good morning, everybody. welcome to "street signs." i'm louisa bojesen. your headlines today -- banking beat. julius baer's profit tops estimates, sending profits there higher. boris collardi tells cnbc the bank sees an ideal trading climate under president trump. >> we can do our job as bankers, talking to our clients on a daily basis and telling them what to do.

we've seen that in the second half of the year and the fourth quarter that trading volumes have picked up. a big gain for the apple food chain. shares in european suppliers get a boost, as the world's biggest listed firm posts record quarterly revenue. racing ahead. volvo shares accelerating to two-year highs after fourth quarter profits hit second gear. and veteran conservative ken clark mocked the government scramble for trade deals regarding brexit. good morning, everybody. welcome to "street signs." very happy you're with us for this next hour. want to get you the data just hitting our wires. the eurozone pmi figure for january, 55.2. which is just a tweak above the

flash estimate of 55.1. reminding ourselves that the final reading for december, 55.9. we're a bit above that level. it's the highest level seen since april 2011. the final manufacturing future output pmi, 66.9. that's higher than the flash estimate. eurozone kicking off 2017 in a solid mode with the fastest growth in almost six years. euro trade, 1.0759. heating up in europe what we're seeing on the european equity markets, we opened to the upside and hanging on to the gains, just shy of 1% on the stoxx 600. that's across the equity markets this morning, too. as we are seeing our european bore bourse trading up to the

upside. all up by a percent or so. some lower than that. the ftse mib up just -- playing catch up with the likes of the ftse 100 and the xetra dax. when it comes to sectors out there, industrials, telecom up 1%. basic resources up by almost 2%. 1.6%. here you are seeing buying back into commodities on the back of this dollar weakness. copper near two-month highs at the moment. a lot of speculation about whether or not this will continue or whether it's just a move we're seeing for the time being. let's move on and talk about some of these specific stocks that we're watching this morning. shares in julius baer have been trading sharply higher after adjusted net profit more than doubled in 2016 topping estimates. assets under management for the year grew by 12% hitting a record high of 336 billion swiss

fr nashgs frncs. earlier we spoke to boris collardi. >> flows are on the back of programs that had been launched prior to the u.s. election results. i think we're going to have in 2017 the last by the of outflows in emerging markets relating to the upcoming automatic information exchange that should tail off. so that in '18 the offsets of outflows should diminish or should actually totally disappear. i think if we look at our '16 results, we estimate that outflows for regular markets are up 1%. without these outflows we would have been at the middle of our range. as for the client trading activities, this is the perfected environment for us, and jowl jewulius baer is well positioned to take advantage of

that. we can do that as bankers, talk to clients on a daily basis and tell them what to do we've seen in the second half of the year that trading volumes picked up. >> shares in bbva ticked higher after fourth quarter net profit hit 678 million euros, outpacing expectations. it was the low bar of the spanish lender with earnings still falling 28% because of mortgage misselling charges and a slump in the peso. full-year profit rose by 32%, that was on the weak comparables seen after a 1.8 billion euro turkey related writedown. let's talk more about how we should be positioning ourselves today. lucy mcdonald is the ceo of a allianz global investors. good morning. >> good morning. >> i was speaking to some fund managers yesterday who were saying we are nervous, we're

confused. we put in positions last year, some did well, some didn't. this year we're having a difficult time seeing through the political mayhem stateside as well as in europe. what do we do? >> from our perspective it's where we think the growth is in a relative sense and where we think valuations are. there's an awful lot of noise at the moment which is what you're referring to. a lot of that is politics. much of that is we can't predict. therefore we are taking views as news comes out. news is coming out at a rapid pace, doing scenario analysis, what that could mean on taxation, companies we're looking at to invest in. there's a lot of work that needs to be done to work through some of the -- what we know and what is potentially going to be effecting the companies we're looking at. >> things are changing quite

quickly. also just, as an example, looking at the dollar and some comments we heard out over the last couple of weeks or days, with trump indicating that a weaker euro is just fueling this competitiveness, it's giving us an advantage over the u.s. but then at the same time other people from his administration have also indicated that we're still looking at a strong dollar policy. the currency markets, will they come to the forefront in terms of how we make our decisions on what to invest in given the knock-on impact? >> it's always a secondary. when you look at companies to invest in, the currency is never the primary reason to be invested. over the long-term, you can't forecast what it will be doing. you have a much better grip on the products, quality of the products, the quality of the management, the potential for growth for that company. but a much better handle on that than you have on whatever the impact of the currency could be.

even if you continue the forecast with better foresight, which you can't. you do have to have a view of how it could impact the appearance of the earnings. that's one thing. there's that translational impact. then also going forward there could be a more transactional impact. as we move through some of these more politically generated and then, you know, trade tariff barrier type issues. so we'll have to work through that. i think it will have a bigger impact, but it's never going to be the most important thing for why you're investing in something in the long-term. >> your forgaavorite sectors at moment are what? >> we favor technology. there's some very broad drivers of growth that come under that sector. actually standing back from it, when you look at what's happening in the world, most industries are becoming technology driven. and you have a huge great digitalization which is happening across many, many

industries. so, you know, when you look at that, there is plenty of drivers which are not going to be really determined by politics. they will be effected on the manufacture gin margin by politics, some of these sources can have quite a significant impact. but it will not be the primary driver of growth. so things like cloud, which i think your last guest mentioned, that is going to continue this move to the cloud, to digitalization, it is not going to stop it could be slowed down slightly but it won't stop. the benefits are so enormous to companies involved. social media, one thing certain media companies have been saying is trump is the best thing that's happened to them because of the news and controversy being generated. it means there is more viewership, engagement on platforms. that's good for advertising. so that's another area where we

can see. and online travel. just trying to get away from it all. >> yeah. one can wish sometimes. one can wish. you're staying with us. very good thing. get involved. if you have questions or comments for lucy or our other guests, send them through. we're focusing on what you need to do with your portfolios, do you need to change anything? do you stay put in your positions? find us on twitter, @louisabojesen, also on e-mail, if you want to write in, find us streetsignseurope@cnbc.com. volvo reported better than reported fourth quarter earnings. strong sales and cost cutting measures helped to lift operating profit to $646 million. they boosted their outlook for the european market this year. shares up 6.5%. siemens having raised its earnings forecast after profit in its industrial business jumped during q1. the german engineering group's core division reported a 60%

rise in profit. electrolux is at the bottom of the stoxx 600 today despite reporting improved operating income of $185 million. that was in line with forecasts. the swedish home appliance maker reiterated its full year forecast but warns it sees a negative 900 million krona effect from raw material costs. rubber stamping the brexit bill. the latest on theresa may's plan after the break. we'll get to your questions and comments and pose them to our guest. send them to @louisabojesen.

hi everyone, welcome back. you're still watching "street signs." the official gauge of china's manufacturing activity dipped in january, but it still beat

forecast and remained in expansion territory. pauline joins us out of singapore. there is an ongoing holiday in china this week. i also note the strong exports out of south korea. >> we are still in the lunar new year holiday with the shanghai composite closed until thursday. it will be back online on friday. not much reaction to the china data you mentioned. it was better than expected, but it was the second straight month of declines. when you look at the sub indices of new orders and production output, it is slower and down from december. we have the hang seng open after a four-day long weekend, it's gaining back some ground. down 0.2%. the h shares down by half a percent. several markets are closed. china still closed, so is taiwan and vietnam. malaysia also closed for a public holiday today.

we're looking at the nifty, with the nifty tracking higher as it is budget day. the financial minister said the impact from demonetization will probably wear off by april. so at least there's a time frame for that. he also said the government plans to spend big on rural development and infrastructure spending. we have the asx 200 ending higher by 0.6% off the back of a weaker dollar, which has helped oil and energy stocks there. largely and broadly, the asian markets are pushing higher. keep in mind volume is thin. several markets are still closed. >> pauline, thank you very much. back here, roche rising almost 7% in 2016. the swiss pharma firm said sales growth in north america was slightly offset by continued pricing pressure in its diabetes care business. roche says it sees 2017 earnings rising in line with projected

sales increases. carolin has more on the story. >> reporter: no surprises from roche this morning given the fact that the company confirmed its guidance for the year, increased its dividend and has no plans to sell its diabetes business in the u.s. rebuking overnight reports. what analysts are focusing on is the pipeline. roche has a record number of new launches out there. one of them being a drug called tacentri for lung cancer. that's had a strong start to the year. the ceo of roche telling me this morning this drug has potential. these days you can't talk about big pharma without mentions donald trump. he accused the pharma industry of getting away with murder and calling drug prices astronomical. how worried is the ceo of roche given that 40% of the pharma

sales go to the u.s. >> our strategy is focused on innovation. we knfocus on differentiated medicines, medicines that make a real difference for patients. i have no doubt whatsoever that there will be continued demand for such solutions and in particular the u.s. i'm convinc we are also committed to the united states as a country. we as roche have invested literally billions into our sites into the united states, into research and development. just recently we opened -- roche opened the biggest biotech manufacturing plant in the world in the united states. >> so that's a major investment. are you looking to invest more on the back of trump's call to move more production in the u.s.? that's what he told your colleagues last night. >> i remain bullish about the united states. i think this will remain an

attractive country for us. both from an innovation, but also from a commercial point of view. as a result of that, we will continue to invest into the united states. >> okay. with all this bullishness, where does that leave m&a? there is uncertainty about the affordable care act, the repeal and replace of that part of the healthcare reform. where does it leave your propensity to splash out money for deals? >> we will not change our approach towards m&a. we are very focused on acquisitions to compliment our existing franchises with new produc products, new technology. >> the shares have recovered somewhat this year, but last year in 2016 they were down 16%, in part because of all the political risk coming out of the u.s. the ceo also telling me that he's confident that share prices for the industry can recover once the market focuses back on

innovation. back over to you. >> the ceo of talktalk is stepping down after seven years. the managing director will take over in may. this comes as the uk telecoms business said it expects less churn in the fourth quarter. unicredit has assured investors that the european central bank is pleased with its turnaround plan. this is according to reports from reuters. early unicredit revealed the central bank found several weaknesses during its review of the bank. and uk lawmakers are set to approve the government's brexit bill when mps vote rate e later evening. the conservatives and labor are set to back the bill. the snp and the liberal democrats are likely to vote against it. in yesterday's heated parliamentary debate, the conservative veteran and former justice secretary, ken clark

blasted his party's euro skepticism saying it would effect enoch powell. >> you follow the rabbit down the hole, and you emerge in a wonderland where suddenly countries throughout the world are queueing up to give trading advantages, access to markets. nice men like president trump, erdogan, somewhere there's a hatter holding a tea party with a door mouse. as we leave the european union, i hope the consciouses of other members of parliament remain equally content. >> lucy mcdonald is still with us. what do you think the next two years will hold for uk equities?

>> uk equities themselves are quite -- have a lot of overseas exposure. so that is a help. there will be more uncertainty about domestically generated growth during this period. and exporters as well. so the currency weakness has been a boost to exporters in the short-term. domestic demand held up in the short-term. as we go through the next couple of years it's difficult to see that remaining as strong. so i think some caution is justified. however that, i think, is priced into some of the domestically generated shares. i think it will remain difficult, but a lot of that is priced in. >> benefiting from a weaker pound? >> yes. that is a benefit, because of the overseas exposure.

as we have all of the debates about trade, trade barriers, that will affect those exporter exporters. >> taking it more internationally. china, i note a number of analysts think we're overdoing the impact that trump could have on markets, and we should be looking more towards economies like the chinese economy. what are your thoughts? >> yes it does seem to be more stable than it's been over the last couple of years. we've seen it as a source of downside for multinational companies that now seems to be stabilizing to some extent. we had some better news from the industrial industrials. siemens schneider said they thought it was stabilizing after being negative. and then you have the luxuries good, where you had two, three years of severe crackdown from

the corruption, anti-corruption or political centralization of power. that seems to have been -- had most of the negative impact now and is stabilizing. in those two areas where there is quite a decent exposure to china, we are seeing some -- some better news. i think that's quite interesting. the overall level, you know, in china, it's still fast growth in the new economy, and consolidation in the old. that's going to continue. >> i guess i'm still struggling with kind of the overarching questions of do i buy a dow, for example, at 20,000 plus. do i sell a dow at 20,000 plus. i do buy emerging markets thinking that you could see a stronger u.s. economy, rates heading higher, looking at relief globally because of a stronger u.s. economy or do i

sell emerging markets? i'm struggling with investors also on some of the bigger questions because of this lack of transparency. >> the two factors which affect the relative performance of the emerging markets are the dollar and also commodity prices. commodity prices we have seen recover over the past year and now seem to be as far as energy prices more going sideways. that's a big benefit. probably less so. and the dollar has had its very strong run on balance. it still looks as though there's upward pressure on interest rates, but positioning was so intense that that's really meant it's difficult for it to go much further in the short-term. so you have mixed impacts on those delivers, and a relative valuation of the u.s. versus the rest of the world which is quite high. so shifting out of the u.s.

towards these other areas looks more interesting. >> lucy, thank you very much forever being with us. lucy macdonald joining us. we need to take a short break. look at world markets live, our blog. lots of key news on there. you can find us on twitter, @louisabojesen or streetsignseurope@cnbc. we'll be right back.

hello. good morning. if you're just joining us, welcome back, i'm louisa bojesen. a big gain for the apple food chain. racing ahead. volvo shares accelerating to two-year highs after fourth quarter profits hit second gear. >> president trump nominates neil gorsuch to the supreme court of the united states. hi everyone.

welcome back. more data hitting our wires here at the bottom of the hour. the uk january manufacturing pmi is easing a bit to 55.9 versus a reading of 56.1 in december. that means that we're bang in line with the reuters poll, with expectations. pmi input prices, 88.3, which is higher than in december. it's the highest since the records began back in 1992. the pmi output index, the highest level since may of 2014. export orders index the weakest since may of 2016. net-net uk factory costs ballooning at a record pace in january. growth slipping, this being pmi data coming through via reuters. cable on screen for you now. 1.2585. five hours away from the market open stateside. nevertheless the early bird gets the worm. implied open is slightly higher.

things could change, but this is what we're looking at. the fx moments, the dollar index losing 2.6% for january. in fact, when glancing again at some of this dollar trade, we've seen the worst january in around 30 years or so. trump also complaining that every other country lives on devaluation. you had the trump top trade adviser, peter navarro criticizing other countries. the u.s. guidance on monetary policy will be released today. some say they see two interest rate increases this year. the cnbc fed survey says they expect three fed rate hikes this year. >> reporter: the cnbc fed survey for january finds support for the new policies of the trump

administration, but one huge concern. individual tax cuts supported by 75%. business tax cuts by 80% or more. and then deregulation is the favorite of the 41 respondents to our survey. more than 80% have a negative view on trump's trade policies. that overshadows a lot of the good stuff they expect. that's maybe why the rally has come down a bit. back in december, 82% ascribesed it to policy expectations, that's down to 72%. those who say it's economic fundamentals is up to 26%. it's why these economists and fund managers think the market overall is too optimistic. 56% saying that. 39% say they are realistic. when we look at the biggest threats. look at some of the history of this series of questions. back in april 2012, 37% thought

the european financial crisis was the biggest threat. 41% off the fiscal cliff in july 2012. global economic weakness, you remember early last year sent markets into a swoon. 44% thought that was the biggest threat to the economy. now 51%, the first time we've had a majority focus a single threat to the expansion here in the history of this survey. 51% saying, protectionism is the biggest threat. >> richard kelly, head of global strategy at td securities is with us. not that r. kelly, another r. kelly. lovely to have you with us. your base scenario for the fed? >> i think there's almost no chance that they're hiking or doing anything like that. it seems set up for a reasonably benign statement. doesn't need much reason to change. they are set up for march if they have upside risks they have not communicated yet. >> how many times do they hike

this year? >> i think two is the right number now. there are significantly large uncertainties when you look around. it's easier to get to three than one right now. but as we've seen, a lot of debate and sort of disagreement over what they're doing with obamacare in the administration, what will be delivered on tax cuts, infrastructure spending and when, that will determine whether you can get more. >> i was mentioning trump's trade adviser criticizing germany, japan and china for devaluing currency. germany has come out and said this is nonsense. how much of a role do you think that dollar competitiveness is going to be playing in trump's agenda? >> i think it's certainly going to feed into the rhetoric of what's being discussed. it is unusual for the us .s. toe aggressive on this. it's something we've seen from japan for decades, something we have seen european officials do. we have to keep in the context

there is no ability for anybody to jawbone the currency. it creates intraday volatility, it's a lot of noise, is not helpful, but it's just that. it's rhetoric. >> i look at the dollar index, losing almost 2.6% in january. seeing the worst january in around three decades or so. do you think the correlation between the dollar and u.s. treasury yields is going to decrease? because there's speculation due to the rhetoric coming out from the white house administration so far and due to expectations on fed hikes that we might be looking at a slight breakdown in this correlation. >> i think on an intraday basis you can see these things. on any sustained basis we're in an environment where a better u.s. economy that drives more optimism for the fed will lift rates and will push the dollar. i think we want to have a bit of context. another thing we've seen, through all the noise coming out of the trump administration, the

data itself has driven up interest rates around the world much better than we saw before that. so i think itdecember was extremely strong for data. in january, the u.s. data softened up and you saw strong data around the world. if you look at the data surprises, for europe it's the strongest data in the history of the eurozone. that's what got the u.s. so weak. the rest of the world growing so well is not a great environment for the dollar. it's not something that will be sustained. don't write off the dollar yet. >> i was thumbing through the reach, you say view from the top, you're so vain, you probably think this market is about you. you think trump is overrated on these market moves. so you think we're still focusing on global economy and china? >> if you saw those relationships breaking down, you would say trump is having a significant impact. it's easy for us to lay a story

as to why things are happening. there's a lot of announcements coming out from the trump administration, but the fact is when you dig into the details, it still shows we're in a market driven by data and fundamentals for now. part of the expectation is built on the trump administration delivering on the promises when it comes to taxes, not driving too much of a protectionist sentiment and that side of the trump delivery will have a market impact. looking month to month so far, people missed the data and focused on the headlines. >> richard, you're staying with us. fantastic thing. get your e-mails through. i was tweeting that it was the r. kelly coming up, richard kelly, nick writes in says no context, you had to have been watching, then you would know the context. you can't take one tweet and expect there to be context always. at least on this show. join us with your questions and comments, @louisabojesen, organ

find us on e-mail, if you have slightly longer questions or comments, streetsignseurope@cnbc.c streetsignseurope@cnbc.com. i had to think about which show this was. president trump has nominated neil gorsuch, a conservative federal appeals court judge to the u.s. supreme court. gorsuch, an appointee of president bush, he serves on the tenth u.s. circuit court of appeals in colorado. at 49 years old, gorsuch is the youngest nominee to the country's high court in more than 25 years. tracie potts has more on this announcement. [ applause ] >> reporter: neil gorsuch, a federal appeals court judge with a conservative record is president trump's choice to sit on the u.s. supreme court. >> the qualifications of judge gorsuch are beyond dispute. he's the man of our country and a man who our country really

needs. >> reporter: confirmed unanimously in 2006, gorsuch clerked for the high court and graduated harvard and columbia with antonin scalia's widow looking on, he promised to uphold the same principles. >> judge scalia was a lion of the law. agree or disagree with him, all his colleagues on the bench share his wisdom and humor. >> reporter: demonstrators showed up at the supreme court tonight, civil rights, human rights and gun violence groups question his record on gun rights, religious freedom and police brutality. the alliance for justice calls gorsuch a disastrous choice. the senate's top democrat tonight said the line has been drawn, proving gorsuch will need 60 votes. >> i only hope that both democrats and republicans can kol togeth come together for once for the good of the country. >> reporter: a traditional choice by a nontraditional president headed to a divided

congress. democrats are ready to put up fight on this one. this is the second person nominated to fill this vacancy. president obama's nominee, judge merrick garland, never even got a hearing. tracie potts, nbc news, at the white house. many republicans immediately praised gorsuch's nomination calling him highly qualified, universally respected and mainstream. top democratic lawmakers voiced opposition. chuck schumer warned that the country needs a supreme court justice that could stand up to a president who has already shown willingness to bend the constitution. senator jeff merkley said the supreme court seat had been stolen and called gorsuch a far right extremist. and elizabeth warren, said trump failed to select a consensus nominee. many democrats signaled their intention to launch a filibuster to fight the nomination. warren buffett is saying

that he bought $12 billion of stocks for berkshire hathaway since president trump won the election in november. the quick succession of purchases saw his company match 50% of its total equity spend in three years in just three months. >> and the billionaire, ray dalio is increasingly turning sour on donald trump. the founder of the world's largest hedge fund says there is significant risk that the president's populous policies could hurt the world economy. this contrasts with his previous rhetoric. back in november, mr. dalio said trump's business activities would be positive for the economy. where do you stand? will this be positive or negative for the economy? >> we don't know. we've seen a significant

increase on both the tail risks of what could come out and gets delivered. if you go back to last october it was a one-sided world. low growth, low inflation. there weren't a lot of prospects that there was much in the pipeline that could increase that. that side has increased. i think that doesn't necessarily say that we are moving to a better world. but it does say at least there are upside risks than we had to deal with before. >> i was speaking to an investor yesterday saying i'm confused. i'm confused. i'm really confused what to do. last year i wasn't so confused. this year i'm confused. i do buy the dow at 20,000 plus? do i sell the dow at 20,000 plus? do i go long dollar? short dollar? what are some overarching thoughts heading into the year for somebody already positioned into the market? >> the interesting feature within equities, you could be long equities up to this point and be agnostic as to whether trump was pro growth or not because his policies in terms of

repatriating some offshore profits, in terms of cutting taxes, both on a corporate side and personal side would be increasing retained earnings, helping your equity pricing. on that side it was an easier trade. now as you get to a point of implementation risk, it gets more difficult. i think fundamentally you're still in a stock picker's market than a macro market. you have to be able to understand the policies and what implications will be. that can be difficult. but you can at least discern the winners and losers. you may get the exact same froth, the exact same inflation, but a different composition. that makes it a more stock picker's market. >> commodities? >> i think commodities, the issue there is you have still supply and demand balances in there. you have oil almost back to $60. it will be difficult to get through that. similar supply driving agricultural markets, base metals. that's not one you can look at and say fundamentally there's upside. if you do get an inflationary

push out of the u.s., if you get significant fiscal stimulus and an economy that doesn't need it where it is, that generates inflation. that is going to be upside for commodities. >> i'm being yelled at in my ear, i wanted to squeeze out a quick euro/dollar target. 1.50 in may, now at 1.08. where do we go for here? >> we are going into a lower environment in general until something goes wrong. >> you're staying with us. keep your questions and comments coming through. i do see them. i will get to them here in the next segment. french police have raided the parliamentary office of presidential candidate francois fillon as part of a probe into allegations that he employed his wife for nonexistent jobs. the conservative candidate said these claims are aimed at destroying his candidacy. investigators questioned the couple separately for several hours in a mrpreliminary inquir

that could lead to formal investigation. coming up on "street sign,", juicy results from apple. the tech quarter's strocompany' quarter earning.

welcome back to "street signs." i'm louisa bojesen. under armour took a bruising after reporting a disappointing fourth quarter revenue. the stock had its worst day on record falling 26%, wiping out around $3 billion in market value. that's the u.s. listing there. the sports wear maker's lower than expected earnings were hit by increased competition and slower growth. they forecast sales growth of

11% to 12 president, well below estimates. facebook has seen sustained growth over the past couple of years, but the social media giant faces challenges in keeping up that level. some are concerned about engagement. analysts expect 46% revenue growth. >> reporter: the bar is high for facebook to show they can keep growing consumer engagement. analysts are looking for 46% revenue growth and 66% growth in earnings per share driven in part by instagram. with shares up 13% year to date, and up 71% over the past two years, analysts will be looking for commentary on facebook's video advertising strategy, how it will make more money from emerging markets, higher operating expenses and the impact of the intense political news cycle. >> there's two sides of it, it

drives engagement at one level. people want to see what's going on. it annoys people to see nothing but commentary on trump on one side or the other. >> going into earnings, analysts are bullish. 46 analysts rate the stock a buy or strong buy with only one analyst giving it an underperform or sell rating. back over to you. >> a top and bottom line beat for apple propelled stock up by 3% in after hours trade. apple sold more than 78 million iphones in the fiscal first quarter, more than ever. returning the tech giant to the position of world number one smartphone seller for the first time in half a decade. it cautioned that a strong u.s. dollar could weigh on revenues in this period. our tech reporter, arjun us to talk more about this. a big surprise. >> an extremely important quarter for apple. it's the first quarter where we

saw the effect an demand for the iphone 7, and it comes on the back of three successive quarters in declines in sales and revenue. >> new records set for the mac, apple watch, the services division. >> what was particularly key in that, the one you mentioned was services. this is where a lot of analysts see future revenue growth coming from. this includes apple pay, apple music, all the other services that apple sells to consumers around the iphone. what was interesting is what tim cook said in the earnings call, that is that the services business could be as big as a fortune 100 company. it was worth about $7 billion of revenue in the latest quarter, the goal is to double the size of this business. it's really key here. how he goes about that will be quite interesting. one thing he did mention on the call was this idea of investing in original content. this could be very expensive and a risky bet for apple.

they have to be careful about how they create original c content. >> it makes one's imagination run wild on whether apple, years from now, could do a google. if the services division becomes a dominant thing, whether they become this conglomerate that they already are in a sense in terms of branching out into being a multi-faceted player. >> what happapple has done in t past, they owned their own software, they have made the hardware. by doing that, they control everything. that's how they can serve their customers with all these other services. >> what do you think of technology? >> i mean, it's interesting. i think you are getting this push back. the questions on protectionism in the u.s., can companies grow. the big question on taxes, trying to bring profits that some of these i.t. firms are holding abroad does that change their business planning? if the tax code in the u.s. changed, does apple as a business change? >> no, i don't think, but it does change what they do with

cash in terms of repatriating that. they have $2 billion worth of cash sitting overseas. tim cook said repatriating cash to the u.s. will be good for share holders and for apple as well. but i don't think it stops what they do in terms of investing in new areas. at the end of the day, apple needs to find new areas of growth. >> let me mention that apparently people like their larger screen version as well. and it seems also that they benefited from the disaster from samsung, the note 7. >> that's why we have seen this uptick in iphone revenues. the average selling price has come up significantly to about $695 because of the success and demand for the larger phone, iphone 7 plus. >> thank you very much for updating us on all we need to know in apple. we'll see you soon. richard, people writing in, and lots of questions coming through. i did see one on a more political one coming through

from barry on whether or not trump has sold ukraine short by cozying up to putin, ignoring his annexization of crimea. what happens if we start to see political rhetoric heating up more in terms of sticky areas like ukraine, also middle east involvement, things like that? how will that be reflected in the markets? >> the problem is there's such large-scale changes going on in the geopolitical world, the way trump is setting things up. you can go back to the second bush administration where the u.s. had been set around this dual containment idea of keeping iraq and iran contained, he changed that and it's cascaded. you look at trump, how we deal with russia, whether we open them up or close them down, we close the borders, that has created uncertainties of the politics could change.

we're used to that within emerging market. you're used to dealing with that risk, having that risk premium embedded. you're not used to doing that when you deal with the united states. >> almost like the united states in some ways have become an emerging market, the shifting nature of everything so quickly. >> it's a rapid structural change in a large economy. that's why you can't have a strong conviction over what's going to happen with this. >> i don't mean in terms of the economy, but -- >> sure. >> richard, thank you very much for being with us. richard joining us -- richard kelly, head of global strategy from td securities. that's it for today's show. i'm loose luuisa bojesen. "worldwide exchange" is up next. [ alarm clock beeping ]

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good morning. it's decision day at the fed. investors await the key first policy statement since president trump's inauguration. apple snaps the slump. the iphonemaker reverses three straight quarters of slumping revenue. and president trump selects neil gorsuch, which could be a contested pick. it's wednesday, february 1, 201, "worldwide exchange" begins right now. sunset ♪ ♪