. good morning. welcome. you're now watching "street signs." i'm louisa bojesen. these are your headlines. restyling at christian dior. lvmh and the arnault family offer to completely take over the group in a bid to simplify the business, sending the shares sharply higher. seeing the clearer picture. novartis sees a drop in core income as demand for its heart failure drug remains soft.

whitbread falls to the bottom of the stoxx 600 after the costa coffee owner says it expects the consumer environment to worsen in 2017. ericsson promises to continue with cost cuts to improve profitability as the swedish firm posts a wider loss than expected in the first quarter. we will speak to the ceo at 11:20. >> good morning, everyone. glad you're with us on "street signs." one of our main stories, lvmh and its majority shareholder, arnault, are set to completely take over the christian dior brand. claire is at the lvmh press conference in paris. i can't get over this 12 billion euro deal. when looking at history and how christian dior started selling sketches for pence back in the '20s. >> yes.

and this is a move that is appreciated by the market. you were talking about the performance of the stock, because it has been requesting that lvmh simplify its capital structure for a while so in a move to do that, the number one luxury group announced a public offer by the arnault family on christian dior shares. you have to remember they own 71.4% of the company. so this public offer at 6.5 billion euros is about to value christian dior share at 260 euros. that's a premium of 15% over the closing share price as of yesterday. now, among the objectives of this operation that we'll hear ben arnault talk about in a couple minutes when he starts his press conference at lvmh,

among the objectives are to boost earnings. it will boost earnings per share within the first year of completion. that's what the group is saying this morning. and it will also reinforce its leather goods and fashion division, which, as you know, is one of the most iconic brands in the world. and just so you know, the christian dior couture division has doubled over the last five years. >> claire fournier thank you very much for that. here in europe, we opened relatively flattish, a couple points higher after the stellar day yesterday. we had massive gains pretty much across the board. led by the banks, the cac up by more than 4% yesterday. that was the biggest one-day

jump we have seen in five years or so. so we're seeing just a bit of tapering off in this morning's session with markets being slightly mixed at the moment. healthcare leading the way higher. technology, household goods up, and we're waiting for trump's promise of this incredible tax plan we're supposed to get tomorrow. so maybe we're sitting tight and waiting for that to happen. shares in whitbread have been trading at the brottom of the stoxx 600 after it warned it expects the consumer environment to worsen in 2017. the company reported full-year 2016 revenues of 3.1 billion pounds compared to 2.9 billion pounds seen just a year prior. volvo group, they reported first quarter profits of 4.8 billion swedish krona topping

estimates. up by more than %. they are maintaining the outlook for the european and american markets but see positive signs of increased order activity in north america. incidentally also i was looking closer at this one, some better sounds coming out of china as well. we'll speak to the ceo of volvo, martin lundstedt, i'll talk to him in about 25 minutes time. do stay tuned for that. the french presidential finalist, marine le pen said she is taking a leave of absence from her role as the leader of the national front party as an attempt to broaden her appeal before the next round of voting. speaking on french public television, le pen described herself no longer the president of the national front but as a presidential candidate.

now a number of european leaders have weighed in to support emanuel macron in france. the italian finance minister said he thinks macron is the best candidate. >> i think it's good news for europe and the world. number two, let's wait for the second round. its good news that macron gained the first round also because he has a strong pro european and pro market program. the former ecb president, jean-claude trishe also expressed confidence that macron will come out on top in the second round of voting telling cnbc that macron represents the views of majority of the french people. >> it's extraordinary likely that macron will win. this is in line with the survey we have in the second round and fully in line with the very, very strong desire of the french people not to leave the euro. 72% of the french people do not want to leave the euro. so -- and europe.

so i don't think from that standpoint we have any real doubt. paris hernand is head of equities at fidelity. good morning. what do you think, is it a simple equation of buy europe, buy european banks given that supposedly macron is so far ahead in the polls heading into the second round? >> so, think what i would probably do is strike a small note of caution. so i can very clearly understand why markets have reacted so positively in the short-term to the outcome of the first round of the french election. i think it's premature to think of macron or any development in politics to be incredibly meaningful for the medium term outlook for markets. let me give you a couple points on that. the first is that it's noteworthy that macron in the first round had a low vote for a presidential candidate.

sort of 23%. typically presidential candidates are much higher. and even if people think that the second round is sort of a forgone conclusion, what becomes important is what happens in the legislative elections. what you got in this particular situation is interesting where you got two candidates, macron who has no mps, and le pen who has two mps in a claim bhamber mps. in terms of the mandate, you need to see how the legislative election goes. >> do you think it's a sign that europe still is here to stay, that we're not going to be looking at a break up of the european union, and that we can rest in this notion that the eu will continue? >> i think that's probably, you know, one of the ideas that i think is behind the sentiment, the positive sentiment reaction that we see. my sense is that i think the

direction of travel for europe was generally already set. which is that we're going to have a slightly sort of loser association of europe, but a europe that's a functioning one. if you add the votes of the popular votes of le pen and melenchon together, you still have 40%. so that is still representing a reasonable percentage of the population that are sort of against, if you'd like, the establishment. so it's not as if we haven't had some element of the same sentiments that have been behind the populist votes we've seen elsewhere. but i think that even if you were to have had, you know, which i think seems unlikely now, a le pen victory as trichet said in your previous piece, a majority of people wanted to remain with the euro, doesn't want to depart from europe, that likelihood of a euro breakup was

quite remote under that sort of scenario. i think you end up in this sort of middle ground where people sort of want europe to remain together, but are not perhaps, you know, bought into the idea of the european super state that brussels would like us to think about. >> i spoke to a fund manager a couple days ago who said i find these markets hard to navigate. i found that quite interesting, quite cure owious. you look at the market performance, we seem to be doing well. buy anything in equities, stuff is going up. we come off a bit in april, but by in large this rally seems to be intact. do you feel anything is changing? do you still believe in buying equities at the moment? do we take profits? >> my view, when i think about the markets on an aggregate level, so you look at the broad level of the indices, i think that the prospect for the broad market, i think, are relatively neutral. either the markets have traveled

a fair way over the last few years absent any material earnings growth from the corporate sector. the markets have re-rated to quite an extent. i think whilst i'm much more sanguine and positive for the global economy, you could be in for a period of consolidating markets. so i think that on -- whilst i'm positive about individual equities within the markets, especially given some of the degree to which those stock prices have been influenced by top-down factors and sentiment and all of these things, i think for the markets overall i would probably temper optimism a bit. >> okay. if you're staying with us, i have many, many, many questions. it's your show. by all means get involved. write in. you can find us on twitter at @louisabojesen. if you want to have paras any questions. oh.

oh. the lights just dimmed. this may be a sign. coming up, north korea celebrates the 85th anniversary of its army's foundation. we'll take you to korean border to get the latest on the political posturing in the region. we'll talk about what's going on there after the break. again, on twitter at @louisabojesen and e-mail, streetsignseurope@cnbc.com. er up all night. she said the future freaks her out. how come no one likes me, jim? intel does! just think of everything intel's doing right now with artificial intelligence. and pretty soon ai is going to help executives like her see trends to stay ahead of her competition. no more sleepless nights. - we're going to be friends! - i'm sorry about this. don't be embarrassed of me, jim. i'm getting excited about this! we know the future. we're going to be friends! because we're building it.

good morning. welcome back. you're watching "street signs." i'm louisa bojesen. north korea has reportedly staged a massive live fire drill to commemorate the 85th anniversary of the founding of its military. this as tensions in the region continue to escalate after the docking of a u.s. submarine in south korea. the show of force comes amid rising fears over pyongyang's nuclear program.

seema mody spoke to south korea's finance minister and asked if regional risks are taking a toll on the country's economy. >> many people are worrying about the geopolitical risks there. yes, there is some, but as far as the impact on economy is concerned, i believe that the so-called geopolitical risks have some limited impact. it has been so for over those years in the past. it has been so. there has been some. well many instances. they had nuclear threat, then they had some other threat. even with all those past incidents, the impacts on korean economy has been somewhat in our terms limited. >> so it's an ongoing risk that

your economy and country has had to deal with but the fact that we've seen a rise in military strikes from north korea, is your country and your government now preparing for the potential risk of a war taking place and the larger impact that could have on your economy? >> well, as far as worry is concerned, i don't know. i'm not in position to say there's something detailed about that. however i guess we have been, we have always been preparing for these circumstances over the last seven years. so i believe we are -- we are ready for any -- any i would say problems. >> chery kang joins us live from the border between south and north korea. good to see you this morning. there are worries that we could be looking at north koreac chondromalacco conducting its sixth nuclear test, this in association with the 85th anniversary of the

military. what are you seeing and hearing from where you are? >> thank you very much. good morning. we did not see north korea testing its intercontinental ballistic missile or carrying out yet another nuclear test. instead north korea marked this military foundation day anniversary with a large-scale live-fire drill and coming out with harsh war of rhetoric. this is the typical north korean way of showing its force, seeing if the u.s. and its allies come out with preemptive strikes against north korea, they will be faced with the most brutal punishment in the sky and land as well as at sea. and including under water. i think given what's happened with these traditional ways of show of force on the part of north korea, i wonder if that's going to be it for now. i think the risk or the cost of

going out with some big provocation, such as a long-range missile test or a nuclear test have become a little too much for north korea at this point. yes, the trump administration did say the strategic patience is over. so don't test us. we've seen a bit of a difference in china's attitude in all of this. so i think the pressure was on kim jong-un and it was a bit of a tough choice for kim jong-un to go ahead with some big provocations today. >> chery, thank you very much. chery kang joining us live from cnbc on the border between north and south korea. always interesting to turn things around, not agreeing with any sides at all, i'm a huge pa pacifist, but imagine north korea docking on the canadian

border to the u.s. it's interesting to see this posturing whether it serves a purpose. >> absolutely. i think we're in an environment where, you know, there is geopolitical events, but they sort of carry with them quite a different feel to them. there is, as you say, a lot of posturing, positioning. but i think it's all about these sort of relative sort of power plays and positioning and perspective. it just goes to show we are, as i was reflecting earlier, still in a fragile environment. >> we are. any country that has "the enemy" docked on that border would feel threatened. >> absolutely. let's move on. more of a philosophical thought. first quarter net income at novartisf novartis fell by 4%, the swiss drugmaker confirmed the outlook for ahead but said 2017 will be

a transition year as it spends healthily on ailing eye care unit alcon. ericsson posting a bigger than expected first quarter lost with 23 billion krona. shares are off by 2.5% at the moment. over the past 12 months losing almost a fifth of its value. the telecom equipmentmaker sales also missed estimates. the company said it was taking a more prudent approach in assessing risk exposures given the current market environment. i'll be speaking to ericsson's ceo at 11:20 cet, so in an hour's time, borje ekholm will be joining us. staying in sweden, swedbank has beaten first quarter net profits supported by solid domestic spending. loan losses fell on the quarter coming in below estimates of 339 million swedish krona.

the ceo told cnbc she's optimistic on sweden's outlook. >> sweden fundamentally is doing well. the macro is strong. this is what we see. we also -- this is what we see in almost a subdued demand on the corporate side for lending. the corporates, cash risk, they finance themselves on their own cash flow. so i think that we are in a good place at the moment. the big challenge is the housing market that needs political initiative and strength and action. and that's not really happened to tell you the truth. s.a.p.'s first quarter operating profit has fallen fractionally short of estimates as its pivot to the cloud diverts sales from higher margin products. revenues at europe's biggest softwaremaker grew quicker than the market had been

anticipating. the ceo, bill mcdermott joins cnbc at 14:50. paras is still with us. do get your questions and your comments through on twitter, @louisabojesen and on good old-fashioned e-mail, streetsignseurope@cnbc.com. i want to get to a couple viewer questions first to recognize those of you writing in. barry says hello. with london residential property prices sliding badly, are commercial properties going the same way? what do you think in terms of the overall property market? >> i think we know some of the reasons that the london residential market has been under pressure over the last 12, 18 months. from a commercial perspective, if we take a longer-term view, yields are low. so commercial property is not offering a huge amount of value. i would say the fundamentals are kind of relatively mixed.

it's sort of tallies with my sort of medium term outlook for asset prices more generally. we've been in a cycle where a lot of -- it's quite unusual for an economic cycle to get so much of the asset price inflation coming at the early part of the cycle almost as a result of the monetary stimulus put in place. that's something to bear in mind. >> do you think the bank of england is going to be faced with the conundrum of do we hike rates earlier than anticipated given the inflationary scenario heading to the upside? do we, you know, look at the risk environment still and keep rates low? this is very much a personal view. i think most central banks are in a similar position, which is that they're looking at the raising rates as potentially sort of being one of those events that sort of choke off growth. i suppose i have a different view of it. i think that actually, if we go through kind of a phase where

monetary policy and the rate cycles normalize, you could have a situation where economic activity accelerates on the back of that. b one of the things that's been absent, is the velocity of money in the economy has been very low. banking profitability has been low. lending has been quite low. so actually, you know, a normalization of monetary policy and a sign that we're on a self-sustaining improvement track could have a different impact on confidence than many central bankers expect. >> okay. i have a thousand bananas, i come to you today and i say i have to invest today. where would you put them? >> i say -- you know, you'll have to sort of forgive me for somewhat sort of, you know, like warren buffett question, never ask a barber if you need a hair cut. but when i look at the relative value of equities versus fixed income, i think that equities

become a very interesting sort of relative allocation, especially if you believe we'll see a normalization in inflation going forward. so, i'll give you a good indicator of that. if you look at the european equity market, fully 80% of the corporate sector has a dividend yield higher than the corporate bond yield. so your yield pick up through investing in stocks in the short-term -- these are often real yields. >> ten seconds, which markets? >> i think i would look at the uk. i would look at europe. if we're looking more globally, japan is interesting. >> excellent. you got out with two seconds to go. paras, thank you very much. we need to take a short break. world markets live is our blog that goes all over the place throughout the european trading day. find us on twitter, @louisabojesen or on email, street stroet street.csi.

com.

good morning. welcome, you're still watching "street signs." i'm louisa bojesen. these are your headlines. restyling at christian dior. lvmh and the arnault family offer to completely take over the group in a bid to simplify the business, sending the shares sharply higher. seeing the clearer picture. novartis sees a drop in core income as it battles to revive sales at its eye care unit.

demand for its heart failure drug remains soft. whitbread falls to the bottom of the stoxx 600 after the costa coffee owner says it expects the consumer environment to worsen in 2017. ericsson promises to continue with cost cuts to improve profitability as the swedish firm posts a wider loss than expected in the first quarter. we will speak to the ceo at 11:20. in just under an hour's time. that's a first here on cnbc. hi everybody. welcome back. you're still watching "street signs." happy you're with us this morning. yesterday, what a day. what a day. big rallies happening in europe. big rallies happening in the states. of course earnings season is upon us as well. let's glance at the u.s. futures and see how we're shaping up for trade today. nasdaq hitting another record high yesterday. higher by 1% on the close.

same for the dow and s&p. both of those up by 1%. strong earnings season so far. 77% of the 100 companies in the states have beat earnings so far. this week more than 190 companies from the s&p 500 report first quarter earnings. the likes of alphabet, microsoft, some of the biggies. the implied open for today is pushing us higher. let's not forget trump's promise of this incredible tax plan. we get that tomorrow. here's in europe, we're a little bit mixed now. couple markets just treading water, trading a bit flat to lower after the dax going completely flat. you have the rest of the markets hanging on to slight gains out there. coming off the back of some very, very strong showings, especially in the banking sector yesterday. would have noted the cac up by more than 4% in yesterday's session after the first round of the presidential voting was done

this past weekend. so a bit more clarity there. today the cac just taking a breather hanging on to those gains, 52.71. when it comes to the fx markets you would have noted on monday, yesterday, the you'euro gaining 1.5%, sitting at a five-month high. just a bit under those levels from yesterday. 1 1.08 and a bit. the canadian dollar falling. as i was saying, president trump could be delaying the payment for his border wall to much later in the year. a white house correspondent has told cnbc he could push out the cost of the wall with mexico to

avoid complications about a potential government shutdown. the trump team is looking for some big plays to mark his 100 days in office this weekend. kristen welker has more details. >> reporter: with the president's first 100 days in office fast approaching this saturday, the government is set to run out of money midnight friday. could shut down and potentially cloud his first major milestone. today his press secretary sounded confident, but offered no guarantees. >> can you guarantee there will not be a government shutdown? >> i can't guarantee -- but i feel very confident that that won't happen. >> reporter: the biggest sticking point, the president insisting he wants the spending bill to include funding for the border wall, but for democrats who are opposed to the wall, that's a nonstarter. >> this is ultimately on donald trump. >> let me tell you, it will be the democrats that shut this government down to block the funding of the wall. >> reporter: and while the president is trying to downplay

the 100 day benchmark, calling it a ridiculous standard, there's a frenzied push to notch some last minute wins. including a second try at health care reform, his biggest legislative push to repeal obamacare failed the first time. on monday he's set to unveil his tax plan. according to some advied advis, that plan is designed to make good on a campaign promise. >> we are going to lower taxes. >> reporter: slashing the corporate tax rate from 35 to 15%. when it comes to actual achievements, so far the president's legislative record is thin. trump's signed 28 bills, 13 roll back obama-era rules, 9 are ceremonial. and only 6 have legislative substance. this comes as the new nbc news "wall street journal" poll shows trump's job approval rating stands at 40%. the lowest for any president at this point in the history of the poll. >> it's like ratings week, right? let's throw everything at them and give them the razzle dazzle and give them a great show, maybe that will move the poll numbers, but i'm not sure it's going to work.

president trump that been criticizing china for dumping cheap steel into the u.s. market and he has vowed to put a stop to it. his decision last week to review steel imports in the name of national security is the latest effort by many of china's trading partners who have been calling on beijing to reduce its massive capacity in steel. eunice went to the northeastern part of the country to find out why china won't act. >> reporter: china's excess steel is raising tensions overseas and sensitivities back home. we came to the town two hours from beijing in the northern province which makes more steel than the entire united states. washington has accused china of flooding global markets with cheap steel. beijing has repeatedly issued plans to reduce production but those efforts have not gone far enough. analysts estimate operating

capacity in china actually increased last year as local officials, investors and banks keep mills open so workers can stay employed. behind me is the local steel mill. the townspeople say authorities here have repeatedly over the years instructed the steel mill to pull back capacity, but last year they found they expanded capacity. that was a problem for china. and quickly became a problem for us, too. we have only been at steel mill for a couple minutes. the police already stopped us from filming. they blocked us and aren't letting us leave. i think it goes to show how sensitive the issue of steel and excess capacity has become in china. factories producing steel or steel-related products here are struggling to find new places to sell, both in china and abroad. we've put greater effort in our sales to much the production this businessman says. the government has closed some

factories, but production levels have not dropped off. washington is losing patience. u.s. president donald trump has vowed to take tougher action against cheap imported steel which means china's. businessmen here doubt trump can force beijing's hand. "reducing capacity is a gradual process, he says. the government has its own proper and reasonable agenda to cut capacity at its own pace." but it doesn't want the cameras to show how slow that pace is. eunice yoon, cnbc business news, china. french banks rallying on the back of emmacronanuel macron's . today they're taking a breather. that's what investors were doing yesterday breathing a sigh of relief thinking who goes on to the next round of the election. gina sanchez joins us. good to have you back on again. >> thanks. >> i was asking our previous

guest the last half hour whether we just buy into the banks at this stage or whether it's too late. is there more to go. especially european banks. >> we think if you saw what happened in the first quarter there was trepidation, big concern around le pen's popularity. once that became clear, actually really once the election happened and macron started to gain some popularity, you saw pes starting to expand, except in the banking sector. the banking sector was very, very concerned. we didn't see the bounce. french banks bounced almost 6% yesterday. >> yeah. >> i think there's more to come. i think that it's still not over, but largely the world is basically saying macron has enough support from the traditional parties to likely lock le pen out of the presidency. and if that happens, then the banks can breathe a sigh of relief. so i do think there's still more value to be unlocked here.

>> i was looking at some polls. you are talking about beating her in the second round. some poles show macron defeating le pen in the second round on may 7th. we may be overestimating it. >> given everything that's happened over the last year, nobody is really placing a lot of value on polls. you know, a lot comes down to the turnout. voter turnout will make a difference for le pen. even for macron. at the end of the day, i think that what you're seeing is you're seeing a number of failed populism experiments leading into this determination to avoid going that route. >> what does the ecb do? >> well, hope? >> apart from hope and pray. >> at the end of the day le pen has pretty much promised to disrupt france's participation in the euro, if not move to try to remove them from the euro

which would be very, very negative for banks. you would see outflows of enormous magnitude. that's why the banking sector hangs on the balance of what happens may 7th. but the general view is that's not going to happen. there's really what can you do to avoid that? hard to say. >> do you think they paper taper by the end of the year? if we see macron rise to the presidency, we get past italy without much noise, that's -- you know, that's -- who knows what could happen there. >> another if. >> another big if. once we get past these issues, i see another taper. the business cycle is starting to support that and we're seeing inflationary pressure. i do think it would be healthier all around for the ecb to taper. because it would benefit savers. savers have just been destroyed over the last eight years. so i think this is the time to

bring back sort of a healthier environment that healthier environment involves taper and rates. >> you probably heard somebody yelling we're keeping you after the break which is a good thing. so i want to talk u.s. with you on the other side of the break. for now, in europe, what do you buy? where is the opportunity then today? >> well, obviously we were overweight europe relative to the u.s., because we saw so much bearishness, so many stumbles in the u.s. that we had to think that would influence the world's view on populism because the greeks failing at populism, that's one thing. the u.s. failing at populism f they can't do it, who can? so i think that sends a strong message. the first 1 00 days in my opinin have been disastrous. so this sends the message this is not the way to go. i think that you still have value locked up in european

stocks generally. obviously you still have the french stocks. you have the italian stocks, which have been laggards. but we saw such a big bounce yesterday. there's still more to come. >> huge bounce. massive bounce. gina is with us after the break. get your e-mails through, streetsignseurope@cnbc.com or directly on twitter. i'm keeping an eye on your comments, @louisabojesen. we'll talk more about the u.s. after the break as well. coming up here in the last bit of the program today, south africa's president zuma shocking the markets last month by firing his finance minister. cnbc sat down with south africa's new finance minister to find out if he's his own man.

hi everybody. welcome back. you're still watching streetsignseurope@cnb"street signs" i'm louisa bojesen. the new finance minister of south africa was appointed under controversial circumstances followingal firing of pravin gordhan. the move came amid allegations of corruption, leading to a currency selloff and moodys has placed the country's economy under review. >> it's about addressing intractable problems in the south african economy, which inclusive growth discussion in south africa i could sum it up into four principles. first structure. change the striucture of the

economy. the contribution of the industrial sector could be much more if we expanded manufacturing and stopped relying on the extraction of primary commodities and their exploitation. secondly, institutions. strengthen our state-owned companies, address the governance, the financial position as well as the developmental programs in order to invest in the infrastructure. thirdly, ownership. and by ownership we don't mean take from the ones who have to give to the ones who don't have, but create new sectors of wealth, new sectors of economy, the oceans economy, show that the agricultural sector in south africa grows, not only in terms of creating employment but grows into new areas such as agro

processing, transfer lend to those who don't have so they become farmers, that way you grow new sectors of the economy. fourthly, partnerships, which talks about partnerships between government and other social partners such as business, labor and even civil society. >> there seems to be a credibility problem with those who look at south africa at the moment and they say, well, this man is not qualified for the job, how come he's been put in this position. he must be one of president's zuma's puppets. are you zuma's puppet? >> let me be blunt. >> please. >> minister manuel what made him qualified to be finance minister in 1996? he was an engineer with two years experience in government. minister gordhan, what made him qualified? he was a pharmacist with no experience except being

commissioner of the revenue service. i hold masters degree. i've been in government for 13 years. i was minister of public enterprises for four years. i have been minister of home affair force three years. i was deputy minister for home affairs for six years. i believe i'm very qualified to hold the job. i don't think i need to be defending myself. >> back home the newspapers continue to write you're not your own man, you're the president's puppet, you are only there because you will do the president's bidding and you will and -- >> i -- >> tell me here this is not true. >> i don't want to be framed in that way. i don't want to be framed in that way. i took an oath of office to the constitution of the republic of south africa. i'm a member of the african national congress for the last 21 years now. my loyalty is to the constitution of the republic first and foremost, to the people of south africa.

secondly, to the african national congress and its constitution. and therefore i implement policies and programs as determined by those bodies, as directed to me by those bodies. i will be loyal to those institutions regardless of which individual is in office. these attempts to castigate me, frame me, paint me in a particular way are quite malicious. >> so south africa's new finance minister was appointed as said under these controversial circumstances. and that was what he had to say when talking to geoff there a while earlier. our european equity markets this morning, we were called flat to a bit higher on the open. seeing more grown out there than red. just two markets trading slightly lower. some smaller ones up north. you have the irish markets trading down. spain also just trading a couple points off. mostly just seeing a bit of delicate buying, i'd say.

to the upside, some big player the out there on the back of big deals. christian dior higher on the announcement of its deal, up by 12%. volvo up by more than 7% on the back of its numbers as well. the u.s. and how the u.s. markets are shaping up portrayed in 4 1/2 hours, that's when they open. implied open on the right-hand side of the screen, a little bit higher. gina is still with us, gina sanchez. what do you think we'll get from trump ed tomorrtomorrow? what do you think the market reaction will be to this incredible tax plan? >> i think the markets tend to be positive around any signs of tax reform of any kind. what we've heard so far is the 15% corporate tax rate. to be fair, the effective corporate tax rate in the u.s. is 21%. most people focus on the statutory 35%. i think that really only helps probably smaller companies,

smaller companies that have to pay that 35%. but most larger companies are paying a much lower statutory tax rate. i don't know that you can necessarily move the u.s. needle on just that point. we'll see what happens with personal taxes. i think the concern there is that they could be very highly regressive. if they're highly regressive they don't address the problem, which is we have low money velocity. you have to put money in the hands of people most likely to spend it. unfortunately the wealthiest are not most likely to spend it. the propensity to spend is so low there. and then his bigger problem really is whether or not he can do this without a massive deficit. that really is the issue right now. you know, we're facing a government shutdown over these issues. >> i was looking at some of the gdp figures after reagan's big tax announcements. you definitely saw big ballooning there of the deficit. >> absolutely.

>> is there any way that they can get around this? apart from just not doing it? should they -- what is the thinking in terms of what would be best for the u.s. economy? >> it is very difficult what would be best for the u.s. economy right now, if you look at where we are in the business cycle, the business cycle is starting to repair. we're seeing inflationary pressure. some of these issues could be more inflationary than the business cycle would already support. i actually think that letting the recovery take its course and supporting the real issue that we're dealing with now has been this sort of incredible inequality, wage and wealth inequality. that's what led to the social kind of feelings of unrest in the united states. if you look at what really needses to happen. that's what needs to be addressed. it's not the gop calling card. so, i think that that from a --

from a party perspective will be a challenge to really address the issues. >> if i want to buy u.s., what do i buy now? >> i think this is a small cap play. i think 15% corporate tax rate is a small cap play. because they're the ones that benefit the most from it. >> okay. gina, thank you very much. gina sanchez. we need to round off the show today. thank you for your mail, for your tweets. you can continue to find us on both of these avenues, either streetsignseurope@cnbc.com. we'll be back tomorrow and take more of your questions tomorrow or on twitter, @louisabojesen. before we go, we like some other stories out there as well. a 900-pound manatee injured in a boat strike which is not good news, but it's back home in the waters now of the florida keys. the manatee, nicknamed k3p0, it spent 8 months recovering before the dolphin research center's manatee rescue team carried him

back into the water. so there is a happy ending. we like it when they're saved and put back out where they belong. it's a big animal. have you ever seen a manatee? >> i have seen a manatee. i was kayaking. >> just by chance? >> yeah. they like to hang out by the kayaks. if they surface around you, they'll flip you over. >> i kind of like to see them, but i want to see them at a distance. just to let them be in the water. with that happy story, we leave you for now. we'll be back again with the same show tomorrow, same time, same place. i'm louisa bojesen. "worldwide exchange" is up next.

good morning. today's market test, after a stunning rally attention turns to washington and a busy earnings calendar. new this morning, with a government shutdown looming, president trump suggests he's open to waiting on funding. his u.s./mexico wall. and a showdown at the wells fargo executive meeting today. it's tuesday, april 25, 2017, "worldwide exchange" begins right now. good morning.