hello and welcome to street science. these are your headlines. a disappointing drug trial sent them lower after a combination of key breast cancer medicine only has modest benefits for patients. burbury falls out of fashion as they are reduced one month after the new ceo takes charge. apple tries to take a bite out of amazon while alphabet tops

the $1,000 share mark for the first time. sterling finding support as politicians with teresa may pledging more armed police on the wake of the attacks they corbin calls for her resignation over the previous police cuts. >> good morning, everyone. most of you have already been out this morning. the fste 100 off by a quarter of 1%. falling back from recent record highs. it was closed for a long holiday. it is down by 0.4% and we're seeing similar declines as well. we have a couple of big stock stories moving us lower today. burbury down. they talk about a lack of top

line visibility but i'll also talk about the sectors here and health area is underperforming. the worst performing sector this morning, 0.9% and here's why. shares in the swiss pharmaceutical trading sharply lower following an 8% fall in the u.s. listing overnight. this after the disappointing outcome of a major drug trial. data showed used in combination with it's original medicine offered only very modest benefits for patience and shares down by as much as 5% this morni morning. john thank you for joining us this morning to talk about the story. it's expected to be the new blockbuster drug. >> it's a set back for roche. i wouldn't say it's a disaster.

but triels and risks are what it's about these days in the pharmaceutical industry. they were trying to leave the two drugs already to make it better and you sometimes get this better than the beatles problem. 94.2%. 93%, you're talking art margins of improvement here and they had a go of it and it's not quite as good as they expected. >> what does that mean for the standard treatment or do you think doctors will accept this? there's two major competitors for this. two drugs together will cost $140,000 a year. that's a really, really big number and second of all many of the patients treated with the data suffered from severe diarrhea. >> all drugs have some side effects and it's no acceptiexceo that. the problem is pricing this combination because as you point

out the two drugs together would be $140,000 or so in the u.s. and a very complex system in the doctors and payers and insurance companies and so on that's going to determine how it pans out in the future. you have guidelines. all of these things will factor through. we shall see in the months to come. there's one other factor here that's very important and that's similar and this is a new phenomenon really for the industry. they're not exactly the same but they're similar. you have to factor in some positions. i think that factor as well is going to make it more complex.

peak sales were expected to be 3 billion by 2021. do you think that number will come down? are we looking at something like or 2.5 billion. >> exactly. it's a successful drug by any standard. the analysts have released that forecast. that's how it's down essentially and whether it's data or both of them that whole franchise that i gather is about 9 billion or so somehow that's coming down. it's roughly one years worth of sales there and that shows that the community is dealing with a combination of the data is not quite as good. >> what do you think the next big catalyst will be?

we saw the affinity study, we saw other studies that had quite a negative read when it came to blaerd canc bladder cancer. what were other catalysts that could relieve this disappointment. >> it hasn't joined in with this massive m&a going on. it has been aflikting some of the other. it's been steady and long-term. you have to remember that it was originally a clinical trial in 1992. that's 25 years ago. roche made the investment. very simple and very clever to do this investment and essentially they, there aren't any major catalysts coming up. they're going to keep going and a very strong pipeline and i think it's a strong start.

>> i think last time i talked about potential take over targets he'll always talk about how overvalued the market is and that's why they didn't go for it. what's your favorite pick in the sector? is it roche? >> when you look at the big pharma sector i favor the europeans over the u. s. big pharma. the u.s. are more afflicted with the m&a itch. jsk in a different way from a point of view from mixing. i think the european stocks are ones to watch. >> john. thank you so much. john roundtree. and two of the three attackers from saturday's terrorist attack on london bridge have been identified. the new questions have emerged about the authorities failure to stop them. nbc's richard engle has the

latest. >> police have now identified two of the attackers that terrorized london. the east london resident described as month roroccan and. and butt, born in afghanistan. a third has still not been named. could it have all been prevented? british authorities missed warning signs. he already was well-known. even featured in a documentary about islamic extremists. he was part of a group of isis supporters closely monitored by police and at his mosque a worshipper told us he was considered too extreme. >> why. >> because he suspect. >> to be extreme? >> to be extreme. >> tonight british police were on the offensive. >> we do have literally thousands, in fact tens of thousands of people who we would regard as subjects of interest.

>> london anesthesia mayor directed his outrage. >> it's proverse and poisonous and there's no place in islam. >> now there are vigils for the victims and promises to do more after critics say security forces did far too little. british police said butt was known to them and british intelligence but there was no indication he was planning any violence. nbc news london. >> policing and security remain at the forefront yesterday. both headed north on the latest leg of their country wide tours. the prime minister attempted to defend her security records and labor leaders said she should re-sign. teresa may is desperately trying to put the main focus back on

brexit. he's not able to do that. >> you're right. jeremy corbin has been going after her trying to pin her down over her record as home secretary. that's the top security official here in the u.k. she held that for six years until she was appointed prime minister and over that time she resided over 20,000 job cuts. that's something that labor say has been a mistake. that's something they say is in part responsible for the inability of authorities to try to identify these attackers in advance saturday night's attack in london bridge. we have come mens this morning from the current and former mayor of london. he was talking to bbc and defending teresa may's record and also his own record when he was responsible for it. he said numbers stayed high during his 8 years in office however his successor, the current london mayor he is really concerned he says about cuts in the future.

we have been talking about past cuts. he is concerned about jobs in the future among the metropolitan police force being cut. as many as 12,800 officers a year could be taken off the street. that's 400 million pounds in saving they trying to make from the policing budge. that's not something he is going to find acceptable. >> correct me if i'm wrong but i don't think we had any update on the recent race between jeremy corbin and teresa may since the atroes attacks on saturday. do you think we'll see that terrorism has effected the polls in anyway, shape, or form? >> you're right so over the course of the weekend we have a couple of polls out that showed respectively that 3 or 4 points versus a 1 point difference between the conservatives and labor. it could have some indication for voter intention.

the key thing going into thursday's vote is going to be intention of young people. that demographic from 18 to 25 and from some extent the 25 to 34-year-olds in the u.k. if they turn out to vote in force they're more likely to vote for labor than the conservatives. that's something teresa may could be concerned about. she wanted to shift the spotlight away from security and her own record back toward brexit where she says, do you remember that comment about being naked and alone in the they fwoesh ynene they -- negotiating room with brussels. that's what she wants to focus on. >> let's continue this discussion with the global market strategist at jp morgan asset management. i want to talk to you about what the election means for your clients. money and you put out a note. i find that quite fitting. let's talk about the scenarios. a small conservative majority.

what does that mean for markets? >> it's being priced at the moment. you wouldn't see much movement. any outcome is through what it means for brexit and what that means for sterling. so that would put the markets where they are if you saw a small conservative majority. >> what would that mean for the currency though? would the currency go down? >> i think the way to think about the currency is if you knew exactly what was going to happen and then you knew what was going to happen to the pound as a result if you think the pound is going to go weaker on the assumption that you're going to get a hard becomes rexit and by march 2019 perhaps with no deal at all then in that scenario you could see it do well because we've seen this where 70% of the revenue comes from outside of the u.k.

you also see certainly over the last months, that weaker sterling environment and sterling rallies let's say you have a scenario where they're in coalition for the labor government then you could see them under perform. >> i want to come back to the scenario of no deal. i can't quite wrap my head around. if we get no deal and the u.k. crashes out of the euro zone or the eu we could still see equities rally. wouldn't they fall in with the pound? >> no think so. i think what you'll see is a very sharp fall in sterling. you get a relatively hard

brexit. so i give them time to negotiate and then you get a free trade deal on goods and not on services and that takes place in 2021 and 2022. if that happened, sterling will fall really quite sharply. revenues are available. >> what happens to the different causes if corbin wins majority? in that case we're going to see higher taxes. it has to be bad for equity markets. >> if you see a majority of the labor market that's pretty unlikely at the moment but were it to happen i think the key indication is clearly the common bond yield should go higher. the market is going to react to the pattern of behind and pretty sceptical about the intention to raise as much as they'll be able

to on the sun hand markets would be thinking perhaps the labor party are less controlling immigration and therefore you might see a softer brexit maintaining that and on the other hand the cooperation pacts see the less business friendly government so you could see stocks and it's very hard even if you knew for sure that that was going to be the outcome. as much as we saw in the u.s. election. even if you can predict the result there's no way to predict what that meant for the pound. >> usually we talk about the pound and the inverse relationship with the equity markets but, you know, we really failed to talk about what this would do to bond markets. would there be any impact? >> yeah. what we have seen is that majority scenario, just trade between u.s. ten year yields and european yields and since the election was announced spread

between u.s. government bonds and u.k. government bonds. it's not really u.k. related. if however you saw the government was going to come spend a lot more that would start to move higher. >> mike, thank you for that. you're going to stick around for another chat. not just the u.s. elections this thursday but also the ecb meeting. do send in your questions to mike bell the e-mail is street signs europe@cnbc.com and tweet me at carolyn cnbc. we'll be back in 2.

hsbc has cut the burberry stock rating citing lack of top line visibility. it comes amid a challenging time looking for a fallen four year profit and is waiting for the revival. and the managing director of the international monetary fund says current organization is willing to go up to the next round of the bailout. she said the imf is prepared to give creditors more time to agree on debt relief measures. it will improve the payment of the bailout. the ecb's latest monetary policy decision due on thursday. the european central bank is expected to acknowledge the improving european growth

outlook but it's not on interest rates. is this when it needs to be a little bit more hawkish? >> hawkish is maybe a little but much but i think less dovish. they remove their bias and balanced in the outlook and remove the language specifically. clearly survey data and pmi data and quite meaningly to the upside and not the down side but they'll be more balanced in the outlook and that will pave the way to the for them to by the end of the year announce it. >> it had a lot of people scratching their heads last monday when you saw mr. draghi being very dovish. an amount of support is still made for the eurozone.

i don't see how he is going to make this turn from last week to this week. >> i think what we want to do is kwau quash it. there's a lot of talk about interest rates going up and draghi wants to make it clear that they're going to take the ue and put rates up only after that. i don't think they will reduce their eq program even if inflation remains below target. right now when you're given unthe employment. >> is euro dollar chart we are currently trending at the 11247. that in itself is a lot of tightening for the euro zone and that's down to a couple of factors. better than expected growth outlook and some of the weaker stocks coming out of the u.s. do you think terks cb will try to top down currency?

>> it's a slightly stronger euro. it may still go higher against the dollar. it's narrow in the growth gap. you had the u.s. performing really very strongly in europe and now you see european growth catching up to the u.s. and that's starting to be reflected. of itself it won't be enough to derail it. >> politically is there anything that keeps you up at night in europe anymore? because it might have the sizable majority going. italy yes, might be holding early elections but i know you don't think italy will ever leave the euro zone. if there anything that you're worried about? >> the risk in europe is lower than this time last year and particularly investors are still holding much less than they were at the beginning of 2016.

so people haven't reflected the fact that we have macron rather than le pen in france. the elections went the way they would have liked. in what's the big risk? the risk is italy still but when you look at it it looks like the most likely outcome is a messy election where no party gains a majority and that means that okay you won't get a government strong enough to push through the reforms but also there won't be anyone in power to call the referendum. that's what markets really care about so as long as that doesn't happen. >> mike, thank you so much. global market strategist at jp morgan asset management. we're going to go for a quick

break but do check out world market's blog that runs throughout the european trading day. we'll approximate back with plenty more coverage in two minutes.

held rowand welcome back to street signs. here are your headlines. a disappointing drug trial sent roche lower after a combination

of its key breast cancer medicine only has modest benefits for patients. burrberry falls out of fashion with hsbc downgrading the luxury fashion house one month before the new ceo takes charge. a aaa day. apple tries to take a bite ou of amazon while alphabet tops the $1,000 a share mark for the first time. sterling finds some support as politicians return to campaigning with teresa may pledging more armed police in the wake of the attacks. >> good morning, if you're just tuning in let's show you what your futures are up to at this point. the s&p 500 seen by 2.5 points. nasdaq slightly off by 1.5 points so this is after u.s. markets were back yesterday.

dow off by 0.4% and the s&p off by a similar percentage. the trading ranges that we have seen across europe but also across the u.s. have been narrow. when it comes to european trading we're slightly under war. falling back further from the recent record highs as well. given the downgrade coming through from hsbc citing lack of top line visibility. not many other markets closed yesterday so this is the trading day after a long holiday. i want to show you what is happening with the fx markets and we're seeing them come under a little pit of pressure. we are back below the 110 handle but keep in mind, sterling has seen quite a mini rally. on the one hand it was down to

dollar weakness but on the other hand it's also down tie couple of polls such as the icm poll giving the conservatives a commanding lead over labor ahead of thursday's general election and that held the currency higher too. these polls have been all over the place. we'll have to wait to see what the final count will be. let's get out to jemma. can you tell us about what they're expecting? >> yes. they're looking for the manifestos from the conservative and labor party. it's much more of a conventionist approach. i'm joined this morning by the chairman of open bridges. talk more about the election and brexit itself. let's start by looking at brexit. you were a part of the stronger end campaign. it seems now we are hoping

toward prexit. what's the best case scenario for business and britain in general? >> not to take the best deal off the table which is membership of the single market, continuation of the union which is what actu actually they're doing and stay in that because that keeps us economically secure and from that position to get the other for security and environment. unfortunately they have taken that off so if we get the conservatives winning we're likely to come after that almost certainly and then the best case is some sort of free trade agreement but i am concerned that the prime minister sort of identified the european union as the enemy and they'll see her as the enemy. during a political campaign but boy did it change immediately

after the election and then i think we're all better off and the likelihood is we probably will stay in the customs union and there will be a small chance that as those negotiations carry on we might end up ensuring that we stay most of the aspects of the european union. >> if you look at recent polls it's strongly felt that teresa may when it does come to brexit negotiations. why do you think the public has got this wrong? >> she has defined herself by saying this is the brexit election and yet not told us almost anything about how the negotiations are going to take place and i think people have seen that as a problem. i think because she said she is committed to it and because she has come up with this unfortunate mantra about no deal

is better than a bad deal which is clearly wrong because no deal means falling back on the wto which means increased tariffs on all types and that will be really bad and has focused people's minds that she is somehow the leader that i think there are other platforms that have been much better for us in terms of our economic wellbeing. >> it's your perception that labor would have a more open approach. >> yes. i'm very critical of jeremy corbin for having facilitated brexit and having such a lackluster campaign during our referendum. he should have waited until after french and german elections but that said i think he could lead the negotiations and handle them and i think be

free of any real ideology and i would almost certainly expect us to stay in the market. >> let's look at some election issues. now jeremy corbin has taken the party further left do you think this is a move in the right direction? >> no, i don't. you'll see really high profile examples sending letters to well-known media organizations warning about antibusiness policy. now jeredny corbin as you rightly say and the increases in corporation tax and personal tax you could argue this is one of the most left wing stance that the labor party has taken. certainly in some ways more so than 1983. but equally it's not the

business on the conservative side. they're talking about questioning companies with buy backs and take overs and understand what it is and yiwhy it's needed. there isn't a strong business mantra of policy. you have this odd situation that he's sitting this one out and i've never seen anything quite like it. that should be something that's carried out? >> well, i think, let's face it. there's not much there that actually says it, any real significance. this particular issue on business is difficult to get back from so there is some

concern that there's an antibusiness stance. very pro business himself personally so you'd hope that some of the personalities would rise above some of the actual commitments and you could hope that some of the politics because we have to remember that business does, you have to remember that london is responsible for the wellbeing in many parts of britain. >> what's your take on what the polls are telling us recently? they have shown extreme tightening. >> i think the prime minister has been some what diminished by this campaign, no question about that. jeremy corbin had very low expectations. he has managed to surpass those. i still think the conservatives will win and i think they'll win with a clear majority but it's

certainly people speck culating >> thank you for your time today. carolyn back to you in the studio. >> thank you. a couple of points. i want to pick you were on a few of those. just a few things here. he says it's not very business friendly. what would you say to that? >> they bring in a lot over the course of the coalition government certainly. they decided that they were going to implemented a national living wage taking it away from the low pay commission in making sure that any increase to the minimum wage was a safe one has points higher l politicized it. she is look to bring in pay ratios and publish gender pay

gaps. she's coming from the interventionist community that's for sure. >> what about corbin on the other hand? he's gone more left than a lot of people expected. do you think this will hurt him? judging by the polls people seem to like it. especially the younger people. >> so when you look at labor policies, individually like nationalizing the railways you tend to find a lot of support but labor habit done well for over a year now especially with corbin at the helm. they don't think that labor can go without the economy or immigration which are the top issues with british people at the moment. so you see some excitement but that overall picture. >> was economics or business a major factor? to me it doesn't seem like it. to me it wasn't brexit either. it seems to me that's down personalities in the lack of authenticity and then a u-turn

on the attacks. would you agree with that? >> the country on the whole, the parties are different from the leaders. conservative party thinks it's the best to handle the negotiations butter ree is a may was not that strong of a leader. you see a real weakness in her in particular and corbin performed better than expected. he could only go higher and she could only go lower but it's been so dramatic. that's partially down to leaders and attend of the day would the labor party only get around 20% of the vote? no. so the tightening i think is natural and normal but we still see 1% to 14%. i think it's likely to be on the higher side. maybe not 14%.

>> do you think she'll get the 50 seats? >> the way the referendum vote fell and the way they're looking toward the conservatives it's very possible that the vote is going to be equally distributed which could be great for teresa may and she could get that majority. >> kate andrews, news editor for the institute of economic affairs. london's mayor voiced his opposition to president trump making a state visit to the u.k. he has spoken out against the planned trip falling a high profile stop between himself and the american president. he took to twitter to criticize the terror attack. and state visit invitation to president trump has been issued and accepted and that he sees no reason to resend it. asked about the president's tweets criticizing khan in the

aftermath of the terrorist attack. johnson defended khan saying america was right to reassure them of the presence of armed police on the streets. >> steven hawking has thrown his weight behind the labor party. he says the conservatives would be a disaster for public services. still coming up on the show, qatar in crisis. the chaos across the gulf. we'll be back in two.

oil prices are still under pressure as the day after several powers including saudi arabia, the uae and egypt cut

diplomatic ties with qatar, meantime they recovering after january 2016 flat in current trade. qatar's foreign minister said the country is ready for mediation efforts. he postponed an address in order to give them a chance to intervene as a result of the growing conflict. let's get to hadley covering the story for us. now involved in an effort by the turkish president. >> absolutely. you have to remember there's a relationship there as well it's an interconnected web. it really hurts qatar more than the other countries and also means something geopolitically. we already heard from the u.s. government.

they were offering yesterday rex tillerson, secretary of state to be a mediator here. the gulf countries themselves, saudi arabia, egypt especially, as well i should say, basically feeling the need to go this far at all when it comes to taking on qatar and what they see is qatar support for terrorism and increasing support outside of what they would have advocated so sergely some movement there and it has to be remembered that this has major implications down the line. private sector in the region and economies in general. >> thank you for that. moving on, the u.s. justice department charged an intelligence contractor for leaking a classified document about russian election interference to national security news outlet the intercept. the nsa document described sign area tax on the voter registration related software company and local election officials by russia's military challenges. the justice department said it

is under the espionage act. president trump claimed his own justice department claiming it is diluting his executive order. he doubled down saying that's right we need a travel ban for certain dangerous countries not some politically correct term that won't help us protect our people. hallie jackson has more on this story. >> tonight, new questions about whether the president's own words could come back to haunt him as he talks travel ban now in the hands of the supreme court describing the current version as watered down and politically correct and yes, the president is reiterating it is a travel ban. >> i don't think the president care what is you call it. >> his administration used to. >> it's not a travel ban.

>> it's not a travel ban. >> this is not a travel ban. this is a temporary pause. >> when we use words like travel ban that misrepresents what it is. >> why does it matter? because the president's words can and probably will be used against him in a court of law. other judges in decisions to block the ban already pointing to the rhetoric on the campaign trial. even supporters like george conway, husband of kellyanne argue these tweets on legal issues undercut the president. >> it makes their legal position harder but undermines their credibility as well. >> does the president support his own travel ban as is? >> president trump's latest travel ban talk comes in response to the terror attack in london. part of a series of statements in which he also slamd london's major for this. >> londoners will see a increased police presence today and the next few days. no reason to be alarmed. >> the president appearing to

take that phrase out of context saying at least 7 dead and 48 wounded in terror attack and the mayor of london sees no reason to be alarmed. >> the point is there is a reason to be alarmd. we have constant attacks going on. >> the mayor sun phased. >> i don't have time to respond to foreign tweets from the president of the united states of america. >> all right. despite fear of rising protectionism under the trump administration global trade is expected to grow at the fastest pace since 2014. that's according to world bank forecasts. following two years of slowing growth sees trade bonds rising at 4% this year. we're now joined by the executive director at the international trade center. thank you for coming in even though you had some trouble with landing at city airport. very windy and rainy this morning but let's talk about the

pessimism we saw right after the election around trump. everyone was saying global trade was going to collapse because of the protections and efforts. where was he pessimistic? >> i think it would be trade there's been too much volatility which has created it. there's been a lot of talk a lot of bark less bite although we have to be vigilant. the potential that trade can offer us to generate growth. to generate jobs. to reduce poverty which is what also we have to think about but that's a potential. so vigilance is what we need today and protectionism is going

to help us address the challenges. >> of course there's still a lot of uncertainly as to what will come out of the trump administration. we can't second guess because it seems to be so volatile in terms of some of the statements. why do you think that fundamentally global trade is so resilient. is it down to europe? is it down to asia? what's the underpinning factor? >> the economic reality fragmentation across the globe which is working and which is generating economies which is helping productive. that's the underpinning reality but this is confronted today with a political that is where the two collide that can be dangerous. it's also branded them and should not overlook. not everybody is benefitting from the growth in our economies.

not everybody is benefitting from technological progress. not everybody is benefitting from globalization. not everybody is benefitting from trade. we have to make sure that while we grow, trade moves fofr ward, we also make sure that the benefits of the growth. >> you're talking about includes the growth. how do we make sure that this happens? it seems like a great idea but how easy or how difficult is it to put this in practice? >> it's difficult. the easy way is you're ready to take measures. easy way is to say i'm going to pull out of an international agreement that's going to make my industry more competitive. >> it will be more competitive just by pulling up and what is important is this is basically because renewables today are basically telling us move out of coal but the answer we have to give is what do we do with the people that are in economic

activities that are suffering from globalization? that's where education, health care, social safety nets infrastructure are becoming more and more important. that's where the future of our acceptance of globalization is. >> before we wrap this up, i have to ask you about the standing of the u.k. after brexit. we're two days away from the crucial election that could determine the course of brexit. how much worse off will the u.k. be? >> depends on the relationship with the rest of the european union. >> that very much depends on the eu or the person -- >> what is very porn is to -- you have to sit down and negotiate with your main partner and that's europe.

anyways, thank you so much for that. from the international trade center. i appreciate you coming in to talk to us today. before we wrap this show up as well let's show you what futures are up to. s&p 500 by 2.5 points. dow jones falls by 15. the nasdaq is now opening to the tune of 2 points. that's it for today's show. thank you for being with us. worldwide exchange is up next. we'll see you at the same time and place tomorrow. bye bye. busch. as crisp and cold as a mountain stream. it has the same great taste it's always had. even the same sound. [sfx: buschhhhh]

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your trading day set up just ahead. >> the president will meet with a congressional leader in an effort to start his legislative agenda. >> plus a big shake up in retail. j. crew's long time leader steps aside. tuesday june 6th, 2017. worldwide exchange begins right now.