welcome. you're now watching "street signs." i'm louisa bojesen. >> i'm carolin roth. these are your headlines. european stocks fail to break into the green at the open after german industrial orders suffer their sharpest decline in eight years. the ceo of psa tells cnbc he can turn shares of opel around. >> we think that we can help. i trust that with the level of education, talent and passion we have by opel, this german brand

with be unleashed. >> oil oscillates as producing nations say it's too soon to tell if an output deal should be extended. cnbc speaks exclusively to the saudi oil minister and opec secretary general. investors gobble up just eat, sending the take-away firm to the top of the stoxx 600 after earnings rise 93%. good morning. >> good morning. >> good morning. >> european equity markets today, very flat on the open. that's what we're hanging on here an hour into trade as seen in our main european heat map, as we like to call it. you can see we're flat at the moment, heading further into trade. this comes off the back of a busy day with regards to news flow. a lot of big deals being done, and the deutsche bank announcement there's an 8

billion euro cash call. the main european equity markets reflecting what you're seeing on the stoxx 600, flattish markets to slightly mixed across the board. >> we have a couple of big company results that are weighing on the indices. want to show you the sectors one-on-one. autos are trending to the upside, best performer, up 0.23%. followed by basic resources and technology. on the down side, travel leisure, healthcare and real estate. europe's first major motor show is underway. it's in geneva. the automakers are taking the wraps off the latest models. bmw launched their 5 series touring. volkswagen unveiled it's driverless car, and aston martin will introduce it's newest hyper

car, the valcuri. you want something that sounds powerful. you're looking at the car stocks in europe. president trump's proposed border adjustment tax could have a big impact on car prices. volvo would be the most exposed to price hikes if import taxes rise. speaking to ceos at the geneva motor show, nancy asked how the tax would impact businesses. >> translator: we've always relied on nafta, nafta being a stable economic forum for us. therefore we would expect that those agreements will not be terminated easily. >> as no decision has been made so far, we need to wait and see what the decision will bring and see what further developments will take. i think the u.s. will also be a lever for exporting cars from the united states to other parts of the world. this needs a bit of free trade

agreement. >> lowering the corporate tax, but increasing the border tax will really cause us difficulties. >> it doesn't stop there. we'll hear from the daimler chairman dieter zetsche within the next 15 minutes. french telecoms group, iliad posted a 20% increase for full year profit in 2016. iliad said it had a record rollout of the ultra fast network with 310,000 subscribers by the end of 2016. german residential real estate company svonovia posted profit shy of analyst estimates. i like this story. this is very close to your heart. lindt expects sales to grow by 6% in 2017. net profit for the group rose by 10% in 2016 to 420 million swiss francs, boosted by the swiss

chocolatemaker's lower tax rate. as global chocolate demand goes down, lindt bucks the trend by marketing easter bunnies and chocolate as high quality treats. i used to work in a cookie factory. can you believe it? this is way, way, way back. one of these, it's a good idea. your parents think you can work for a summer -- >> make some money. >> you see what it's all about. i worked in a factory where you take cookies and put them in the little holders, they tell you on the first day, i was looking at the pictures with the chocolate bunnies. they say you can eat as much as you want. you can't take anything out of the factory, you can eat as much as you want. and you do. >> can i tell you a secret, full disclosure, not a secret anymore, but i did work at lindt in a factory. i put all the chocolates in there. made good money at the time. same experience, eat all that

you can. >> do you still like lindt? >> i still do. all types of chocolate are good. this is no endorsement for lindt & sprungli, obviously. >> when you're around the chocolate smell, you can eat as much as you want. the french utility group, edf announced the launch of a 4 billion euro rights issue to help boost the balance sheet. they would inject 3 billion euros as part of the sale. paddy power betfair said it saw no impact from brexit and will open hor stomore stores in 2017. get involved, we have a packed show. the address is streetsignseurope@cnbc.com. we're also on twitter, @louisabojesen. >> or @carolincnbc. tweet us anything chocolate related, auto related. coming up on the show is the uk consumer confidence, is it taking a hit from brexit? we'll find out and preview the

budget after this short break.

welcome back. you're still watching "street signs." we need to check in on the markets out of asia. sri joins us from singapore. there's an rba no deal, as it were. >> i'm afraid so. yes. so the neutral buyer staying in tact with the bank of australia. banks liking that one. let's face it, they don't have much of a choice. they need to contain this housing bubble. cutting rates would aggravate the situation and tightening would really burst the bubble, and it could be a disorderly collapse that ensues. herein lies the policy problem for the bank of australia.

broadly the tone was fairly positive. i think our asian markets did a reasonable job of shrugging off some weakness that came out of the wall street session overnight. but still the clear and present danger lies with the rate environment and march is certainly on the table. here sdz herein lies the risk. i wanted to talked about the kospi. it seems to be quite stable right now at end of the trading day at 2,094, despite tensions regarding north korea and the missile program. broadly we have done a good job today in terms of shrugging off the weak lead from wall street. all eyes on the higher rates environment there. back to you. >> sri, thank you very much for that. shares of snap finished more than 12% lower in the third session falling below the ipo price for the first time. this after several firms

including morningstar and nomura started their coverage of the company with a sell rating on the stock. interesting, there was one analyst rated snap at underperformer comparing the stock to buying a lottery ticket. can't say i'm hugely surprised by the fall in the share price since the ipo. this company has shown slowing user froth, unprofitable, unproven business model and most importantly maybe, if you're a shareholder, buying into this ipo, you didn't get voting rights. because of that, precisely because of that, now group representing large institutional investors approached the stock index advisers and they want to bar snap from being included into indices precisely because of that reason. that's a big warning sign for investors. if you don't get voting rights. >> a lot to of this you're buying hype. there's so much hype around this

ipo. still 40% above the initial price of $17, where the shares were sold at the ipo. you had also, i guess, quite special to have analysts coming out with a call before the first month is done. five analysts put sells on it. two have a hold or snut raneutr. two with a negative rating on the open and a $10 price target compared to now. the call is out. >> yeah. if you look historically how tech ipos have done, reuters has done research on that. in the first 12 months after an ipo, the majority underperform. maybe 12 months after the ipo they do recover a bit. that's the big question, if you're a short-term investor, whether you want to be invested in these stocks. our parent company, nbc, has made a sizable investment into

snap, but probably long-term investors. >> it's funny when you invest in something that just disappears. >> on to the political scene. francois fillon received political backing after he was ruled out of the party nomination. conservatives were relaunching fillon's campaign. the 63-year-old, once the election front-runner is expected to lose out in the first round according to the latest polls. emanuel macron has closed the gap with far-right leader marine le pen. while the poll expects le pen to win the first round with 26% of the vote, she is expected to be beaten by macron in the second-round runoff. the centrist independent is expected to achieve 61% in the second round compared to le pen's 39%. british consumers are cutting back on spending as rising inflation pushes up the

costs of esee rising inflation pushes up the costs of es essential goods and services. nonfood spending fell for the first time since 2011. the value of food sales for a third straying month. philip hammond will be delivering his first budget tomorrow weeks before prime minister theresa may triggers article 50 and begins britain's eu divorce. hammond is expected to take a cautious approach to spending after he said he wanted to make sure the uk had enough in the tank for brexit. john rathe is with us, head of uk strategy and economics for ubs. is there enough in the tank? depends on how you look at it. there's not very much in it if you consider the uk is running a sizable deficit. there's still sizable debt and continues to rack up.

it's a counting fiction to say there's money in the tank. what i think we'll see is a cautious budget that gives them leeway to respond if things start to come off the rails more seriously over the next couple of years. >> what do you think the most important point from expectations are in the budget? >> depends. for the markets, it tends to be the near-term forecast, they're more certain and drive gilt issuance and have the immediate impact. in the bigger picture is the growth forecast for the years that follow. for us, as it's a two-year process towards the process, growth slows down. just starting to see signs of that emerge. if those intensify, that is rightly to take us right to the deadline. if you look at the forecasts the obr came up with, they expect a slower year this year than last. but then a reacceleration.

it will be interesting to see if they pare that back. >> they see earnings grow s gr the uk economy picking up. you disagree with that. >> they have it picking up north of 3% over the next three years which is the rate the earnings used to grow out pre crisis. for us one of the drivers over the next couple of years is uncertainty around corporate investment plans and hiring. you would think if that's right, companies would become more defensive than optimistic. we think wages will be stagnant, and as inflation picks up, it spells trouble for the consumer and perhaps you were talk about the vrc numbers, perhaps these are the first signs that consumers are starting to feel the pinch because inflation is accelerating and wages aren't. >> how does this impact gilts? we know this budget will be

fiscally neutral does it have any impact on gilts? also want your take on the gilt market, because goldman sachs said these are one of the most overbought papers within g7. >> a lot of forces rimare impacting gilts. worries about growth outlook are intensifying. but what that does ultimately mean is that you may have to have more borrowing to support the economy and tax receipts may not be what you would like them to be in a weaker economy. so there are conflicting forces. what's perhaps most important initially is whether overseas investors keep buying gilts, which they have been heavily. >> but they stopped. we saw some outflows. we saw about 7 billion of outflows following more than 30 billion of inflows. if you look at the longer term averages, overseas investors are

not behaving differently as they did before the referendum. that could change over the next couple of years if they view the uk in a different light because of the way negotiations are proceeding. there are potential implications from gilts for that. we suggest they might be outweighed by the possibility that if growth starts to slow, the market has to price in a higher probability that the bank of england may have to do more qe. the scale of buying they've done in the past is significantly greater than the pace at which overseas investors buy gilts. >> so you don't think european investors may have to hike rates to combat the rise in inflation? >> it's possible. it's possible what wi. what will force their hand is if growth continues for the next two, three quarters at the rate it was going at back end of last year. inflation will be heading towards 3% that will happen because of the weakness in sterling. if growth is strong for a significant period of time,

their hand may be forced, but for us, growth will fade. that will become a more pressing concern than temporarily higher inflation. >> john, thank you. john rathe from ubs. daimler is extending its drive into electric vehicles. speaking to nancy at the ja noo geneva motor show, they are confident to mercedes holding on to the number one carmaker. we are heading into a break. more from the motor show after the break, we will also talk commodities. world markets live, that's our blog. take a look during the break. we'll see you in a second. at least the first two months, with 15% sales froth versus a very strong 2016, very encouraging. so, i would say my expectation

is yes to your question. >> your forecast for sales going forward has not rattled some investors. is this a mercedes slowdown when you look at sales growth going forward due to strong momentum of late or an industry new normal? >> we were very much in line with other people commenting on markets and prognosis for this year. we have grown by 50% in china, europe 10% over last year. we are very strong. we have no reason to believe momentum would slow down. >> you told us before it's too early to tell how you should change strategy based on the new u.s. administration's policies. given they are still evaluating a border adjustmentproposal what would your message be to the impact it may have on your business? >> we're very much convinced all

parties benefit from free trade. we heard some statements from the president going in the same direction. if there are imbalances on the way free trade is orchestrated, this might be something to be discussed. we are still in the first 100 days, we still don't have specific decisions where to go. we trust ultimately we will see something which will not hamper free trade, and we are strong in the u.s., we have more than 20,000 workers in the u.s., so i stay optimistic for our business in the u.s. >> on the importance of free vad in euro trade in europe, would you encourage the uk government to put forward some deal for free trade across the borders? >> even though i'm part of the auto industry, i think the best would be to keep trade open for all industries. again, in the interest of both sides what i'm hearing now to my

understands is that there are preparations for negotiations, not the outcome of negotiations. and therefore, again, i -- i'm -- i am guardedly optimistic that the ultimate decisions will be not that negative for business. >> can i get your thoughts on the big headline for the industry out of the psa and opel deal. speaking to peugeot's boss, they are making a push into premium as a growth area. will they become a more formidable competitor for mercedes? >> i think there are many volume manufacturers who have had this objective for many, many year. very few, if any, have succeeded so we're not getting excited about this statement this is part of their big action that they have decided for. you have to support that by arguments. >> you know gmc and marry barra

very well, was this a good move on her part? >> they have many, many years of difficult business in europe. i understand they want to fix it. on the other hand opel showed improvements in recent years. of course it's not my role to make the decisions or comment on the decisions, i hope for opel it's the best. that's what is important, the people working for opel and customers buying for opel. >> can you give us more details on when mercedes cars will become available as part of an uber fleet and which models? >> partnership is a big word. what we did is that we discussed that between the platform available. on the other hand autonomous cars being developed by us. there could be a match, and

there would be a deal for mer sa mercedes autonomous cars on an uber platform. >> do you think it will be more inevitable that we'll have more partnerships between oems or more consolidation down the road? >> as far as we're concerned, i don't see big benefits of consolidation. i know we are very strong with our balance sheet, our company and technology. we will good our direction alone, but partnerships like we have with renault, for instance, nissan, are beneficial. these partnerships can include partners from outside the classic automotive industry as well. to add competencies from different directions makes sense. we're open to that.

here are your headlines. european stocks fail to break into the green. the ceo of psa tells season as soon as that he can turn opel around as shares in the french carmaker enjoy a second day of gains. >> the company in the red for

several years is not sustainable. we think we can help. i think the level of talent and education we have at opel this german brand can be unleashed. jaguar land rover races into electric, but the ceo warns president trump's border tax could hurt trade. >> we don't have an operation in the u.s., so lowering the corporate tax but increasing the border tax will really cause us difficulties. nancy spoke to the nissan ceo and asked what he needs to do to step up against his rivals. >> practically not far from 10% market share, which is the goal we've given ourself based on the strength of the product, dealers and distribution system of nissan in the united states. so i think this progression is not going to stop there. we'll continue.

the fact that the u.s. has reached a kind of peak with 17.6 million cars, and now it's competitive, we'll participate. we are not worried. it's a profitable operation. profits are growing. we have to be competitive. we will continue to grow. >> on the competitive side, many worry about the possibility of a tariff being slapped on the border. nissan has extensive production in mexico. i understand it's too early to tell what the administration will do, what is your message to them? how much will this damage not just you but the industry? >> look, we are used to dealing with the different companies. we change, political change, agreement changes, this is not an exception. we won't react on speculation about what will happen. there are so many possibilities. we will react when the decision is made. we will have to adjust our supply chain in consequence of the potential decision made by the administration. i'm not so worried.

frankly i think nafta is so much in the interest of all the parties, that there may be a tendency to say it's free, but it should be more fair. we need to rebalance it with nafta. this agreement was 20 years old. and the reality today is different from what it was 20 years ago. it's totally normal. i'm not expecting a big bang. i'm expecting some adjustments. we'll be part of it. >> when you look at your strategy over at renault, peugeot just passed remembnault nissan, are you worried about increase competition from opel? is this a wise move that was made? >> this industry is going through consolconsolidation. we are participating. renault nissan in addition to mitsubishi is selling about 10 million cars. we are one of the top three automakers and not far from the top of the industry. i won't complain on the fact

that competitors are doing the same thing. it's totally normal and fair. scale is a problem if you don't know how to use it. then you become heavy, you don't react quickly. if you know how to use scale, it's a huge advantage for you. we know how to use scale. for us, bigger is better. >> do you think the applianllia could turn into an outright merger when you talk about consolidation? >> i don't think you need a merger to make the synergies. i think you can operate the way renault nissan is operating today, keeping the autonomy of the company and keeping the company separate. you can make synergies work. that's the road we have taken. does it mean we don't know how to work a merger? yes, we know how to work a merger. at the moment we don't need it. for the moment the conditions are not united to see clear advantage for a merger towards the way we work now. >> the dig investment course for

consolidation is the extensive r & d budgets, when you talk about innovation. also concern over emissions changes, and the need to rejig engines, if you will. yet again talking about regulators coming out in france saying they're investigating renault once more. you're saying your engines are compliant. why the continued probe? by the way, regulators are not investigating one company, they're investigating many companies. on top of this we've said we're open, contributing, not worried because we follow all the regulations and laws. without doubt, the fact that emissions will be stricter, more tougher, on the fact that there are a lot of breakthroughs in technology, electric cars, autonomous cars, the fact that carmakers need a global footprint, you need to be present in the markets of the world and our offer needs to go from low-end product offer to the premium, that's what is justifying the consolidation. you cannot face all these needs

if you are a small carmaker. you need to, in a certain way, invest in all these areas. if you cannot do it by yourself, you need to look to somebody who can do it. the logic is absolutely impeccable. we will see more consol dag. >> n >> nancy also spoke to the leader of the psa group and asked if the carmaker bit more off than it can chew with the gm deal. >> we can show them what we have done with psa over the last four years. everybody is looking around, seeing the results, and we are trusting people. because we trust people and succeeded in our own turnaround, we may have a chance to turn opel into a great company. we believe our group will be reinforced by this german brand that will be totally complimentary with our french brands, hence a lot of excitement but also a lot of work. hard work ahead to make sure we can unleash the potential of

opel. >> as part of that potential you're targeting a european champion. part of the penalty of being that big is you often catch the ire of politicians. a lot of concern surrounding anticipated job cuts you may have to make to meet your significant synergies, the cost saving goals. how will you meet those targets without job cuts? >> there is something striking. nobody cared about the fact that for more than ten years opel was making red ink. for everybody it was okay. no problem. as soon as somebody comes in and proposes a solution, ten everybody asks the question. well, the problem is there. the problem is there. we are here to help. the psa group has made this acquisition to help opel to become sustainable, profitable company. to solve the problem that already exists is that a company that is making red ink for ten years is not sustainable.

we think we can help for a simple reason. we were in the same position four years ago. being in the same position four years ago, having successfully completed our own turnaround, we can help opel, all the politicians were asking the questions you mentioned, they should be reassured by the fact today there is a company willing to help opel. and i trust the talent of opel people. i know they're willing to improve themselves. we are going to supply them as an open book. easy way of comparing their performance against psa group. >> does that suggest a few job cuts here and there is worth it for sustainability in the long run? >> since i took the helm of psa, we did not shut down any plant of psa. this is not how we solve problems. shutting down plants is a simplistic way of looking at things. before that, we have tons of things we can do to improve the

efficiency of the plants, doing what we do online, internal logistics, we working the plant. many things we can do in the plants to improve efficiency. we want to give all the good ideas, best practices we have implemented in our own plants. i'm sure they're bright, well educated, and they will understand it's in their best interest to copy an paste everything we have done so far. with the level of talent, education and passion by opel, this german brand can be unleashed. >> nancy, you're still at the geneva motor show. a busy morning for you. it seems there's still quite a bit of optimism from within the car manufacturers. >> absolutely. coming from the ceo of the psa group there, he's saying i'm not biting off more than i can chew in this environment, when you look at this industry,

consolidation makes sense. he also has a message for governments warning about job cuts, he says at least we're coming in to help. when you look at the red ink of opel, he said it wasn't sustainable. there was a message that even if it becomes inevitable, they will be better off in the long run. we had the bites of the ceo of the renault ceo group, he used to be the boss of carlos tavares, he said he wasn't worried about competition, but predicted this ages ago. he did send a message that scale is important if you handle it correctly. we know there are plenty of skeptics out there who worry that as a result of the psa and opel deal, that perhaps a successful company could get too big for its bridges. carlos tavares is quite

ambitious at being a european champion. >> coming up, we hope to get reaction from chrysler fiat. the chrysler fiat chief was hoping for a merger with gm over the years, we will see what he thinks about this headline that continues on here. >> let's look at u.s. futures, a couple hours away from the start of u.s. trading. here's the picture. looking at a negative picture. the s&p 500 off by 2 points. the dow jones set to fall just fractionally. the nasdaq seen off by 5 points. this after small losses for stocks across the board yesterday. the dow, s&p 500 and nasdaq saw their third decline in five sexes, cond sessions, as this trump rally keeps fizzling out. the xetra dax is clinging on to some modest gains, the cac 40 is down by a quarter of a percent. we are broadly lower for the fourth day in a row. once again weighed down by some company results.

casino in france was a disappointment. in the currency markets, it's all about the dollar. the dollar has stabilized in asian trading. euro/dollar 1.0574. the australian/dollar 0.7590. no dovish buys. coming up, dismantd dismanta care. we'll bring you up to speed on the latest republican proposal. that's after the break. we also will talk about what you should think about in regards to commodity investment.

welcome back. you're watching "street signs" on cnbc.

republicans have unveiled the long-awaited legislation to dismantle obamacare. they're calling for the end of health insurance mandates and to roll back extra healthcare funding for the poor. the proposals drew immediate fire from democrats. it's unclear where president trump stands on the details of the proposal and the fate of the plan is uncertain. donald trump signed a revised executive order banning citizens from six muslim majority nations from traveling to the united states. he removed iraq from the list after his controversial first attempt was blocked in courts. peter alexander has more. >> reporter: nearly six weeks after president trump first proudly unveiled his controversial travel ban, touting extreme vetting, a far more resolved rollout today out of public view. the white house tweeting this photo of the president signing his revised executive order, the formal announcement delivered instead by top cabinet secretaries. >> this order is part of our ongoing efforts to eliminate

vulnerabilities that radical islamic terrorists will exploit for destructive ends. >> reporter: what's changed? the new guidelines propose a 90-day ban on six original countries, removed from the lidge nall list, iraq. green cardholders now exempt. also deleted, a preference for religious minorities. the new order bars all refugees from entering the u.s. for 120 days but no longer singles out those from syria, formerly banned indefinitely. the guidelines effective march 16th, ten days from now, despite the president's initial claim, the bad would rush into our country. press secretary sean spicer says the courts undercut that argument. can americans feel safe? there's a 10-day delay right now. >> of course they can. it's a fully-coordinated effort. >> reporter: with new protests tonight, the ban is likely to face legal challenges with several statements in the aclu reviewing their options. >> the language of the first executive order all revealed that what is essentially going on is a ban against muslims. the fact that they've tweaked the order does not eliminate

that taint. >> reporter: an iranian grad student finally arrived back in california last month, after the president signed the first ban, she was detained at 23 hours at l.a.x. and then deported. tonight she worries the new ban won't be temporary. >> if we look at history, whenever whole groups of people have been discriminated against because of their religion or where they come from, terrible things have happened. >> the iraqi army has received a timely boost in mosul in its fight against isis after retaking the main government buildings there. elite security forces stormed the complexes overnight in a raid that lasted about an hour according to military officials. the city's major museum which was looted and damaged by the militant group, was also recaptured. this is an important area for the assyrians. it's an old and historic area. the gains are expected to

provide a strong pralatform for beginning on removing isis from the old city. and exxonmobil has announced plans to invest $20 billion on u.s. gulf refining projects. the investment would create around 47,000 jobs. jackie deangelis has more from the energy conference. >> it's the super bowl of the energy industry, attended by movers and shakers in the global oil and gas industry. not just big oil but also shale players and representatives of the world's major oil from dupr nations and opec. the central them is how to operate at this delicate time when oil prices seem to be sticking. ceos are approaching the environment with caution though they are enthusiastic about what is to come. doug lawler says it is important to remain nimble. >> what's important for u.s. producers, a company like

chesapeake, the strength of the company, cost improvements, we're well positioned in this $50, $55 barrel window and continue to invest. >> trump administration policies can also change the game. a pro energy and infrastructure driven policy stance is expected to helicopter industry thrive as the u.s. moves towards its goal of energy independence. policies aside, it's the technology making companies more efficient and competitive. in some cases getting twice as much out of each well than had been possible before. >> the continued improvements in technology have been remarkable. one comment i like to say is don't underestimate the ingenuity and non-investigation of t noninnovation. >> most players are still cautious. policy changes and other surprises could disrupt the

delicate balance of supply and demand. jackie deangeles, cnbc business news in houston. >> cnbc will speak to industry leaders, including the saudi oil minister, the bpc ceo. >> let's look at oil prices. brent crude up 0.09. we are joined by robert crepeford. good morning to you. let's talk about the oil markets. we have two offsetting factors. on the one hand, the opec production cuts. on the other hand, rising production in u.s. shale. which of these two factors will be the biggest driver for oil going forward? . it's difficult for opec. they're heading into the may 25th meeting, they will be looking at themselves handing shares to the u.s. it will be difficult. some of those earlier comments suggested or highlighted that we are seeing increasing efficiency

coming out of the u.s. we're not seeing that cost inflation that many expected that could weigh on u.s. production. >> we had comments overnight from the russians and iraqis talking about whether this agreement might be extended. they say it is too early to say. it is set to expire at the end of may. do you think there's enough to extend it? secondly, will it make a difference in the face of rising production in the u.s.? >> if they want to sustain oil prices, they may need to make further cuts. but there's a clear difficulty in trying to ensure that non-opec members that joined in with the cuts complied. there are remarks from russia saying 50% of their cuts. whether they honor those cuts cis key. >> what is the base scenario for you? >> we are working around a $45 to $60 level.

it depends on the trajectory and the actions of opec. >> do you think the links are still in place with regards to a strong dollar and the knock on impact with commodities? i read an article yesterday saying we should no longer be looking at a strong dollar, which means weakens in commodities. >> if you have a strong dollar, that will weigh on u.s. producers costs. but with the dollar in general, it will always naturally weigh on commodities and one of the key ways to play that is look at producers that operate in non-u.s. based currency. >> when it comes to basic resourszr resourc resources, we have seen the likes of bhp paying hefty dividends. it seems like we're back into the commodity super cycle. are we really? is this sustainable? >> i believe we are.

there's one message that's loud and clear, they are paying back debt and focusing on dividends. none of them were focusing on new projects, bringing on new capacity that would loosen that supply demand balance. >> are you not worried about what's coming out of china with the official growth target being revised down to 6.5%, then you have on top of that protectionism coming from the u.s. administration? all of this bodes negatively for basic resourszceresources. >> when we look at china, we look at it more from the supply side. so these huge environmental measures that are being implemented, seeing wide swaths of cut across coal, the smelting industry, down to focus on air quality. if we see an impact or rather the trump administration moving to resource obama's subsidies to renewals, what type of impact would we see on commodities? >> would level the playing field. one area that we look at quite

closely is nuclear. at the moment nuclear is a fairly niche subset within resources, but we're constructive on that. so, yes, it would level the playing field within the u.s. certainly with regards to pricing. but there are other strong dynamics within that that we see as positive. >> how do i play nuclear? >> well, uranium producers would be key. on the mining side. but there are a limited number of ways to play it. >> any particular? if i come and i say to you, look, i'm interested in this area, i want to get in. what's the best way? >> where the market has been, a lot of the companies are small cap or with struggling balance sheets. we prefer those companies that are in the exploration side. uranium prices down about 90% from the prior peak. following the cuts from the kazaks around 35%, 40% of global production, we believe the market will be much tighter going forward. we prefer to focus on companies

with strong exploration assets and bringing on production in four, five years. >> final one on gold. that's a tricky one. we had a guest on the show from commerzbank extremely bullish about gold, saying you have to buy gold and buy bullion in the face of the political risks coming out of europe. on the other hand you have the rising dollar and the fact that gold doesn't pay yield, treasury yields are going up. what do you do with bullion? >> i agree with the direction but i argue you should own equities. gold doesn't pay you a yield or give you growth. we prefer to focus on equities. we focus on the smaller cap miners, because we believe there will be a big m&a cycle coming through from the stronger pricing they've seen, strong cash flows. we believe they'll be acquiring those. >> thank you very much for that. >> we need to glance at the u.s. futures and how we're setting ourselves up for trade in the states. 4 1/2 hours away, the implied open looks similar to europe

ahead of the open this morning. we're hanging on to these pretty flat markets still. >> last week, we saw so much about the trump administration, i guess this mratd tplateaued t week. >> and non-farm payrolls. >> even if they're bed, cad, ca fed undue what they've said? it's priced in at about 96%. stay tuned for our interview with the aston martin ceo out of the geneva auto show. i'm carolin roth. >> i'm louisa bojesen. "worldwide exchange" is up next. bye for now.

. good morning. stocks slide. the major averages lose their grip on record highs as financials lag. replacement revealed. the long-awaited republican plan to repeal obamacare has been released. what the proposal means for the economy, insurers and consumers coming up. and soda tax spillover. two months later, we're seeing the economic feblgt effects on philadelphia's tax on sweetened drinks, and it's not a pretty picture. it's tuesday, march 7, 2017, "worldwide exchange" begins right now. ♪