hello. welcome. yes, you're watching "street signs." i'm carolin roth. these are your headlines. commerzbank shares trade higher after a one-off gain sees it beat forecasts, despite concerns its radical overhaul could weigh on earnings. cnbc will speak to the cfo at 11:35 cet. the ceo of adecco tells cnbc france needs to get more competitive, as growth in southern europe helps the world's largest staffing company beat expectations on the top and bottom line. elliott advisers says it will take akzo nobel to court as

it seeks to dismiss the company's chairman after the dutch patientmaker rejects a third bid from rival ppg. a chip on the shoulder for dialogue shares as they see the apple supplier embrace investors for a second quarter dip in revenues. good morning. it is tuesday, glad you're still with us. let's check the market action this morning. yesterday was a bit of a disappointment for those bulls out there, those hoping for continuation of the macron rally. it incident quite happen yesterday. the stoxx 600 was off by 0.1%. what we saw essentially was a lot of profit taking after we had seen such a great run up in european equity markets over the last two weeks in anticipation of the macron win. let's look at the markets. the cac 40 is higher to the tune

of 0.40%. xetra dax up by 0.25%. the ftse 1 00 up by almost a third of a percent. t when it comes to the sectors, a bit of a rebound in basic resources to the tune of 1.4%. that's one sector which led us lower yesterday on the back of disappointing china data. this morning a rebound in the copper price. glenn corps core is doing well, than 3%. media and gas doing well. underperformers are autos and utilities. it is all about the earnings in europe. let's kick things off with commerzbank. shares getting a boost after a one-off gain helped it beat first quarter forecasts. the second largest lender in germany saw net profits soar 28%. the ceo cautioned the bank

needed more time before the growth could outpace the challenges of negative interest rates. annette joins us from tank fort this is one bank that can't wait for tightening by the ecb. >> yes, that's exactly the case. some analysts are saying that would -- that bank is actually a good bet on a tightening by the ecb. if interest rates are going to rise, commerzbank earnings will look most likely a little bit better than the last year's. as long as the low interest rate environment is per veiling. so l let me run you through the numbers. at first they look good, but as you look deeper, retail or private client and corporate clients, they posted a decline in operating profit in the first quarter compared to last year's first quarter. that was mainly on a muted client activity. when it comes to corporate

clients and again on the low interest rate environment when it comes to retail clients. of course they are also spending a lot of money to attract new clients in the retail banking business as who is famili those the german banking market know commerzbank is giving away money to open bank accounts with their bank in germany. so, it is a big question when that strategy is finally paying off. for now it seems like it doesn't as operating profit is still declining. of course when you look through the press release, the big burden are the low interest rates by the ecb. and then comes the exposure. commerzbank once upon a time was one of the big ship financing banks in germany as they had a huge exposure to that sector. and they're still paying off. currently the exposure is

somewhere at 5 billion euros, but the loans are actually not in a very good state. that's also weighing on earnings. all that we'll speak about with the cfo of commerzbank at 11:pa. so stay tuned for that. it's a first on on cnbc. back to you. >> annette, thank you very much. in other earnings news, dialog semiconductor warned of a seasonal sales dip in the second quarter. the chipmaker said it expects sales to drop before recovering later in the year when new smartphones hit the market. the forecast came as dialog reported a better than expected jump in operating profit growth in the first quarter. shares off by 1.5%. just recently we saw that big note coming out saying apple will cut its reliance on the likes of dialog.

munnich re reaffirmed its outlook and swung to a profit of 91 million euros compared to last year's loss. the german cfo sounded a positive tone saying pressures on reinsurance prices had eased. >> we achieved one quarter of our prognosis for the full-year. so we're on track. >> so it's going to be another net profit decline for 2017? the fifth in a row? >> yes, that is probable. our prognosis is 2 billion to 2.4 billion euros this would be a good outcome. e.on suffered a near 50% drop in net profit in the first quarter as the earnings were weighed down by currency effects and higher costs in german and

european markets. we have a lot to talk about with nick nelson from ubs who has kindly joined us around the desk. let's talk about this great earnings season we're seeing in europe. we're seeing european corporates grow earnings up 20% versus 10% in the u.s. what's this driven by? >> it's the best earnings beats we've seen for seven years. it's been a long time coming. it's driven by a few factors. we know the macro in europe is improving. we can see the economic lead indicators, they're up at seven-year highs. that's supportive. we finally got top line growth coming through which is what companies have needed. it's hard to deliver earnings growth if you don't have top line growth. top line growth is coming through. margins are expanding and we're delivering great results. >> you have to ask is the party over? have margins peaked here? >> in terms of surprises, given this is the best in seven years,

q2 may be more tricky. in our reports we've been highlights, if you look at the base effects of energy, oil was up about 60% year-on-year in q1. up about 20% in q2 if it stays where it is. that base effect is helping the integrated companies, the minors that will fade in q2. in terms of the rate of upgrades, the momentum, we may be starting to peak out, but it's just the beginning of a profit cycle. we have not had any earnings growth for six years in europe. very big contrast to the u.s. which has delivered almost six or seven years of growth. it's very early on. margins are still quite depressed. there's head room to give decent expansion of profits. >> so there's time to or plenty of room to run for this earnings season and the earnings beat. when talking to clients, i'm curious how they feel about the breadth of this european earnings rally. do they think that once again this has legs? is everyone really convinced by

this? because so many investors investing in european equities have been burned over the past couple of years. >> very true point. if you think about previous occurrences, 2012 after draghi's speech to save the euro, as it were, they had investors coming in then. investors in q1 2015 on the back of qe, and disappointments post that. there's a healthy degree of cynicism out there. people are looking at not just the forward looking numbers but the trailing numbers. the 12-month trailing numbers, not what the analysts are saying, even what the company is saying, but what they're reporting, those turn positive nearly march. that gives us confidence that cycle is coming through. yes, you will need more than one quarter. >> is there also cynicism when it comes to the earnings beat? we know some is driven by effect the and in the uk by commodities. that won't necessarily be replicated in the next couple quarters. >> it won't.

with the uk and the currency down almost 20% year on year that was one of the best beats. the uk and holland that won't repeat as you go through q2, q3, q4. we have to have cleaner quarters later this year. >> nick, what happens as the euro/dollar continues to appreciate. we've seen it cross the 110 level on sunday night, monday morning on the back of a macron win. with ecb tapering, we would have expected to gain more strength. what happens to the european corporates? >> where we are now, they can live with it in q1, we look at the trade weighted europe. it was up about 1%, 1.5%. that's not a huge head wind. modest strength from here, but not a huge amount. if we go back to the 140 we were in in 2014, it's a huge head wind. the current range companies can

survive. >> we're along way away from the 140 levels. thank you very much for that. nick nelson from ubs. still coming up, can macron secure a parliamentary majority? we look at the major challenges facing france's new president ahead of his nug grainauguratio sunday. sunday. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.

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so it's awesomely fast. no. still nope. now we're talking. so it works here and here and here. and so you can even take the occasional time out. nooooooo! yes!!! yes, indeed. speed, coverage, control. introducing xfinity xfi. find your awesome and change the way you wifi. it's the story that keeps on giving. elliott advisers launched legal action against akzo nobel after the firm rejected a third takeover proposal worth more than 26 billion euros from ppg. the two previous offers were made on the 9th and the 22nd of march. elliott is seeking to oust the chairman, antony burgmans asking for a judge to call a

shareholder meeting to discuss the matter. in a statement elliott saidburgman's decision to reject the bid was a breach of duties. adecco exceeded estimates on the top and bottom line. the staffing company saw a 6% increase in organic growth in the quarter despite an uncertain global macro environment. this as revenues in france rose 8%. speaking to cnbc earlier, the coo explained where the company was enjoying its strongest performance. >> we see that the recovery in the strong figures are coming mainly from europe and especially in european countries. italy, 26% growth in the first quarter. but also iberia, spain are continuing their growth. for sure france, 8% growth in the first quarter. we see also a continuation of the modest growth, especially as

in france we are still far away from the previous peak we had. >> sticking with france, all eyes are on emanuel macron's political party now called en marche as it prepares to unveil its 577 candidates to run in parliamentary elections next month. let's get back out to claire who joins me from paris. if i'm not mistaken he wants half of them to come from the civil sector, half should be women. that's a big ask. >> exactly. that's -- here you go for the renewal of french politics indeed, half women, half people that are non-professional politicians. when you think that only 3% of the mps are under 40 this year. so, let's hope that emanuel macron will succeed in his bet to bring complete renewal. it won't be too easy for him because he is not assured to

have the clear majority to employ his reforms. the worst case scenario is the right wing party, which did not manage to be in the second round of the presidential election, which had strong electoral basis could lead, and that would lead emanuel macron with what we call cohabitation, so a right wing majority in the parliament, and him forced to pick for his prime minister. for now, this is only a fictional politics. the elections are taking place on the 11th and the 18th of june. now, i have with me a very interesting witness, gael juval who was part of the campaign with emanuel macron from the beginning. taking care of the digital issues, but also founder of a tech conference in paris. thank you very much for being

with us. first question, about this legislative, which is the third round of the elections really, he said a half of them, the candidates, won't be professional politicians. what's the profile? entrepreneurs like you? >> probably entrepreneurs, but also some independent people from a lot of works, medicals, lawyer, and also associates. so we will add a lot of new faces, new kind of people who want to be involved in the democracy. >> are you going to be a candidate? >> no, i will not be. i am an entrepreneur, i have a lot of work, so i will not do it. >> let's hear about the reforms from emanuel macron. what, according to you, is the most important reform you are expecting from him? >> we are waiting for him to do what we propose. that's one of the most important goals, do what he proposes. one of the problems with the french democracy, people come with the program and they don't make the program, they make

another thing totally different. it will be to champion for taxes and workers, because there is a lot of flexibility to have, and an easier way to recruit and to level up the employment in france. >> he wants to bring more flexibility to the labor market and lower taxes. that's important? >> yeah, it's very important. it's one of the first things he will have to do to review for french tax law. so, he has to change everything. he proposes to make a new kind of deal with the democracy. >> do you think he will have a clear majority and the support of the people? aren't you afraid as soon as he goes with reforms he will have a lot of people on the streets? >> it's a special election, everything happens, and that has never happened before. so we hope he will have -- i'm

sure he will. because every time the french vote for a president, they reinforce the majority of the president. so he will have for sure. when you look at the final, the party were not in the final. they were all from le pen and en marche and the new deal. >> you are from the tech sector, i'm interested about your opinion. emanuel macron has always been a supporter of the french tech, can he make france's second silicon valley, which he says is his goal? >> he was the first politicians to be involved in the french tech and represent the french tech. he is a young guy, understands the challenge of the new tech and the entrepreneur. he really wants to make the tech something very important for the country. we have challenges with the brexit, to make happen something very important for investments and to divvy up the investment

system. and also the management, not only that but the result of the french tech entrepreneur. >> thank you very much, gael for being with us. gael duval, a strong macron supporter but also involved in the french tech sector. back to you. >> claire, stick around for a second. yesterday in the evening standard we saw a big piece. the front page about will macron be stealing jobs from london. i would assume he will go on a charm offensive to attract some of those jobs in banking but also in tech. >> that's interesting. i will ask gael about that. one of the headlines in the uk today was emanuel macron will probably steal jobs from the city. do you think that's one of his goals? it also involves the tech sector. >> it is very strong for the brexit, you want to have a hard issue about the brexit. so of course cities are one of the solution to divvy up the

tech solution in france, but i don't think it's the main goal. the first goal is to have a clear deal with the uk and to england. we'll quit the european. europe is the first goal of emanuel. that's how he divvies up the campaign and the objective. so i think he wants to have a fair deal with the uk and the european. >> it is true on many occasions, emanuel macron said, you know, france would be happy to welcome talents, either from finance or the tech sector after the brexit. thank you, gael. back to you. >> thank you very much for that. let's change direction. billionaire investor warren buffett says he does not buy or sell stocks based on election results telling cnbc it's a question of owning businesses. if i wanted to own farms, i would not be buying and selling them based on an election. buffett also reiterated his confidence in the stock market telling cnbc that any short-term volatilities are outweighed by

long-term gains. >> anybody that prefers bonds today to stocks is making a big mistake. i've been saying that year after year after year. now, i don't -- i won't say that under all circumstances, but it is ridiculous in my view for somebody to buy 30-year bond and some countries 50-year bonds, at these rates in preference to buying stocks. stocks will bounce around a lot more. they can go down 50%, but a 30-year bond can go down 50%, too. bonds are a terrible choice against stocks. >> buffett stressed the impact of interest rates on long-term investments. >> the most important item over time in valuation is obviously interest rates. i mean, if interest rates are destined to be at very low levels, not as low as they are now, but very low compared to

100-year averages, or 50-year averages, it makes any stream of earnings from investments worth more money. if -- the bogey is always what government bonds yield. >> cnbc also spoke to bill gates who warned stocks could be reaching a peak. >> the multiples are fairly h h high. that's because as warren says it is all benchmarked to the interest rates. interest rates go up a lot, you would expect some retreat from thee levels. >> taking a more bearish view of banking, jeffrey gundlach is betting against further gains in the stock market. gundlach told cnbc he thinks emerging markets offer more opportunity. >> it's the valuation of emerging markets is half the valuation of the s&p 500 when you look at price to sales, price to book, dr. shiller's cape ratio. i think part of that valuation

difference has been based upon, one, the dollar had been strong from 2011 until 2015. usually correlates with em under-performance. that's part of it. the rest is that i think passive investing is something -- to use a word i don't like, bubble, where people greatly overbelieve this idea passive outperforms. don't miss cnbc's interview with goldman sachs chairman lloyd blankfein today at 20:15. before we wrap things up for this side of the show, a quick look at european equity markets. seeing modest buying across the board. the xetra dax up by 0.25%. similar gains for the cac 40 trading near a nine-year high after losing roughly 1% in yesterday's trading session. so the macron rally that many expected for yesterday did not quite materialize. what we saw yesterday was by in large a lot of profit taking.

given that the markets had priced in a macron victory for the last two weeks. the ftse 100 is up by 0.25%. we are seeing a rebound in basic resources. glencore is up by more than 3%. once again, overall, we are not too far from 21-month highs for the european equity markets. check out our blog which runs throughout the european trading day. we'll be back with more "street signs" after this short break. so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪ which is why comcast business delivers consistent network performance and speed across all your locations.

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hello. welcome. yes, you're still watching "street signs." i'm carolin roth. these are your headlines. commerzbank shares trade higher after a one-off gain sees it beat forecasts, despite concerns its radical overhaul could weigh on earnings. cnbc will speak to the cfo at 11:35 cet. the ceo of adecco tells cnbc france needs to get more competitive, as growth in southern europe helps the world's largest staffing company beat expectations on the top and bottom line. elliott advisers says it will take akzo nobel to court as it seeks to dismiss the company's chairman after the dutch patientmaker rejects a third bid from rival ppg. a chip on the shoulder for

dialog shares as they see the apple supplier embrace investors for a second quarter dip in revenues. good morning. if you're just tuning in, let's show you a quick sneak preview of what u.s. futures are looking like. we're looking at a mixed picture. the s&p 500 seen off fractionally. the dow jones seen higher to the tune of 3 points. the nasdaq could fall by less than 1 point. this very much reflects what we saw going on in yesterday's trading session, stocks closing little changed and trading at a very, very narrow range. the nasdaq and the s&p saw record highs after the macron win in the french elections. again, not much happening. also the vix, it fell below 10 hitting a decade low. that seemed to be getting a lot of attention in the trading session as well. when it comes to the trade here in europe, we are seeing some modest buying actually. the ftse 100 being supported by

the basic resources sector, bouncing back nicely from yesterday's weakness. the ftse 100 up by a third of a percent. the cac 40 recovering from yesterday's almost 1 % loss. trading closer to the nine-year highs once again at 5,404 points. up by 0.4%. maybe it's the late macron rally we're seeing on tuesday rather than yesterday which was characterized by profit taking. the dax up by 0.3%. i also wanted to tell you what is going on with the fx markets. we're seeing profit taking in the you'euro/dollar pair. now off by 0.1% on the day. 1.0912. the focus increasingly on ecb tapering, and that should support the euro/dollar going forward. also want to tell you that -- you're seeing the you're r euron

the screen. that's trading higher. another high ranking justice department official, sally yates, said she warned the trump administration that former national security adviser michael flynn might be at risk of blackmail by russia. peter alexander has the details. >> reporter: tonight, nbc news has learned that president obama delivered the personal warning to president-elect trump before hiring michael flynn, just minutes before this giant oval office appearance and less than 48 hours after the election. >> we now are going to want to do everything we can to help you succeed. >> reporter: at the time flynn was already a key adviser to mr. trump. and the obama administration had fired him from his post as head of the defense intelligence agency in 2014. today, the white house suggesting that back story prompted president obama's

advice, which mr. trump essentially dismissed. >> it's true that the president made it -- president obama made it known that he wasn't exactly a fan of general flynn's. which is frankly -- shouldn't come as a surprise. >> reporter: but president obama's unusual move was at least one of two warnings the white house received about flynn, the incoming national security adviser. the other from former acting attorney general sally yates, an obama administration holdover. today revealing what she told the white house for the first time publicly. and putting a spotlight again on the trump team connections to russia. >> to state the obvious, you don't want your national security adviser compromised with the russians. >> reporter: yates said she warned the white house counsel that flynn had misled pence and other officials and that the russians knew. >> that created a compromise situation. a situation where the national security adviser essentially could be blackmailed by the russians. >> reporter: yates says she gave the information to the white house so they could take action. but she was fired by president trump days later for refusing to enforce his controversial travel ban.

flynn kept his job for nearly three more weeks. this morning, president trump defending his decision to hire flynn by blaming the obama administration saying they gave flynn the highest security clearance. even after his firing flynn did retain his clearance, standard procedure. it was renewed in 2016. multiple u.s. officials with direct knowledge tell nbc news that at the time, flynn never revealed he had taken near $34,000 from russian state media to speak at a dinner in moscow that may have kept him from getting that clearance. and he was never granted the additional security clearance he would need to be national security adviser. >> millions of people have a security clearance. it's like having a pilot's license. that doesn't mean you can fly air force one. that you have the credentials, experience, and have been vetted to take on the most sensitive job in the world. we heard from warren buffett this morning. here's more. he said he missed buying amazon

and google stock when prices were lower. he said when he decided to make a move into tech it was much easier to talk himself into apple. >> the shares when we bought them were much more reasonable in relation to current earnings. apple didn't have to do better in the future than they were doing at the current time. when you get into a google or amazon, you're paying for the future more. but they may well have a better future, that may be more than justified. bill gates says new tax cuts in the u.s. may not provide much benefit for the tech sector. speaking to cnbc, gates reiterated confidence in the strength of the sector under the current tax structure. >> i don't think that the success of the technology sector will be improved by some tax change. the tech companies are not starving now. this only comes up when you have profits. these companies have very high

profits. it's not like we're going to be stronger in the tech sector by making owners of those stocks richer. >> all right. the sohn conference attracts some of the biggest names in investing every year. >> it's been quite an eventful day here at the sohn investment conference where we heard from some of the biggest names and brightest investors provide their picks and projections for how they see the market going. some more interesting picks including an urging of investors to buy convertible bonds in tesla for the ones in 2022. another interesting pick is from david einhorn urging a short in corps laboratories. this is an energy play.

einhorn coined the term mother fraccers a couple years ago. it's clear he's bearish on the energy sector and in these areas in general. lastly we heard from jeff gundlach just a few minutes ago where he talked about broader macro plays. he's looking at some correlations between active returns versus emerging market returns. he sees significant correlation between those two. he predicts that active returns will improve and therefore is urging investors to take a long position in eem etf while shorting the s&p 500 and leveraging that one time. for cnbc business news, i'm leslie picker. let's turn our attention to asia. sony shares have hit their highest in eight years as they rebound into the television market. >> sony stocks finished up nearly 1% today reaching the highest since september of 2008.

it jumped 4% the day before lifting the market value to over 5 trillion yen. that is a level it had not reached since june of 2008, leaping far ahead of rivals like panasonic and mitsubishi electric. the firm announced on monday it will reenter the organic light emitting display or oled television market. the technology is allowing clearer pick chorpictures and doubles as a speaker. sony decided to use oled panels made by lg electronics, and it says it will focus on developing image production technology to set itself apart. the bravia a1 series which will go on sale in june will cost around $7,000 for the 65-inch model. the group's tv business is already rebounding on the success of 4k liquid crystal display sets and the latest news

make investors optimistic that sony will capture 10% of global market share. sony announced last month that earnings are expected to increase over three fold in the current fiscal year and demand for image sensors used for smartphones are strong and operating profits are expected to rise over 70% to 4$4.4 billion. that's a level reached only once in the past. that's all from the nikkei. back to you. >> thank you very much for that. let's get back to european earnings. continental slightly raise the its full-year sales guidance. the german auto parts and tiemaker said they expect business to stay strong in the second quarter and group sales could reach 43.5 billion euros this year. we're joined by the cfo of continental. he joins us from hanover. thank you very much for taking the time to speak to us once again. what made you so optimistic that you were able to raise the guidance?

>> hello. the first quarter was strong. we had a nice tailwind from the world cup production, which was up by 5%. we do see that the car production in the second quarter of this year will be strong as well. on this background of this growth, we managed to growth more than 12% in the first three months of this year. so very good story based on our strengths in electronics, in automation of the car, the connectivity of the car, all this helps us as well in the second quarter. thatimistic for the whole year. >> what we're seeing in the u.s. is that april auto sales have dropped by more than 4%. do you feel that strength there is just coming off the boil? maybe because of doubts over the trump reflation trade? >> we clearly see it already in the first quarter growth worldwide, i mentioned 5% u.s. only 2%.

and we do expect for the total year reduction in the car production in the u.s. of about 1% to 2%. some reasons are just it was last year a strong tail wind, low interest rates, gasoline prices, very low. and this tailwind is not continuing further down in 2017. and already this is a little bit of an impediment for further growth. how far new administration -- legislation of the new administration is playing a role. it's, i think this is hard to evaluate. >> yet it may have a significant impact on your business, that is if the border adjustment tax comes into effect. it's been a lot quieter when it comes to that specific tax over the last couple weeks or so. have you now removed that from your forecast? is it still coming or no? >> this is very hard to predict. our information, what we get from the u.s., from our colleagues in the u.s., from

officials in the states is that clearly the probability of a border adjustment tax seems to be lower. to my knowledge it's not included in the actual discussion about these tax topics, which originally we have thought. nevertheless, we have done scenarios of what an impact of these border adjustment tax to continental will be. >> let me ask you about europe. there seems to be plenty of optimism around europe, especially after the macron win. how optimistic are you about the region you're operating in given that business sentiment is at six-year highs and investor confidence at ten-year highs. is that being translated into sales? first quarter clearly translated into sales. first quarter we had some working days more than last year. this will be compensated with a second quarter. but overall we see southern europe, cars are really getting

old. they have to be renewed. we see nice demand there. germany is strong. the uk was quite strong in the beginning of this year. overall, yes, we are optimistic. we believe that europe as well as including the effect of the election in france can have a good year. >> so the environment is positive. you're sitting on roughly 6 billion euros in liquidity reserves in 2016. you've been paying out a higher dividend, but what about m&a? given that, yes, valuations are rising, but they don't seem to be sky high yet, would you be open to that? >> well, clear we are open to that. we just closed the last year beginning of march, seat covers and other covers in the rubber area. we have done some other m&a in '16 and in '15. yes, we are open, when something helps us to further grow, strengthens technology, to be

better placed in the asian region, we are open for that. we have a closed look at that. >> what about not just the region, you mentioned asia as a potential area where you may want to expand in, about what about electronics and you a and autonomous. >> if it is helping us in technology, it's specifically in those areas. woe are already very strong, we have the advanced driver assistance functions in the car. continental is a big player worldwide. this is true for kekticonnectivf the car, digitalization of the car and electrifycation of the car. we have a strong position. if there is technology, we are open to add this to our portfolio and know how. >> wolfgang, thank you very much for that. appreciate your time.

still to come, the tides could be changing in south korea as voters are expected to elect mr. moon as the country's new president. we're live in seoul with all you need to know about the country's presidential election. tion.

welcome back. south koreans are heading to the polls to pick their next president after the impeachment of former leader geun-hye park. chery kang is live from seoul. i wonder to what extent recent inflammatory comments from u.s. president donald trump will play into this. >> i think it's been playing a big part. and i think that's ang interesting factor that a lot of south koreans didn't expect to happen in the middle of this snap election campaign period.

i think with the trump comments, i think the liberal democratic parties, jae-in moon, the front-runner actually who has been enjoying 40% or close to 40% approval ratings has been enjoying the comments, because especially when u.s. president donald trump has been making comments such as south korea needs to foot the bill for themm in south korea. i think it upset a lot of liberal voters out there who didn't even like the thaad anthony missile systan antofagasanti anti-missile system to begin with. that could have given more support to the liberal candidate, moochb jn jae-in.

as of an hour ago, voter turnout is at 70%. we are well underway to reach the record level of voter turnout of close to 80%. and regions that are traditionally liberal have been showing high voter turnout. that could also be a good thing moving forward for moon j arcae. a digital innovation plan for cruises. we have the executive director of msc cruises. we know about smart cities, smart homes, now smart ships. what can we expect here? >> good morning. well, the experience of our passenger wants to be more

entertaining all the time. in these mega ships, there's the question of service. not only you want to find out where your children are all the time on the ship, but you want as well to give personalized service. to go to the reception, to be recognized and called by your sirna name is part of the experience. to book, we have many public spaces, many restaurants, many features on these new mega ships. to actually be able to get yourself around in advance, have your drink ready before a show is part of cruising. it's part of the new cruising. >> especially on a ship where there are thousands of people, and sometimes you feel personal service is not the standard. i've been on one of those ships, sometimes it can seem harrowing. this investment into smart ships, that's 9 billion euros. that's a huge number. even for a company like yours. it's the industry's largest investment, the most extensive investment.

again, do you think that will pay off? is it worth it? >> well, we see -- first, we must look at the numbers. cruising today as we understand it is only 25 million passengers around the world. we are 4 billion that can afford to go on vacation. so cruising, as we understand it today with the new ships that have so many features, not only do you travel and wake up every day in a new country, you have safety and security, but you can only enjoy the differentiation to other type of holidaymakie . so we think the penetration in europe is still very little. we're talking 2%. last year the whole cruise industry was 6.5 million passengers. i think there's a great future. people are starting to understand the value for the money, the luxury, the democratization of luxury by going on a cruise.

so we have a long vision that there are only a few yards in europe that can build such complex ships. there are lots available. is guarantees growth and market share in years to come. as msc, we saw the opportunity, we bought the ships, 11 ships to be exact for 9 billion in the next years to come. a vision for a long-term industrial plan, which is certainly needed also for the economy for europe. >> what region is the strongest now? are you seeing a pick up in growth in europe? >> europe is growing. uk we seexceeded 2 million. germany 2 million. italy is coming up stronger, 1 million. france is picking up. they learn the value for money for cruising. spain as well. overall we have seen huge growth. it's becoming a global business. like i said, it's an alternative

to any vacation. the biggest publicity is word of mouth. people coming back can say what a great experience what a great cruise that was. >> one of the biggest impediments to the cruise business is closed borders. under president trump we're potentially looking at that. how big of a problem has that been and will it be going forward? >> we distribute as msc basically globally. we have offices in 48 countries. we see people love to come to europe. they have issues with visas as well. there are issues with freedom of traveling already in the global world. but people find the comfort, the security, the exploration, visiting new continents by cruising. we think that america, to be exact, whatever trump is trying to achieve will not really affect cruising per se. we have a lot of europeans going to the caribbean, sailing in

wintertime and summertime. so in europe and brussels we talk to the politicians there to let them know the economy also depends on tourists from the new emerging countries. so i'm sure that this in the long run will be idea. at msc cruises we hosted 93 nationals last year. th nationalities last year. >> we have to leave it for here. thank you very much for coming in. makes me want to go on a cruise right now, not specifically with your company, but any company. executive chairman of msc cruises. tune in at 11:35 for an interview with the cfo of commerzba commerzbank. commerzbank.

good morning. rally on. the nasdaq and s&p eke out records as the fear index falls to the lowest levels since the '90s. >> happening now, south korea heads to the polls to choose a new president following that massive corruption scandal. and pain for hertz. we'll tell you why shares of the car rental firm are taking a hit this morning. it's tuesday may 9, 2017. "worldwide exchange" begins right now. ♪ good morning. welcome to "worldwide exchange" on cnbc.