welcome to "street signs. i'm carolin roth these are your headlines european equities follow asia and wall street higher as north korea says it will wait and see before making a decision on firing missiles towards guam. america's c-suite reacts to charlottesville. the ceo of intel becomes the third executive to leave president trump's manufacturing council after the bosses of merck and under armour head for the door danone shares rise to the top of the stoxx 600 amid reports of activist hedge fund

corvex management having a $400 million stake in the french food company. good morning it is tuesday. once again, european equity markets are heading higher that said we don't have all the equity markets open today. volumes will be lower than usual given that there is a public holiday in the places like india, poland, greece. the xetra dax is what we're showing. it's up by 0.25% so we're still benefiting from this return to equities, this return to risk after we are trying to forget about the risk aversion that happened last week given the events between north korea and the u.s. let's look at the european markets one by one

the ftse 100 is up by 0.1% the cac 40 is up by 0.2% danone is a factor we'll get to that story in a bit. first, let's focus in on the big news out of washington and the u.s. yesterday intel's brian krzanich and kevin plank are the latest ceos to step down from president trump's ceo council. this after the president failed to single out white nationalists for violence over the weekend. kenneth frazier said as he was leaving the council that america's leaders must honor our fundamental values by clearly rejecting expressions of hatred and bigotry and group supremacy. hallie jackson has the latest on the controversy that sparked the

ceo resignations >> reporter: president trump today delivering the message many wanted sooner >> racism is evil. and those who cause violence in its name are criminals and thugs including the kkk, neo-nazis, white supremacists and other hate groups. >> reporter: in unscheduled remarks, the president expriss s condemning those groups after he didn't on saturday triggering an onslaught of outrage in these last 48 hours. >> to anyone who acted criminally in this weekend's racist violence, you will be held fully accountable. >> reporter: saturday an initial response seemed to spread the blame. >> hatred, bigotry and violence on many sides. >> reporter: by sunday even top republicans wanted something stronger >> call this white supremism, evil >> reporter: later a white house

spokesperson slammed hate groups like the kkk, with the attorney general insisting the president was forceful >> he's not afraid to call out terrorism overseas, but here's a president who didn't do that why? >> the president did do that yesterday. >> that wasn't the president >> reporter: now >> did you explain why you did not condemn those by name over the weekend. >> they've been condemned. they have been condemned. >> the president sees the alt-right and white supremacists and all that crew as part of his base his view, pull and keep as many of those voters as i can >> reporter: the attack in charlottesville a reminder o the role of presidents in times of crisis like september 11th. >> none of us will ever forget this day yet we go forward to defend freedom. >> reporter: the charleston church shooting. ♪ amazing grace >> reporter: all presidents meeting the moment, and for president trump a critical one now.

>> that was hallie jackson reporting. president trump is expected to sign an executive order aimed at streamlining the reviewing and permitting of big infrastructure projects he has proposed a mix of private and public spending to realize a trial ond trillion dollars worth of spending given all the escalation and the risk of words between north korea and the u.s., when we look at the fundamentals in the u.s., do they look so rosie given the uncertainty over policies? >> they don't look great u.s. gdp growth is expected to be between 1% and 2% corporate earnings are okay. that's mostly companies bringing overseas earnings back to the u.s. i think overall, the u.s. economy is just okay it's not particularly brilliant.

i just wonder whether this market, this revival after the north korean incident is reflective of the fact that there is no alternative at the moment bond yield is low, at least with earnings yield from the s&p you are getting a bit more i wonder how long it can keep going. if there is no alternative that means investors will be pushing the u.s. markets higher. is that the case what could finally stop them yes, there could be another geopolitical crisis. is there anything out of washington that could currently stop them? >> at the moment it's nothing that will specifically stop the markets, there's more a sense of exhaustion coming through. if you look at the shill eer ca, it's just over 30 times. where we are now is suggestive of a five and ten-year return of zero, or low single digits it's not so much the market will be derailed, but we'll move into a more sideways area where not

much goes on >> one of the questions that you asked in a recent report is how sustainable are u.s. profits we have a nice chart to illustrate that usually gdp growth and u.s. corporate profits rise in tandem or fall in tandem. what does this chart tell us >> it's suggesting that earnings are becoming more unsustainable versus gdp earnings have been driven by a squeeze on labor we've seen the labor numbers, wage numbers come out the last few years. they're stuck at low levels. we are not getting those wage levels coming through, because the phillips curve not coming through, there's not much further -- no further for capital to suppress labor from this point onwards that's why eventually the u.s. domestic companies will run out of road. >> so that means gains will be limited at some point. where else would you go if it's not necessarily the u.s. equity markets? up has had a good run.

emerging markets have seen massive inflows. is there further room to run there? >> i think there is for europe if you look at the und under-performance of europe against the u.s., that's been going on for many years. that's just starting to reverse. growth is already at the same level as u.s. gdp. it will improve from that point on you have low inflation consumer pricing power will get better yes. the strong euro has been a head wind recently, but euro tends to focus on value added so a strong euro doesn't have to be a head wind for much longer >> what if you look towards beyond equities and towards government bonds i have guests tell me don't go into government bonds at this time even jamie dimon said so the other day, he wouldn't touch government bonds at this point you're not a fan of government bonds either, are you? >> no. i think bill gross had one of the best quotes, government bonds are a super nova about to

explode what i've done in this chart, i've created a synthetic pe ratio for the ten-year government bond, it's trading well over 40 times it says there. so they're expensive there's an outrageous price for safety in government bonds fund managers have been saying government bonds will sell off, and it doesn't happen. they're so expensive relative to some alternative diversifiers out there, even insurance-link bochbd bonds, mortgage-backed securities there's places where yields are low and prices are expensive >> where are the places to go if you stay in fixed income >> short duration high yield, avoiding the energy complex. you can get return out of that area insurance-linked bonds these are not great yields, 3.5%, 4% yields, reasonably steady, correlated to equity

markets, you can eke out a carry base return. >> that does beat the returns you can get from some dividend yielding stocks, or can it >> you have to bear in mind that equities are running out of steam. you won't get the capital appreciation from equities let's say equities give you another 4%, 5% over the next 12 months, that the optimistic, but it will come with volatility of 12%. you can get alternative sources of carry with 4% yield or 4% carry and the same level of volatility the risk adjusted return is attractive >> you like europe, what about currencies are you a fan of the dollar? do you think it will make a huge comeback in the second half of this year? >> i don't think it will make a huge comeback but it has further to rise. i think the u.s. economy is not heading into recession the preconditions for recession are not there. the u.s. economy is doing okay i wonder if the dollar is being

too beaten up, particularly against sterling where the economic data out of the uk is so appalling negotiations are given such high levels of uncertainty. i would be betting against cable at this point. >> we had a guest on from bank of america merrill lynch yesterday saying the same. julian, thank you very much for that julian howard. north korea has put on hold its plan to launch a missile towards guam kim jong-un plans to watch u.s. actions before taking a decision asian shares and the dollar strengthened in the wake of that news south korea's president moon is calling on the u.s. to prevent war through diplomacy. bill neely has more. >> reporter: the chairman of the joint chiefs of staff, general joseph dunn ford hford in seoulo reassure south korea, they are

anxious that they've been ignored by president trump and as an ally it's been sidelined rather than consulted. >> that's what we're preparing for, and trying to have a diplomatic and economic pressurization campaign to preclude him from enhancing capabilities >> reporter: president moon of south korea that his own reassurance to do. people here are nervous. he called on the u.s. in one of his strongest statements yet to stop any possible war and that diplomacy should be at the forefront of everything. also saying that he is certain the u.s. will act calmly and responsibly. he also called on north korea once again to stop threatening, to stop provoking, to stop worsening the situation. it wouldn'tbe a typical day if north korea did not make its own

statement and in state media it has been saying that any accidental event could lead to a nuclear war. it said don't take our warnings lightly. china for its part today began to tighten the screw on north korea. remember, north korea's is china's main alley and trading partner. china said from september 5th it would begin stop importing coal, iron ore and fish. that in line with u.n. sanctions. undoubtedly that will put pressure on the north korean economy and that is what joseph dunford would like he goes from here on to beijing. back to you. in the meantime, let's go back to take a look at sterling, which is down following comments by david davis saying there will not be a divorce payment figure by october we'll have more on the brexit

developments in the later hour we will be speaking to widely followed british economist jarrett lyons at 9:30 cet. still coming up, after years of political turmoil, is egypt finally open for business? we'll discuss with the country's investment minister. we'll be back in two there's a denture adhesive that holds strong until evening.

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change the news comes on the heels of a "new york post" report suggesting danone could be a potential takeover target which also pushed the stock higher a deal involving danone would be the latest in a series of tie-ups in the food and bank sector reckitt benckiser sold earlier this summer. and unilever and nestle are looking to sell a number of confectionary brands president trump has launched an investigation into china stealing intellectual property violating international trade laws speaking in the white house after signing the memo, president trump said this was just the beginning >> the theft of intellectual property by foreign countries costs our nation millions of jobs and billions of dollars

each and every year. for too long this wealth has been drained from our country while washington has done nothing. they have never done anything about it washington will turn a blind eye no longer. today i'm directing the united states trade representative to examine china's policies, practices and actions with regard to the force transfers of american technology and the theft of american intellectual property >> egypt has vowed to maintain its blockade of qatar despite international efforts to end the crisis alounge r lo egypt accuses qatar of supporting terrorism the four arab states leading the boycott moved to reassure u.s. companies doing business in doha in a joint letter to rex tillerson, the countries say american firms would not be

affected egypt hopes its new investment law will bring investment back to the country the new legislation hopes to attract foreign investment by cutting bureaucracy and providing investment incentives. we are joined by sahar nasr egypt's investment minister. this new investment law, how significant is it and what has changed when it comes to inflows into the country >> in fact we are already seeing the returns of that law, the law has been effective, earlier ratified by the president, abdel fattahal sisi at the end of may. if we look at numbers already, foreign investment is picking up we reached 8$8.7 billion, which is like a 26% increase as opposed to the previous year total investment has also gone up by 11%, reaching 276 billion

egyptian pounds. so the reflections of that have been translated into investment coming into the country. >> those are significant numbers. i can only congratulate your country on achieving this. a few years ago it did look rosie for the egyptian economy since the country has floated the pound, it has made huge progress, also in terms of averting a liquidity crisis and in terms of public fips stnancep the country has taken. do you think you are now once again a country that investors see not as a safe haven but an attractive investment opportunity? >> i think looking at the whole comprehensive economic reform program where the flotation of the foreign exchange was a key pillar that was packaged with the comprehensive legislative reforms to improve the business

climate, and in addition to, of course, allow fiscal reforms as well the government has moved forward in making sure the infrastructure is in place in terms of energy, roads, highways, that's also a prerequisite for bringing in the private sector so i will not even limit the legislation to the investment law, there has also been an amendment to the company's financial law, financial inclusion is a key pillar where also the stock market has been playing an active role in bringing in the investors. if you look at the pipeline, there's already a lot of investments coming, whether from the gulf or from europe as well, in addition to the local and domestic investments that we have the figure, for example, let's see july the last month there has been a 76% increase as opposed to the previous july. the economic reform program is

paying off we can see that in a lot of indicators in addition to the removal of the bureaucracy, streamlining the procedures that used to take a longer time as you referred to >> these measures usually don't come without side effects. the side effects in the egyptian economy is sky high inflation. cpi has skyrocketed because the 50% plunge in the pound since the flotation, also seeing higher debt servicing costs. to what extent is this constraining investment? >> that was a very good move from the central bank, because the inflationary pressure, that's why the interest rate was increased to also mitigate all these inflationary pressures more importantly the government moved forward with the social safety net package that addressed the groups that could be and are adversely aftfect the by these reforms we have safety net conditions, vouch eers for food, but also

housing that provides the best services for the lower segment that could be affected by the economic reform. there is no reversal because for the medium term and long term these reeconomic nick economic necessary for the country. we heard in the introduction that egypt is not backing away from the blockade against qatar. i wonder wto what extent that ha hit your country how are you feeling this impact? when do you think it will come to a conclusion? >> i just looked at the figures, and i see that despite all the challenging environment in the region, overall there's still a lot of investments coming. in fact it's picking up because a lot of i investor ve investort

opportunities in egypt to invest and come back. that's why we're putting a lot of investment opportunities and we see that as reaping fruits. the numbers prove that >> all right thank you very much for your time best of luck for the recovery of the economic situation in the country. sahar nasr, thank you. still coming up, the latest uk figures are out in a few minutes. we'll bring them to you live after this short break do stick around. robbed. that's why i started lendingtree-- the only place you can compare up to 5 real offers side by side, for free. it's like shopping for hotels online, but our average customer can save twenty thousand dollars. at lendingtree, you know you're getting the best deal.

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welcome back to "street signs. i'm carolin roth these are your headlines european equities follow asia and wall street higher as north korea says it will wait and see before making a decision on firing missiles towards guam. america's c-suite reacts to charlottesville. the ceo of intel becomes the third executive to leave president trump's manufacturing council after the bosses of merck and under armour head for the door and david davis confirms the country is seeking a temporary customs deal with the eu, putting pressure on sterling

welcome back we have roughly 15 seconds to go until we get the uk inflation print for july the expectation is for a print of 2.6%, steady from the month of june. that was a relatively low number after much higher ones in months prior to that. and that gave some reprieve to some hawks on the npc. now we have the number out uk july cpi down 0.1% on the month, up 2.6 for the year that's bang in line with expectations sterling/dollar taking a dip lower, 1.2916. we have got the uk july value at 2.6% i'm not sure what expectations were here.

from what i saw they were 2.6% apparently the forecast from dow jones was a 0.0% print on the month, what we have got here is that also uk factories raw material cost inflation tumbling in the month of july let's get some initial reaction with jarrett lyons from net wealth is it more or less in line with what you anticipated >> good morning. relative to the market these are good inflation figures last month's inflation figures were significantly better than the market expected. >> better in that they were lower. >> lower last month. so this month's data today, the market was anticipating a slight edging up. so in that respect, after last month's very good figures, today's figures kept steady at 2.6. that's showing inflation is lower than the market was fearing. the good news is that pipeline

inflation is also continuing to fall to put this in context, it is still possible the next few months that inflation could edge up on the year-on-year basis the bank of england is expecting it to peak this autumn we expect for two months inflationary pressures are better than the market expected. the weakness of the pound is fully feeding through. this is also reflecting that core domestic inflationary pressures remain subdued that means the bank of england will not change interest rates for some time. >> as i said before, it does give relief, easing of pressure for some hawks on the npc. you said that inflation is going to be rising towards the fall, then it will level off probably. what exactly is the reason behind this? is it once again another fall in the pound sterling you're forecasting? >> june of last year we had the referendum from june of last year to spring

of this year, february inflation rose more in america, eurozone and germany than in the uk since february it's been the weakness of the pound that fed through. that's starting to fall out of the equation the key issue from here on in is not just the pound but what's happening to domestic core inflation. inflation could have already peaked that would be the big surprise, but the market expects it to peak in the next few months then trend down significantly next year. that will help the uk economy very well. consumer price inflation falling in the background of wages, that gives a big boost to the economy next year. so in the near-term, the good news is that inflation is not picking up that gives them more room to maneuver and then focus on other economic figures.

order books are at a 30-year high in the uk because exporters are doing so well in the back ground of a global economy the data in the uk is far better than sometimes people give you the impression it's maybe indicating that the economy is likely to grow at a steady pace in the second half of the year. you mentioned the labor data, which will come out tomorrow the key issue is wage growth that's been anemic and something that is puzzling us, not just in the uk but also in the u.s. with low inflation prints there at what point do we see real wages not being squeezed longer? >> from this autumn. >> that's great news >> once inflation starts to peak, as i say having had two good months of inflation figures, thit could be the case that inflation peaks far sooner. wage growth is subdued moving into next year, we're likely to see wages holding up and inflation starting to subside. >> that should be great news for the uk consumer.

stick around, we have these exciting stories to get through making headlines across the uk the uk is seeking to clinch an interim trade deal with the eu after brexit speaking this morning, david davis confirmed the government's plan to propose a democrat prayer customs union saying britain probably won't have to pay too have such an arrangement. the brexit secretary also said that the uk would not continue to pay the 10 billion pounds a year it currently contributes to the eu, but that any number on the divorce bill would not be decided before october he added that while the eeu was cross with the uk over the bill, the issue will be sorted soon. the european commission welcomed the publication and said it will study the proposal carefully and only address the issue of a transition period after significant progress is made on withdrawal terms your reaction to this? it has us scratching our heads

seems like the uk wants to have the cake and eat it as well. is that how you see it >> i think this is a sensible suggestion let's be clear the uk wants to leave the customs union and leave the single market that makes complete sense the issue then is do you leave immediately or do you propose what i would call a temporary transition agreement for britain. temporary in the sense of in the case this morning of a three-year proposal. it doesn't need to be that long. but a temporary arrangement. a bridge there's been all this talk of cliff edges, all that stuff. we have a different analyses, it's a bridge, you concede what you're getting on, you want to know how long the bridge is and where it will take you what we're seeing proposed here is effectively a bridge to counter act those talks and fears of a cliff edge. it's a temporary agreement, three years. it's not a case of cake and eat

it of course we have this negotiation. i think we're overly focusing on the negotiation to the exclusion of all other things. the negotiation is very important. but at the same time it's what we do in the domestic economy and how we position ourselves globally some people would be fearful about what this means k we do trade deals immediately, or will they have to wait three years. >> i'll have to come back to the proposal it's a bit mind boggling i think to quote some labor mp, he said this was fantastical the rules don't allow the uk to actually negotiate bilateral trade deals while in a customs union. how do you go against the rules? >> the uk is leaving the eu. so no other country has left the eu that's why we're having negotiation. the question is do we leave immediately? what's been proposed here is a transition if we were waiting until march

2019, we can start to put the ground work in place for international trade deals but we can't do anything. from a uk perspective, you don't need a trade deal to trade so things hold us back already, but ideally it would be good to conduct trade deals immediately. i would imagine without having read the detail, this is very much a compromise to ease fears of business, remove immediate concerns, but at the same time it might delay the uk's ability to do those trade deals. overall people would see this or the markets would see this in a positive light it's basically a sensible compromise that moves us forward. >> on the become of this proposal, markets were unchanged. steriles did not move much sterling did move on the fact that we got comments from david davis who said that we wouldn't

have the brexit bill by october. there seems to be a lot of -- >> the divorce bill. legally the uk does not have to pay any divorce bill but if we have a temporary three-year transition period, what's likely to be the case is some sort of compromise where the uk may pay in something over the three-year period. there's nothing in international affairs that prevents you from paying to subscribe to things if you want to be part of science budgets. so the uk will be doing that any way. on top of that, as part of this transition deal, there will be compromise on the divorce payments overall the way to view this is a positive development what we're not picking up in the uk press and media, dare i say, is that in germany, france and italy that the business groups there are pressing their respective governments quite aggressively in some respects to sort out the deal with britain soon for them the uk matters for

trade what we're seeing this morning from the brexit sector is focusing on the fact that uk-based businesses want clarity about what happens in 2019for the next few years after >> certainly good for business if that is approved by the eu commission we'll see how they respond thank you very much for your time and analysis. >> thank you wolfgang schauble says the bank's ultra loose monetary policy will come to an end in the foreseeable future the german finance minute feris repeated criticism that interest rates are too low but that the rate environment is getting better schauble also said the ecb needed to be careful when tightening. william dudley says he favors another rate rise this year in an interview dudley said that if the economy eslov volves as forecast, the fed should hike rates again this year.

the new york fed president also praised the trump administration for being "hands-off with the u.s. central bank and for not politicizing monetary policy." let's stick with the u.s want to show you what futures are doing this morning lots of green on the chart the dow jones seen higher to the tune of 40 points. the s&p could add on 3 points. the nasdaq adding on 16 points this after stocks closed sharply higher yesterday this is after we see the absence of further escalation between north korea and the u.s. it was the best day of the summer so far with the dow adding 135 points european markets, many markets are closed today that's why volumes are some what lower. the italian, austrian, polish and greek markets are closed for holiday. the xetra dax is seeing gains to 0.25%. the ftse 100 up by 0.25% the banks once again leading the

charge when it comes to the sectors. in the fx markets, the dollar is making a comeback against the yen. as i said, that's because of the quieter tone around the geopolitical risk this week. it's up by 0.7%. cable is losing a little bit more steam, but not too big of a move on the day on the back of the data we got out at the bottom of the hour cpi data at 2.6% for the year. coming up, alibaba shares are up 7 0% this year. find out which hedge funds have piled into the e-commerce giant's rally after this short break.

big hedge funds are pouring

money into alibaba according to the latest filings, four hedge funds built new stakes in the eshg commer-commem dan loeb added 4.5 million shares alibaba shares are up 70% in 2017 the company will report earnings on thursday. >> reporter: we are looking at hedge funds pairing back stakes in healthcare and banks. it appears as dan loeb wrote in his quarterly letter that the trump trade is fading or becoming less popular. appalossa took huge positions in pharmaceuticals during the fourth quarter and in the second quarter david tepper eliminated mylan and fpfizer from his portfolio. starboard and third point also sold shares in baxter.

banks were unloved by hedge funds during the second quarter. soros sold out of goldman sachs as did moore capital which eliminated morgan stanley and slashed stake in boa third point slashed its stake in jpmorgan and duquesne got rid of bank of america. berkshire hathaway disclosed a new stake in synchrony financial. we saw a lot of hedge funds take money off the table in f.a.n.g.s, especially amazon tiger management and tiger global pared back f.a.n.g. holdings only one hedge fund we track took a stake in blue apron ja jana then there was snap. jana, third point and appalossa completely sold out of snap during the quarter

the next apple watch continue need to be linked to the iphone to make calls or stream music that's according to a cnbc source who says the product will be released in september apple has already announced plans to release watch os4, the wearable operating system in the fall and apple and aetna have held secret talks about possibly providing the apple watch to the insurance company's clients. aetna already offers the wearable technology to employees, but it is considering extending the offer in a push to increase consumer interest in healthier lifestyles let's get to the bottom of the news with arjun kharpal who broke the news about the apple watch becoming a stand-alone device it's been rumored about for a long time. what does this mean? >> it means the after pple watch doesn't need to be tethered to

the iphone anymore so you don't need the iphone with you to make calls if you're going ton a ruon a ru can stream music and you don't need your phone on your body in the next operating system, apple says there will be a siri watch face so siri requires internet functionality to do searches and set reminders, so that's another use case so apple is trying to make this into a device that people can buy even if they don't necessarily own an iphone and give it real use cases and functionality beyond what other smart watches on the market have >> why are they doing this now because there's so much demand or because sales have not been as encouraging as they have been we all read about the very slow start of the apple watch sales to be honest, apple didn't release that many figures about it is it simply because technology has improved so much they can do it >> it's a bit of all of that the apple watch has been slowly

doing fairly well. wearables didn't explode like the market expected them to. but they've had a steady growth. tim cook has spoken about the potential of this in areas of healthcare to enterprise one thing about adding cellarulr to anything is the amount of battery it eats up so this requires a lot of battery technology and think being how to design this device to be battery efficient. apple could have brought this into the market to start, but it may have only had an hour battery life so now apple is at a point where they think they can bring it to market with a battery efficient form >> will it be more expensive because of that? >> most likely >> all right arjun, thank you very much for that shares in snap faced a self confidence barometer on monday as employees became eligibility to selleligible to sell a portio

their holdings this after recent quarterly results fell short of analyst expectations julia boorstin has more. >> reporter: snap shares hit a new all time low monday morning before rebounding ending the day up 6.5%. the move that market watchers attribute in part to short covering it picked up and short interest is at a three-month low according to ihs this despite news that dan loeb dissolved its shares in snap the lockup expires monday on a 782 million shares held by employees, nearly four times the number of shares in snap's ipo about three quarters of those are owned by directors, executive officers and other affiliates the s.e.c. limits how many they can sell in any quarter. no individual can sell more than 1% of outstanding shares of the class of stock that they're

selling. co-founder evan spiegel and bob murphy announced they will not sell any of their 211 million shares each this year. that does leave 182 million shares held by other employees jpmorgan saying that should "help alleviate near-term concerns around the lockup." facebook and twitter both hit their bottoms the day after their lockup expirations back over to you >> that was julia boorstin reporting. let's continue with our rise of the robots week where we're exploring how technological breakthroughs will shape our lives. now to quantum computing, which turbo charges computerers by allowing them to carry out several functions at once. the tech can be applied to many different industries possibilities are just beginning to be understood joining us to explain this is peter smith from the university of southampton

what is quantum competing all about. tell us in lehmaylayman's terms >> so it's not just zeros and ones, it's a zero and a one at the same time. so a quantum computer can do a calculation, but all the possible calculations at the same time. so it's massively more powerful. >> how will this be applied to business right now it seems to be the domain of google, some fiphysics labs at universities how will this become mainstream? >> we're at an exciting stage where we've got people saying maybe quantum supremacy by the end of 2017. that means that they'll have a quantum computer that does something that the classical computer can't do. what does it mean for business well, it's huge. you give people much more

computing power, that affects finance, business, security. so you can use these things, for example, to crack encryption so you imagine a world in which a quantum computer can break much of what we're currently doing for security across the internet and finance >> that's really worrying. do we applaud this strength? do we applaud the rise of quantum computing if everything can be broken into essentially when it comes to banks and government secrets this is part of the transformation that quauntment te quantum technologies brings. just a few days ago we heard china had a ground station and a satellite, and demonstrated this that's guaranteed secure so nobody can break into it. it comes with that risk but also a solution but then that also raises the question of how will government is, and people feel about totally secure communication that nobody can ever break into. >> who polices this? is this a trend that can get out

of control and no one can get on top of it anymore? because it's simply too smart? >> i don't think there's risk of that at the moment the systems people are making a really small thing 17 quantum bits. we know we need to get to 50 for quantum supremacy, and getting to thousands could be years or decades. it's such a transformational activity, it's critical that we develop these things and everybody is aware of these things >> but you say the supply chain is probably inefficient. what needs to be done? >> this brings new opportunity if we think about what computers did, they started with ideas in the 19th century, then the first implementation in the 1950s, until we got to an iphone, that was 50 years so we have to create new opportunities. new intel, new ciscos, we can anticipate all of these things

happening. if it is used for portfolio optimization by a fund manager, does that person need to be a mathematician or physicist >> people are already starting to do this, think about what is the front end going to look like how can i access this stuff over the cloud? my guess is these things will be starting off in data centers, people will access them and packaged to make them usable >> peter, thank you very much for this crash course in, i don't know, physics, mathematics, whatever you want to call it peter smith from the university of southampton u.s. futures pointing to a higher open today. that's it for today's show i'm carolin roth "worldwide exchange" is up next. see you tomorrow s to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory.

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breaking overnight two more high profile ceos leave president trump's manufacturing council in response to charlottesville. backing off. north korea tones down its rhetoric sending stocks globally high higher. and new details in the bitter board battle within uber. "worldwide exchange" begins right now.