♪ good morning everybody and welcome to "street signs." >> these are your headlines. >> dial in danger. the uk exchange is saying it cannot neat demands set out by european regulators. >> italy's says it will nautd pursue a bit for insurance gen ralt. >> warren buffett slamming wall street monkeys. saying acting managers have cost clients $100 billion with failed

market bets. >> and the loser is price waterer house cooper apologize for their oscar mistake as "la la land" is accidently announced as the winner in a spectacularer best picture mix up. ♪ let's get back to our top story. al shares in deutsche exchange's deal appears in danger of collapsing, this after the british group said the european commissions was unlikely to approve the deal. but why? here from frankfort to talk us through the latest developments. >> reporter: the latest is that lsu is dejected to divest a part of the italian business which

the e.u. commission is demanding. the lsu putting out a statement saying they couldn't comply with the latest demand from brussels. this would actually not go through the regulatory business in italy and also that wouldn't really help their extending in italy. so that's exactly where we are now, that brussels is demanding further action from the lsu where the lse is not complying. i was hearing from sources close to douch berger that they could comply with the new demand and it looks like the merger is not getting through with the latest development. the new deadline is end of march when the e.u. commission will come out with a statement whether they find a way to remedy the situation or not. but for now it looks like the

merger between the lsu and deutsche is becoming a lot less likely. >> and deutsche burzer is completely surprised. do they have a plan b for how to go forward? would they try to go after another exchange provider? would they go it alone? >> well, probably yes. the big lan from the ceo is to make them big enough to compete with the likelies of the mercantile exchange or the hong kong stock exchange in asia. so that's actually the size he foresees for them. he's of course very much behind that merger. the driving force, he says that a operator in the new financial times, as he calls it, needs to be bigger than just the stand alone player.

if that merger falls through, it's the third time they're trying to merge or take over each other. then we most likely see more action from deutsche in asia or elsewhere. >> and generalality shares have fallen following the bank's decision not to take over a formal bid for the insurer. saying it would not create value for its shareholders. so there are two deals that have fallen through very quickly over the weekend. kind of reminds me of last week when the heinz-kraft deal never happened. >> a lot of interest in deal making that moment. we're seeing real comeback. here in europe we've been

trading fairly flattish. we're just a little bit below the flatline on the stoxx europe 600 and the really big thing to watch out for happens tomorrow with president trump giving the state of the union address. so we could hear more of plans about tax cuts and possibly deregulation and infrastructure. that's what the markets would like more clarity on. whether or not we get more details, but our european equity markets and the upside, top left hand side of your screen, food and bevererage, household goods and technology up .10%. >> and warren buffett in what he called a remarkable u.s. economy. saying a collection of conservatively financed

companies are quote virtually certain to be worth more in the future and saying quote tide of talented and ambitious immigrants was a key ingredient to america's biggest achievements. he'll be speaking on "squawkbox" so make sure you stay tuned for that. maybe the sage of london. the head of research at brun dauf dauf-- saying the $100 bil has been lost for investors the last couple years. what's your defense? >> it has to be put in the same bracket as warren buffett. it's rare that. but certainly if you're doing some crude analysis, almost throwing darts, you're likely to find an underperformer. those who aren't seeking advice

encouraged to take passive options, i would argue. but there is some low hanging fruit in active management, people like buffett and we could read off names if you like. but if due diligence and hard work is applied, there's still value found in active management. >> i don't know whether it's miraculous. yes, the stock markets are telling us exactly that story. actually treasury yields have dropped to levels we saw well before the november elections. who's right? >> well, i think the bond market has played its role in allowing miraculous recovery. it's helped with the refinancing costs for several compoanies an

they were at such a low level for such a long period that financial instability has been removed from our assessments of the u.s. economy. but here we are with u.s. businesses in reasonable shape and seeing bond yields move a little bit higher and maybe encourage them to actually start thinking about putting their balance sheets to work. >> why do you think that european politics is a red herring? >> it's a bit of an aggressive statement. i think the ultimate fears we have about euro skeptic parties taking control are unfounded. i think political predictions have made people quite humble in 2016. and nonetheless, le pen should be comfortably beaten in the second round and you look to the

netherlands and they would likely command the most votes but not get the level of support he needs to lead a government. so while the headlines are sure to create volatility, ultimately we don't see them as euro skeptic leaders. >> most people won't completely rule out a lepen win. even if she doesn't win, there does seem to have been a significant shift to the far right. isn't that going to influence european momentum, markets? >> i think so. there's a big political debate. the way politics is shaping up is that you have those in leadership sort of open and euro file and the opposition becomes euro skeptic. so further down the line, if you do have quite a severe

recession, which can happen. it's not an imminent threat but they will happen, then t electorate seems to be in tthe opposition. and then you really could have another existential threat upon you. >> i don't think many investors will be as brave as you and certainly not the ecb either. they can't afford to raise rates as would be mandated by their outlook. essentially their hands are tied, right? >> they don't want to derail recovery by talking too hawkishly. but it is starting to recognize the data is improving. indeed there are muteinary inflationary pressures but not

enough to begin tapering. and while we don't ultimately see these euro skeptic parties, we recognize the threat and there's certainly the headlines around the first round or getting the most votes but not taking power. they'll recognize and talk rather cautiously in terms of its tapering agenda. >> what about u.s. equities? >> we would be buying european equities into these political headlines we think will present selling opportunities. we think the u.s. is right in the imminent weeks and months. >> and that might come as early as tomorrow. always a pleasure having you on. head of fund, research. >> good morning. regarding the lse deal, he says better not done especially after the brexit regulations,

they come into effect. i'm trying this alculine coffee at the moment. slightly grumpy. >> you seem pretty nice. >> yeah, well. street signs europe@cnbc.com. and we're on there directly as well. >>@carolyn cnbc. >> and their shadow of a scandal. we found out what's hot in barcelona live from the mobile world congress and next up we're talking to the ceo.

shares in u.k. home builder for seminar trading near the

top. an increase for 2016. they have pledged to increase its dividends against a back drop of rising demands np company's ceo warns that a shortage of labor could curtail housing building going forward. >> the actual output is probably at the top end of where it's ever been. we're actually building over 150,000 house as year. so we're put in the sites to make sure we can build the demand we're meeting to see. and that other end, we've got issues with training a lot of people. we've got nearly 600 trainees in the business at the moment which is about 13% of the work force, so all the industries trying to respond but that is a pressure on us at this present time. . >> nokia shares have been

getting a lift after it announced a range of new smart phones and it's relaunching its old one. they spoke to the hme global group and asked why it decided to bring this handset back. >> fans asking it and me ever thinking whether we do it or not and let's have some fun. noek nokia's a fun factor and it would create an overall halo that nokia is driving the next chapter. >> karen joins us in barcelona. some of us are really happy to hear that the basic phones are coming back, karen. >> louislouisa, that's because e a smart person. dumb phones are for smart people. joining me now is the ceo of ee. nice to see you.

this spich off factor. we have so many smart phones, emails, every facebook, twitter, social media we can really have. but you say smart people want a phone that can do the basics so they can switch off their smart phone. >> this is about choice and a wide range of products. but we're definitely seeing demand from the most connected customers that they want simplicity and be able to turn off sometimes. >> what does it mean? is there a seat at the table for them? >> i think definitely there's a role for them in the market. they have a lot of credibility, a lot of customers, have a good nostalgia for that brand and i think there's a place here at the table for them, definitely. >> you've been boldened in

debate and what's the big focus for your group now? >> we have a huge focus. in the u.k. we have a network that is building out to 95% geographic coverage of the u.k. up and down the country and we focus on geographic coverage first and foremost. and i think in a connected world that becomes really important to us. so i'm here to look at network technologies that can help us role out that network faster and more and more customers are using video more often on their smart phones and we have a unique position running the emergency services connection in the u.k. which we're creating for the 300,000 fire police and ambulance services. >> you were one of the key lobbyists against being dedicated to emergency services.

he lobbied for a check so you could use some of the funds. is that a misstep? because the u.s., canada, columbia, mexico, argentina, that iall have emergency spectrum. >> with new network slicing capability on show at this show, we're able to create what is effectively a dedicated network -- >> ruthless preemption is the standard in other countries. if everyone is connected to a cell via a mobile phone, you're not going to kick off those customers to give calls to emergency serves. >> i think that would be an expectation with us running that network and it's a fantastic

program. and all eyes are on us to deliver this within the next year and we've announced great innovation with drones and balloons and emergency response vehicles too. >> a lot of press about helium balloons. it all captures our imagination but there's so many issues getting past regulatory hurdles. so what's the capability of using those innovative products. >> we have them working already live in our test environment, using satellite and i expect we can get a balloon up and running within the year and that's our ambition. >> in the uk? >> absolutely. and this is part of our story, not just for the emergency services network but for rural communities in the u.k., those areas hard to reach, difficult to cover and when we have situations like power cuts,

we're here to look at innovation, to build on that, to make sure we can keep customers connected. >> thank you so much for joining us here at global world congress. i know that's been pretty big after the u.s. election, after all the hacking allegations. we toss it back to you in the studio. >> we like your quote. that smart phones are for dumb people. >> i'll take it. i won't expose that i have a really sophisticated phone at home. >> but it's true about the switching off. >> did you play smak back in the day on the nokia phone? i did. >> you need to go get one. beauty's in the eye of the beholder. we take a look though at some of the weirdest and wackiest phone designs. you're seeing some of them on screen. but check out the full slide show and stay tuned for the

latest news and interviews. i could never get my head around the oyster. >> i quite like that wup. one. president donald trump will use his first major speech to congress to -- his bundlet will include quote massive military and law enforcement hikes. they said welfare spending were not facing any cuts for now. meantime private equity executive has dropped his bid to become president trump's secretary of the navy. he said he could not satisfy ethics rules without having anned averse impact on his finances. this only a month after army secretary withdrew his candidacy for similar reasons and

democrats still reeling from big losses in november have picked a new leader. >> mr. tom perez. >> reporter: after two ballots in atlanta, members of the democratic national committee chose a former labor secretary tom perez. he beat keith ellison by 35 votes. immediately he moved to unite the party, naming ellison deputy chair. >> if you're wearing any t-shirt, i am asking you to give everything you got to support chairman perez. >> reporter: perez has a tall task ahead, replenishing the dwindling cash supply and state legislatures and congress. >> we need to make house calls,

we need listen to people, we need to get back to basics. >> reporter: if he has anied a vaptage, it's that the young presidency of donald trump has energized groups of opposition. >> i know we can win the battles ahead, i know we will when we put our valueser forward when we lead together. >> so now more than evwe need stay engaged in the field and online. >> reporter: with their former presidential nominee pledging her continued support in a social media video, democrats in atlanta say they see better days ahead for the party. well, glancing at our european markets and in particular at our european debt markets, pushing lower and the bund yield a little bit higher this morning, having fallen

around 30 bases points compared to 10 bases for the month. and indeed also check out world markets live. it runs all the time throughout the entire european trading day.

hello and welcome. you're still watching "street signs." >> your headlines today. >> deal and danger. deals in douch deutsche bors ere fall and they will not pursue a bid for the insurance giant, jenarality. >> and active managers have cost clients $100 billion in wasted fees with bad market bets. and the loser is. price waterhouse coopers. it apologizes for the oscar mistake as "la la land" is accidentally announced in a spectacular best picture mix up. ♪

good morning everyone. let's pick things up with our top story. shares in deutsche boerse off by 4.7%. the lse off by 3.2, after they said the european commission was unlikely to approve the deal. the lse said the commission asked it to sell a 60% stake in fixed trading platform to satisfy antitrust firms. they said it would struggle to upload mts and that any sale would harm its business. how are the markets looking this morning? well, we open pretty flattish and we hold on to a -- ftse and xetra dax and we are

seeing a little bit some reaction to the bigger deals not happening or by the looks of things running into hurdles. shares trading down in both of these big companies. when it comes to the fx markets and the euro dollar 1.05. shy of 1.06. the issue is for how long that can continue. >> meanwhile the deputy finance manager told the broadcaster that greece's creditors would avoid a so-called bail in. they're avoiding substantial forgiveness. germany has been a long term

opponent of such measures. >> and german chancellor's party is neck in neck with the social democratic party according to the latest survey from the institute which found that both parties would win 32% of the vote if elections were held today. now the spd has surged in poles since nominating martin shoals as its candidate but there's still seven months to go to befo before it -- only 30% of germans would like to see him as chancellor. but the the question is what sort of coalitioning the two parties would form. >> she's been such a strong figure in germany, right and has had had had so much support. speaking of support, macron is set to beat le pen.

the consulting survey shows them securing 61% of votes while figueroa sees him winning with 58%. macron has ben fitted from being backed by the former banker. at the same time fillon has slammed french government, siting a national rally last week which saw people injured. they said france was witnessing a quote quasi-civil war. when looking at what's been taking place in yields and bond yields, we have been seeing quite a movement of this flight to safety and as we were talking about the german tenure yields dropping quite substantially, a lot more than we're seeing in the states and this real flight to safety pushing bond yields

lower. we're seeing a little bit of lower. and good morning. how much do you think that the spread between the french and the german bund yields is going to widen up to the 23rd of april when we have that first round? >> i think we'ver already seen the spread move a fair distance. so when trump won that election, that was the capitalist for her to start increasing her chances to win and we've seen it raise to about 80 bases points and really because it's very difficult to see anything that derails le pen's campaign at this juncture. she's almost like a trump character and whatever bad news gets shrugged off. the competition a bit like hillary clinton in that negative news, questions of their character has an impact on the

polling. le pen very likely to get through the first round and win it. at that point i think the markets might get panicky. >> what happens if she wins? if she proves the polls wrong and actually wins? >> i think the first reaction is -- that first round we probably see spreads of 120/150. if she wins, maybe 400. the real down side risk is redenomination of government bonds. she needs to get that through parliament and it's difficult to see them getting enough seats to pass that through. but initially the markets are going to get very nervous and particularly if you look at the marginal buyer over the last few years, it's been that large investor base looking for a little bit extra yield without any negative headline risk attached to that. they have fit that description

over the past couple years. those japanese inthe vestors are something like 10 to 15% of holders of french government bonds. they're all had going to be heading for the exit door at the same time. >> at the same time investors have been through trump, brexit. and now they don't think that a french election that produces marie le pen as the winner -- and don't you think there's some complacency in the markets? >> i think there's a little bit of complansancy but i think you'll see vote nothing tensions for the second round narrows a bit and that will push french wider. and the broader market has ignored it up to this stage. once we start seeing the spreads move wider in french government bonds, there's going to be more

volatility. that in itself might create a very attractive buying opportunity. french spread should retrace pretty quickly. >> you know what's really puzzled me over the past couple weeks is the extent of buying and yeah, it's the a -- i thought we were in this big reflation trade. is that not happening? >> there's always going to be bumps in the road i think we're still in that reflation trade but we need see more delivery from trump. some concrete deals around the fiscal package. and we went through an important level on friday for the tenure treasury. so we might see it move lower in the near time. and the onus is on trump to put more flesh on the bone and reignite that reinflation trade. >> what are you buying and what are you selling? >> we're selling french government bonds.

we're buying areas far away from europe. things like australia and maybe countries like korea that don't have that headline risk, that big cliff risk attached to them. >> john taylor, global portfolio manager. and are the organizers of the oscars living in "la la land." don't want to miss it. >> "la la land." >> you kick this off and we were standing on your shoulders. you lost, by the way. >> no, sorry. there's a mistake. "moonlig "moonlight," you won best peckture. >> this is not a joke.

"moonlight" has won best picture. "moonlight" best picture.

welcome back everybody. you're still watching "street signs." "moonlight" has won the oscar for best picture. it wasn't without controversy as warren beatty mistakenly announced "la la land" as the winner. >> "la la land." >> reporter: for several minutes it appears a best picture win had capped ed ped a magical sevr win for "la la land."

during the acceptance speeches, they realized presenters had had read from the wrong card. >> this is not a joke. "moonlight" has won best picture. >> very clearly even in my dreams this could not be true but to hell with dreams. i'm done with it. this is true. >> reporter: including a best supporting actor for the first muslim actor to win an oscar. "la la land" still came away with six awards including best director and best actress for emma stone. >> and i realize that a moment like this is a huge confluence of luck and opportunity. >> casey afflec, manchester by the sea. >> joining the ranks of best actorer winners is casey afflec for "manchester by the sea." >> supporting actress honorers went to viota davis for her role

on "fences." >> i became an artist and thank god i did. >> reporter: not on hand the directorer of "the salesman." his absence a protest over donald trump's travel ban. the unforgettable moment is the one that gave "moonlight" a best picture win. stephanie stanton, cnbc news, hollywood. >> wow. >> i know. i mean, this stuff happens but it's unfortunate. >> it was an honest mistake. >> you couldn't do anything on stage. another loser at last night's oscarer ceremony was the accounting firm, pwc. see the o process. they were given the wrong

envelope and the real winner was "moonlight." i have to say it was an amazing movie. really, really good. >> do you still trust pwc with your finances after this? i know this is a bit of a stretch. >> do you trust them doing this next year? >> i don't know. president trump will use his first major speech to congress. they say his budget will include massive military intelligence and law enforcement hikes but speaking on saturday, steve munugz said welfare spending were not facing any cuts for now. meanwhile there is growing debate over whether a special prosecutor should be appointed to investigate possible ties between trump campaign officials and russia after they called for an outside investigation after a wall street journal poll shows the president's approval rating

is at 47%. that is a record low for a new president. >> reporter: for the trump white house one word is an instant flash point. russia. >> russia is fake news. this is fake news put out by the media. >> reporter: today the president lem lamented again. russia talk is fake news put out by the demes. at issue the intelligence community already determined russian hackers did determine with the 2016 campaign but still under investigation did trump campaign associates have inappropriate contacts with figures in russia. >> i think the real easy answer is the fbi has already said this story is b.s. those are their words. >> reporter: on friday california republican congressman suggestsed a specia

counsel, not the attorney general -- >> you cannot have a man, jeff sessions, an appointee. you're going to need to use the special prosecutor's statute. >> reporter: but others disagreed and said a special prosecutor is a step too far. >> the justice department has shown itself to have the ability to investigate these type of things. >> reporter: briefed by fbi director comey, senator tom cotton says the bureau's work on this is counterintelligence, not a criminal probe. >> there's no allegations of any crime occurring. >> reporter: but after the white house admitted it urged the fbi to discredit news reports and chairmans of the intelligence committees were asked to help as well, democrats insist that crosses a line. >> you have seen a flurry of activities that there inappropriate. let's have an investigation and

learn the truth. >> cyber security is also a key theme at the mobile world congress. karen. >> carolyn, thank you. cyber security particularly important when we talk about industry trends that are changing. computers take our information, come up with new searches for us and there's more and more devices become connected. joining me is somewhat of an industry veteran. the ceo of sink ruinous. you were telling me. we've been looking at this incorrectly as you talk about who's building up 4g and 5g. >> that's right the mobility revolution is pretty much getting the saturation and there's only two fundamental ways to grow. one is to add devices and modify the data those consumerers yooz. that's a good thing and it

creates risk because internet of things and multiple devices increases the capability of things getting hacked. it's great to have a mobile home where everything's interconnected but that access is pretty sensitive. that create as whole new world of security. >> it feels like we haven't yet worked out how to power some of the deziess. >> it reminds me of the old voice over ip days. it's been through that cycle now. as the standards become more institutionalized, it's becoming more and more reality, but when that happens and you're seeing it here, the security risks are only more heightened because people are using it from everything to opening garage doors to video cameras. when you think of items we work on are really important. >> i'm not surprised you're reluctant to talk more about 5g. because everybody is.

how does the pay for this? what are you seeing in terms of the industry trends on how to stretch out revenues and make money? >> there's clear hly a need to monetize. but what i find unique in dealing with many of the top one or two operators is their market strategies are significantly different to pay that. verizon going more content oriented. and time warner and content buying as well as their bundled service and what we're really seeing for the first time is multiple business models that are really trying to achieve that monetization and really get to that next evolution with the subscriber. it will bow interesting to learn how that plays out. >> at&t trying to buy time warner. there's a bid in the background

between sprint and mobile and changes by regulators. so what's the big focus? they try to consolidate to make money? >> it's a chal mlenge across th board because some are along assumptions of what the regulated environment would look like. almost all of the operators today believe the data and their ability to work with consumers is very big. we just did a study where outside of social networks, the they're the most brand and it's going to drive what type of business models, whether it's advertising, bundles will really hold the day. >> you're somewhat of a disrurpter in your time. i notice you've changed your business model in the past year. you were in mobile activation and moved your focus towards the

cloud. explain what you're doing. >> so we started our business in the activation side and during those periods where multiple devices are getting activated, and sometimes do 1500 to 2,000 phone as minute. those days are over. we've moved more closer to the consumer specifically around cloud. one huge trend we see is the bring your own device and that brings some of the questions you brought up earlier. how do you get the experience? we become enterprise employees during the day, consumers at night. and that trend is big for us because we see, as consumers have one device, it's going to have multiple personas and it's really playing into not only that persona but making sure that security is locked down and secure for the end user. >> it's funny you raise that

point about your own device. but last time we saw the launch from samsung which is basically a two in one and they're basically saying that's the next frontier. tablets sort of the next big thing when you want to take them to work as well. do you get a seat at the table when it comes to activations and the way enterprise and business works around particular tablets? >> yeah, we do and you point out very effectively that those are good but not significant growth drivers. certainly the virtual reality is something that's going to be trendy going forward. but we keep coming back to people would like to have one device and have it manage everything from their home to their business needs to their consumer social networking and be able to segment that is very important. >> donald trump is friendly not

for consumers. >> i think that market, it's interesting to see how it plays out. but the trends is more -- not as much regulation and interesting to see how that plays out. >> thank you for giving us your perspective. the it ceo of synchronis. the coverage from the biggest mobile event in the world, guys. >> thank you so much for that, karen. sony has been busy in barcelona and one of its product launches is a projector. check out that and all the latest news out of the mobile world congress on cnbc.com. >> that is really handy around the house. wonder if you could take it with you. you could. on the plane, exactly. don't have to carry your stuff anymore. u.s. futures and what we're

seeing state side, a couple points lower on the right hand side of your screen, this on the back of a friday where we close just barely higher, managing to eke out some gains very last minute. >> the 11th consecutive record close. 11th now. european markets are looking slightly better. today, we've got the ftse 100 up and that's it for today's show. >> "world wide exchange" is up next. have a lovely monday morning.

reads on the economy and a major address by president trump and focus in the coming days. >> washington watch. health insurance executives heading to the nation's capital, before the he plans to explain how he is going to replace and repeal obamacare. we'll have all of the highlights of hollywood's night straight ahead. it is february 27th, 2017. and "world wide exchange" begins