -- more confidence. s the rr not going to be further tightening. or further requirements for the banking system. i think as there's more confidence as bank balance sheets are strong enough and it's strong enough in europe. that clearly helps given the valiations that we reached. >> in europe and globally, the name of the game has been the search for yield. is that about to change and if so where, do you go? >> there really have been two things at the center of invester's focus and they reflect two things that have been scarce. we've been in the zero rate

world and that's shifting a bit and the growth has been so weak, particularly in europe. and we're starting to see improvements there as well. the combination make as search for divdnd growth a very attractive strategy. so moving away little bit on the focus of yield. lots of companies are starting to grow their dividends. we think talts hat's being underpriced by the market. and you can find those companies across the different sectors and backed by sustainable payout ratios offer quite an attractive total return, we think. >> the real star of the european trade in equity has been the ftse 100. and fears over a hard brexit. do you think this index continues to push higher or at some point will the sheer fear of what a hard brexit actually means for growth for some of the

corporates have a knock down effect? >> the ftse 100 is a unique type of inthe deks in the sense it doesn't really reflect what's happening in the u.k. very much. 80% of the revenues are outside of the u.k. and there are other factors as well. it has a very strong component in the resources and oil sector and quite a lot of banks that have been recovering too. a combination. it's been helpful. we think that will probably continue. but we do think domestically related companies in the uk will have a tougher time as you get higher inflation, higher costs coming through and more concern about further slow down as the brexit negotiations come through. >> over at goldman sachs you're

not quite as bullish, yet you are overweight this sector. >> our commodity analyst had a good call on a shorter term tactical rebound on the oil price as they expected a cutback in production but at the same time of course the shift in the supply curb, the technological innovation in the industry means new supply will start coming on incent vised by higher prices, which is wie we don't see long dated oil prices rising very much. the sector itself offers reasonable value. a very high dividend yield and we believe that offers some potential for investors at the current time in europe. >> thank you so much. that is peter oppenheimer chief strategist over at goldman

sachs. and looking for opportunities in what is very much a changing paradime in world markets. let's turn to politics. president elect, donald trump has accept u.s. intelligence agency pfs conclusions that russia attempted to influence the election. priebus says they acknowledge russia was responsible. this after the president elect met with top u.s. intelligence officials about the matter on friday. priebus comments come amid comments for the president elect to accept the findings of u.s. int intelligence agencies and they called for a response from both republicans and democrats. >> we should all, republicans and democrats, condemn russia for what they did. to my republican friends who are

gleeful, you're making a huge mistake. when wikileaks released information that put our troops at risk, most democrats condemned, some celebrated. most republicans are condemning what russia did and if you are celebrating, you're not a patriot. >> senator john mccain says they pose a serious threat to the u.s. >> it isn't just elections that they are hacking into. it is across the board, including military secrets that we have, including the ability to shut down satellites, including the ability to shut down power plants. i mean, they can do grave danger to the united states of america. we never tried to do anything like that. >> this week of course kicks off confirmation hearings for many members of president elect's cabinet.

>> reporter: starting tuesday marathon confirmation hearings, a parade of nominees, some with billions in wealth. >> the american public must make sure that there are no serious conflicts of interest. sfwlr >> reporter: first up, jeff sessions. on werngdnesday, rex tillerson, once honored by vladimir putin. election hacking likely on the agenda. top trump aids still clarifying the boss's position. >> he's not denying that entities in russia were behind this particular hacking campaign. >> reporter: democrats charging mr. trump with ramming his picks through congress as they express great concern about incomplete background checks. ongoing tension since november revealed an email from the james madison project. we seem to have lost contact

with the trump-pence transition since the it election. . >> the office of government ethics, which is nonpartisan, has always done a thorough vetting of cabinet nominees before they've a hearing. >> we need to grow up here and get past that. we need to have the president's national security team in place on day one. >> reporter: mr. trump set to hold a press conference on wednesday saying he'll take questions on his businesses, presidency and perhaps so much more. ron allen, nbc news, new york. and boris johnson has travelled to the u.s. to meet with senior advisors of president elect donald trump, marking the first formal meeting of u.k. minister and members of the incoming administration and the visit comes hours after trump tweeted that he is very much looking forward to meeting

prime minister therese aeresa me spring. crude prices are lower following a surge in iranian exports. iranian oil fell from 26 million at the beginning of october. teheran is exempt from a cut. >> if it's exempt, that would mean any ramp up in production shouldn't come as a big surprise to the market, right? >> it shouldn't. they're allowed to get back the levels they were at before the sanctions were put on them but it's also a strong dollar, right. >> and still coming up. mixed news for vw as the share price recovers, other problems strike.

hi everybody and welcome back to "street signs." the fbi has reportedly arrested a vw executive on conspiracy charges. he led the car maker's compliance from 2014 to march of 2015, accusing him of trying to defraud the united states. this is a ramp up in the criminal investigation of the volkswagen's emissions scandal. they hope to settle the prone as soon as possible. hitting their highest level since september 2015 after reports say that the german automaker is nearing a deal with the u.s. justice department. the brand deliveries hit nearly 6 million vehicles and shares up

by 4%. mercedes benz appears to have won the it race over taking bmw. they sold more than 2 million passengers cars in 2016 thnks to a 6.6 rise in china and a rise in europe. they're due to release their annual figures today but to have lost the premium sales crown which it held since 2005. fiat chrysler creating over 2000 jobs in response to president elect donald trump's threat to import new taxes on imported vehicles. they will build new jeep models and could move production off a heavy duty pick up truck from mexico to the states. the latest self driving system saying it's more reliable and affordable. according to the ceo, it include

as raft of nuisancers including an enhanced vision sensors. it's so far reached a deal with chrysler. jane gray from the detroit motor show. good to have you with us. so what's hot in detroit at the moment? >> reporter: good morning. well what's hot is what the manufactures will roll out this week. it's the most prestigious car show in the world, according to those who throw it. and what's drawing a lot of attention is the state of the industry is on a fast lane coming off the seventh straight year of record sales. $18 million over last year's sales. but also it's not what is under the hood that is attracting a lot of folks here, it's what's inside the car and i say

technology, high tech, connected cars, cameras. and those autonomous self driving cars, that's something most manufacturers are dabbling in right now and most believe will be a reality in the next 5 to 10 years. it will have self-driving cars as a part of our daily commute. it's in the distance but something everyone here has their eyes and focus on. when you talk about the industry, a reinvestment of american plants, ford, fiat, chrysler both putting a lot of money and building jobs in american plants. something we haven't seen over the last several years and they say it's a result of how well the industry is doing right now that they can do something like that. a good time to be in the car business and a great time to be in detroit for this show, ladies. >> we've been eyeing the little red model there to the left of you, behind you. >> jay, thank you very much.

>> not that, but i took a look earlier. there's no place to put a car sfre seat for my kid. >> the roof, jay, the roof. we'll see you soon, jay. thank you. don't miss cnbc's coverage of of the detroit ought so show later today. let's talk farma. they will acquire nearly $1 billion from merrimack for a pancreati pancreatic cancer drug in the united states. dilute its numbers this year. >> johnson and johnson reportedly asked the swiss take over board to over view a complicated structure.

they would split the commercial arm from its r and, d business. share said up by nearly 30% since rumors of a take over surfaced in november. and here that jp morgan health care conference and speaking to the ceo and chairman of johnson & johnson alex gorsky. and along with other great guests live from the so-called woodstock of health care. it was a record seven awards for "lala-land" and the politically charged golden globes in hollywood. >> "la la land." >> reporter: it was a perfect night for "la, laland" including best musical or comedy. and acting honors for ryan

gosling and emma stone. on the drama side. a coming of age story set in a dangerous miami neighborhood took top prize, while casey afflec won best actor for "manchester by the sea." and even more surprised the actress 23r "elle." donald glover won best actor and best tv comedy. and the netflix series about queen elizabeth ii won best drama and the actress winning best actress. best actor in a tv drama went to billy bob thorten while tracee ellis ross won for "blackish." and the cecil b. demill award. >> hollywood is crawling with

outsiders and foreigners and if we kick them out you'll have nothing but football and mixed martial arts which are not the arts. jimmy fallon opened the show with a musical nod to "l "la laland. ". i actually started watching "the crown" last night and it is really good. it's one of netflix's most expensive ventures yet. >> you got through the whole -- >> yeah. yeah. >> i start and i stop. i never get through -- >> you haven't understood the it concept of binge watching yet. >> i did and that's why i don't dare again. >> i want to see that too. >> it's not often you see a musical getting that many awards, right? segway to the markets, maybe

"la la land" on the sterling. and this follows teresa may's comments that they would leave the eu rather than try to keep bits of its membership. the u.s. futures and how you should be looking at the u.s. markets and 4 1/2 hours until we open. a couple of points higher for the dow and the nasdaq. the u.s. ending last week at record highs. that's it for today's show. >> "world wide exchange" is exintex exnext up. have a lovely day we'll see you tomorrow.

good morning "markets now." slump following teresa may's latest brexit comments. why gm's not caving to donald trump's criticism. and it was a record breaking evening at last night's golden globes. it's monday, january the 9th and "world wide exchange" begins right now. ♪ good morning and welcome to "world wide exchange" on cnbc.