hello. welcome to "street signs." i'm carolin roth these are your headlines chinese president xi jinping touts socialism laying out the vision for his country at the party congress >> currently we are undergoing complex changes. our country's development is in the critically strategic period. shares fall in wreck kit

bank. tand shares in zalando fall after sales growth we have a lot of things to get through today. let's look at the markets one hour into the trading session. the stoxx 600 is up marginally to the tune of 0.1%, this is following a small dip to the tune of 0.3% in yesterday's trading session. as we look at what's doing well today, we have out-performers like germany to be honest we had the first q3 earnings results rolling in, and they were disappointing. talking about zolando and akzo

nobel. let's show you how we're faring today. the cac 40, the xetra dax eking out modest gains we get the wage data later this morning in about a half hour's time that will be key for boe watchers the ibex 35 continues to underperform off by 0.4% we'll touch on what mr. rajoy has been saying in the spanish parliament this morning. when it comes to the sectors, this is the view. real estate, healthcare, travel and leisure outperforming, on the down side, construction, telecoms and banks not a lot of movement on the sector front let's get back to our top story. china's 19th party congress has begun in beijing addressing delegates for 3 1/2 hours, president xi jinping vowed to build a modern socialist country continuing to open china's economy and deepen

financial reforms. he also pledged to safeguard sovereignty and security let's get out to eunice yoon this is probably a record length for any chinese president. take your pick about what you think were the highlights and the key takeaways. >> one of the highlights was the fact that this was 3 1/2 hours it was a 65-page report. this was the longest that the -- any chinese president has been making this speech this report, in any of the party congresses the president was ushering a new era for china. in this report he was talking about the importance of addressing certain issues like income inequality, playing up the idea of socialism with chinese characteristcharacterche

also said it's time for china to put its face on the world militarily and economically. >> translator: today compared to any time in our history we have never been this close to and confident and capable of realizing our grand mission of revitalizing our country and culture. >> he said that china needs to become a mighty force. in terms of more specifically about the economy, he said that china would continue to be more and more open to the rest of the world. he said china would not be closed off and reiterated again an idea that he put forth back in davos earlier this year, when he said openness brings about progress in terms of what that means for foreign investors, he addressed that as well saying foreign investors would have more market access as they have been calling for he said the services sector would open more quickly. and he also said that foreign

investors would have their interests as well as their rights safeguarded in this country. so that would be music to the ears for many foreign investors, at the same time, as you know, the chinese approach towards the economy has been quite contradictory, especially with this administration, where back in 2013 there was a party document, which laid out that the markets would play a decisive role in the economy there are many people who believe that the xi administration has not been prioritizing the markets as much as they have been prioritizing the state. again in the speech today, we heard another line about the importance of reform to the state-owned enterprises, but the reform would not necessarily be what foreign investors were hoping for, in terms of having the state owned enterprises reformed to be better and stronger but at the same time

bigger that's what many foreign investors had hoped would not happen because they wanted to see the state-owned enterprises broken up more and a withdrawal of the state sector from several different industries >> thank you very much for that. you make a couple of interesting points one of those points with jonathan fenbi from t.s. lombard. eunice pointing out the fact that foreign investors want to see less of a role for state-owned enterprises. the president this morning saying they should be bigger that's a contradiction to letting market forces play how does that work >> xi made the right kind of language in terms of china trying to put itself forward as the great champion of openness and globalization. the policy is very much summed up by the beginning of the speech that china is succeeding and must continue with the socialist market economy and the state and the chinese

idea of socialism is at the center of that foreign companies will find increasingly, yes, there's still room for them in china but they're expected to operate within the birdcage of the chinese state. >> the big speech delivered in davos, driving force of free trade and globalization, do we have to take it with a grain of salt >> you take it with several grains of salt or rice or whatever yes, china is keen to work with the world, it is independent of the global economy, but still kept a lot of obstacles, restrictions at home and recently we had the build up of not just the state but the communist party's role in the economy. when i was in beijing, the heads of foreign company there's were telling me they were told to

talk to the head of the communist party cell in their joint venture partners rather than just to the management. >> that's insightful let's talk about the future of the communist maparty. mr. xi is about to embark on the second five-year term. there's a lot of speculation whether he will go for a third term if he anoints a successor and announces a name within the next couple days, do you think he will still go for that third term is this something he aspires to? >> in a sense, that's the question, it's not whether or not he goes to a third term but how he continues his power, which may be for a third term or that may be upsetting the norms too much he may make himself party chairman which would give him a superior position, or he may officially retire but be sitting at home at the end of the telephone telling his successor what to do i don't think he's a man who will go off and play golf. >> some people likened him to

putin or putin's role in the russian economy. do you think he would take a role similar to that in the sense that there will be too much concentration of power at the top. i saw in one note you think concentration of power could be positive for china t could lead to the implementation of the reforms which has been lacking >> yes, it can push through change the question is what kind of change this will be party directed change. what you got already, again, i saw this in china, is the party technique which is not to work through local governments but send in inspection teams from the center with pretty draconian powers to impose central rule. that's what we'll see a lot of over the coming years. direct rule by xi at the center. the problem is he's so much a one-man band even if we get new members of the standing committee, as we will at the end of the congress in a week's time, it's still

xi's show. if something were to happen to him, there's no successor. >> we talked a lot about domestic politics what about the global stage the last couple years have been haphazard. there's been a lot of conflicts in the south china sea the u.s. that relationship is difficult now with trump and trump has been using trade as a bargaining chip for north korea. where do you think that relationship is going? >> we will see in a month's time when trump visits beijing. so far he's been good news for beijing. he's opened doors with the tpp, and china walked straight into it the davos speech a great example. china is in no hurry it knows it has a relationship which it has to keep going with the united states, but it's not happy with it. the united states is not happy either this is like a marriage, neither

side can bring themselves to divorce. but it's scratchy and it will continue like that >> trump will be visiting asia at the beginning of november what do you expect from that >> well, we'll be watching -- he will want to do a deal on north korea. >> which probably won't happen >> i think the chinese are loathe to get into any kind of solution to the north korea problem, which strengthens the u.s. presence in east asia china's long-term aim, which is clear from what xi was saying, is to replace the united states in asia. >> jonathan, thank you very much for that you'll stick around longer let's get back to some corporate news shares in zolando are trading lower as third quarter earnings are expected to miss forecasts adjusted ebita is expected to be between 5 million euros and a profit of 5 million euros.

zalando saw margins offset stronger than expected sales growth they plan to enter the beauty market in 2018 with a launch of a full range of products akzo nobel shares trading lower after the company issued the second profit warning this year shares off by 1.6% the dutch paintmaker posted weaker than expected third quarter earnings citing higher costs of raw materials and headwinds at its coating unit it is now expecting flat earnings before taxes this year and be shares of wrereckitt benckiser are higher one for home and the other for health products, this as they cut their full year outlook after posting declining sales in the third quarter. sainsbury's plans to slash

up to 2,000 jobs in its payroll and human resources departments, resorts over the summer sitting the second largest grocer was planning cost cutting savings of 500 million pounds sainsbury's has seen its market share fall with the uprise of a aldi and lidl. ibm beat revenue estimates in the third quarter its move to cloud and security services saw revenue climb to 8$8.8 billion, about 46% of the total revenue. the tech major also hinted at sales growth after nearly six years of declines. do e-mail the show the address is streetsignseurope@cnbc.com let us know whether you have issues or thoughts on what you see on the show. any questions to jonathan are welcome. and follow us on twitter, streetsignseurope@cnbc and tweet me at @carolincnbc

coming up, spanish prime minister mariano rajoy urges catalan leaders to act prudently as a deadline to drop an independence campaign looms. more after this short break. for your heart...

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welcome back to the show ecb president mario draghi has been speaking at the ecb structural reforms in the euro area event not a huge market reaction the comments that we've seen so far including draghi saying with monetary policy being accommodative we have a window of opportunity to take structural reforms, these have not been earth shattering. he says ecb research finds there's no convincing evidence that high interest rates lead to more reforms he says in his concluding remarks the crisis has confirmed more flexible economies are more resilient especially for countries part of the monetary union. lessons about how to design and implement reforms to maximize benefits and minimize short term

costs should be put in practice. let's see whether that can be realized germany's constitutional court has rejected a request for the bundesbank to temporarily exit the ecb's asset purchase program. the legal challenge was brought by german plaintiffs who claimed the central bank was violating a ban on direct financing of governments through its bond buying activities. joumanna bercetche joins me to talk all things ecb. we're waiting for october 26th, that is next thursday. the next meeting by the ecb. lots of reports not just this morning by the ft but over the last couple of days about the recalibration of the asset purchase plan. my question to you what will we be seeing? 12 times 20? 9 times 30 >> on the constitutional court topic that just came up, that removes one headache for them. they don't need to worry about that going forward, less of a concern. not that it was a major focus for the markets.

going into next week, most economists expect them to make a tapering announcement. the question is how long it will be and how long it will go for it seems like the market expectations have shifted towards a longer tapering horizon. and a shorter monthly purchase the package number touted is around 250 billion here. anything around that, i think, would be in line with expectations expectations of 12 times 20, 9 times 30, 9 months, 12 months, that would solve both of their issues the ecb has two things they're focusing on. one is that they're simply running out of bonds to buy in the first place. and the second thing, this is the most important element, maintaining market expectations of when the first rate hike occurs the sequencing argument and re-emphasizing forward guidance in the sense that, yes, we will have to started tapering, but

don't bring forward the timing of the first rate hike too quickly, because that will impact the currency, that will lead to a restrengthening of financial conditions again all this stuff they don't want so a happy medium between the hawks and the doves and the committee would be to go for longer tapering horizon, that way the market won't be so quick to price in an early rate hike they'll leave it until the end of 2019. >> ever since we saw the news information about the recalibration plan, we have not seen a major market reaction euro/dollar traded more on spain than that story alone. we saw a move in bunds do you think the big market reaction about tapering, that happened during the summer and that won't come next week? >> i think it's a valid point. people are less concerned about the currency bear in mind we have had a few political things that have arisen in europe you have the german election

outcome, the spanish tensions, across the pond the fed is set on the december hike, so that helps keep the euro/dollar intact bottom line, they telegraphed this quite well. most people expect them to make a tapering announce the next week it shouldn't be that much of a surprise >> joumanna bercetche, thank you very much for that. spanish prime minister mariano rajoy is hitting back at the catalan president, carles puigdemont, ahead of the thursday deadline to formally drop the independence campaign at a session of parliament, rajoy said his own government has acted moderately and had sharp words for puigdemont >> translator: all i ask, mr. puigdemont puigdemont, is to sensibly ask that he puts the general interests of all citizens first. it's not difficult to answer one question, you have declared independence for catalonia or

not? you understand if you have the government is obliged constitutionally to take action. if you haven't, we can talk, here in parliament as we have offered to all parliamentary groups >> let's get back to the man who wears many has thes thts this m, jonathan fenbi the catalonia issue, that's been going on not just for days but for months and years will it ever go away unless we see a constitutional change? >> probably not. it's been going on for decades this goes back to the early part of last century. you have rajoy very much speaking to his base and support in the rest of spain i would say the independents in catalonia, having pushed the vote out, they are isolated at the moment we have all the political, economic, all the european elements in this which are not in their favor

so rajoy is taking a tough line throughout, which he has to do for the rest of pain i was in france last week, there's much more interest among politicians and foreign policy wonks and so on in catalonia than there is in brexit. maybe britain is now a side issue there. partly because spain was seen by the rest of the eurozone as taken the tough medicine, done the us a terry measures, done the reform, unemployment is still high, but they got growth up to german levels or better. in that sense they were the poster boys, and the eu doesn't want to upset the government in madrid >> interesting points or remarks about brexit and about the uk. interestingly enough, i also saw an ft article this morning overnight saying theresa may had spoken out in favor of rajoy or has tried to support him maybe she's hoping for one of thellies in her fight

for brexit >> could be. i think madrid is in strong position from that point of view certainly, you know, britain, who knows what the negotiating strategy really is, and will be. but the uk could do with all the allies it could find >> definitely. there is always the fear among market participants that the spain issue, the catalonia issue will lead to a wider breakup of the eurozone once again with more and more regions trying or pushing for secession. do you think those fears are overdone >> i think that's overdone myself i think actually what may happen may be the opposite way around people will see the catalonians have tried their independence bid. i don't think it's going to work that will strengthen the hand in a sense of central governments and you got some similar independence movements, you a

son mouse mo autonomous movements, but otherwise unity, national unity is at the core of the eu and will remain so >> what is the biggest risk for the eurozone if it's not catalonia? is it italy? >> it is italy they have moderated somewhat >> it is italy next year the uncertainty, lack of a cohesive political outcome from the elections next year in italy. that could, given the size of italy, that would have repercussions throughout i think that remains the biggest risk >> jonathan, thank you very much for talking us through everything from china to the eurozone to brexit to italy. jonathan fenbi still coming up, is qatar any closer to resolving its diplomatic spat with saudi arabia and the other gulf cooperation council members? we'll bring you our exclusive

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welcome to "street signs." i'm carolin roth these are your headlines chinese president xi jinping touts the success of socialism laying out the vision of the future for his country at opening of the party congress. >> currently the global situation is going profound and complex changes. our country's development is still in a critically strategic period our outlook is bright, but our challenges big akzo nobel shares fall after another profit warning as the dutch paintmaker posts weaker than expected earnings in the third quarter hitting by rising raw material costs. a fashion foux pas zalando misses earning despices stronger than expected sales

growth we're waiting for some unemployment and wage data coming out of the uk those will be out in about 20 minutes. let's show you what the fx markets are doing. pound sterling against the green back at 1.3181. we did see that drop yesterday as we got more dovish than expected comments coming from the new deputy governor of the boe. we got uk earnings growth narrowly beating forecasts average wreakly earni lyweekly , versus a poll print of 2.1%. in august aalone, 2.2% looking at the jobless rate, holding at a 42-year low the actual print is 4.3%, bang in line with expectations. seeing a spike in

sterling/dollar, no surprise given that the wage data is better than expected many would argue that this will seal the deal when it comes to the november rate hike by the boe. yesterday we got that inflation print of 3%. that was in line to give ammunition to the hawks out there. european equity markets, the dax up by 0.2% the ibex 35 continues to underperform as we go into the thursday deadline between madrid and barcelona. the ftse mib also slightly lower. we had some third quarter earnings rolling in. for the most part they were disappointing. i am talking about zalando and akzo nobel here. when it comes to the u.s., we're in the full swing of things when it comes to earnings more bank earnings yesterday and they slightly beat expectations. when it comes to futures, the

s&p 500, the dow jones and the nasdaq are positive. especially the dow jones seen up by 46 points the dow crossing the 23,000 level intraday for the first time yesterday but failed to close about that milestone. we saw record closes for the dow and s&p 500, and just a little bit of stats for you now the dow has seen a record close in one out of four sessions this year that's 50 out of 200 i wouldn't be surprised to see another one today. the big question is will it close above the 23,000 level we also get more earnings today from the likes of ebay now republicans and democrats have reached a deal on healthcare, that saves aspects of obama care providing insurer subsidies for two years. president trump blocked the payments with an executive order signed last thursday which saw some premiums rise between 20% and 30%. republican senator lamar

alexander who brokered the deal said it would help avoid chaos responding to the agreement, president trump emphasized it was a short-term solution, and far from the ultimate goal >> lamar has been working very, very hard with the democratic -- his colleagues on the other side patty murray is one of them in particular and they're coming up and they're fairly close to a short term solution. the solution is for a year or two years and get us over this intermediate hump, we either have the votes are we're close to getting the votes for having the potential of great healthcare in our country. they're working. but it's a short-term solution, so that we don't have this dangerous period >> let's get back to stocks. the u.s. healthcare sector had its best day since august and hit a fresh record close held by the obama care deal and strong earnings

united healthcare, johnson & johnson had the biggest impact with united having the best session in a year. both companies beat earnings estimates for the quarter and raised their full-year guidance above forecast u.s. and canadian trade officials accused eachother of sabotaging efforts to renegotiate the north american free trade agreement speaking at the end of a seven-day round of talks, the canadian foreign minister accused washington of pursuing a winner takes it all attitude in negotiations to modernize the decades old nafta pack kayla tausche has more >> reporter: talks to renegotiate nafta are heating up and dragging on. any have extended the deadline of talks through march of 2018 thanks to significant concept cal gconceptual

gaps u.s. proposals encourage u.s. manufacturing and upend the agreement. we have seen proposals that would turn back the clock on 23 years of predictability and openness under nafta in some cases these run counter to wto rules. businesses and lawmakers have sided with canada and mexico fearful of wholesale changes to the deal that could upend operations and increase costs. the u.s. trade representative doubling down on the administration's focus on trade deficits but sounding down beat for the prospects of a tri l trilateral deal. >> we have seen no indication that partners are willing to make any change, is that will result in a rebalancing and a reduction in he's huge trade deficits the president has been clear if we're going to have an agreement

going forward t must be fair to american workers and businesses that employ our people at home >> reporter: even so lighthizer told reporters there's no active process to withdraw from the deal but he said he would consult with president trump about next step the and more difficult subject matter would come up in the rounds ahead. president trump says the u.s. stands with greece as it recovers from its economic crisis the greek prime minister met with trump in washington where the two leaders discussed defense, energy, commerce and trade. speaking after the meeting, trump praised the u.s. and greek economies but was caught off guard by comments made by tsipras in the run up to the 2016 presidential election >> i just want to make an initial comment that the stock market just hit an all-time record high. it broke for the first time

ever, 23,000 so we're very happy about that i hope greece will be doing the same thing very soon i think they will. but i'm honored to welcome prime minister tsipras to -- of greece, and he is a special man who has done a very special job. we're grateful to the prime minister and to his entire delegation for visiting us today at the white house >> mr. prime minister, with respect to the president, in march of 2016 you said the potential for a donald trump presidency, i hope we will not face this evil i'm wondering if after spending time with the president, you have changed your mind or if you're of the same mind. >> i wish i knew that before my speech a u.s. judge blocked president trump's latest attempt to impose travel restrictions on citizens from eight countries. it's the latest setback for the

trump administration in a long-running legal battle. the restrictions would have taken effect this week let's get the view from n bshbce lawrence in washington this is the third time the administration is trying to impose the travel ban. do you think they'll be lucky this time? >> not in this case. the hawaii federal judge threw out the ban ten hours before it was set to take effect the judge saying it suffered from the same maladies as the original travel ban. the trump administration saying this ban was a lessons learned from the first one in fact it asked for a higher standard of information from foreign governments on the person traveling to make sure they actually who they say they are. the judge didn't buy it, saying there was a lack of evidence when talking about if that person coming into the country would be harmful to the united states the judge also saying that this travel ban discriminates against

nationalities. this does not affect people who are banned coming from north korea and venezuela. it is the other countries that are involved in the travel ban the trump administration says that this judge has severely impacted the president's ability to keep america safe and our borders secure carolyn? >> the rule big the hawaiian federal judge, do you think that will take the whole travel ban back to the supreme court? essentially that's where the second travel ban still is >> you know, and it could. the supreme court could choose to hear it they might choose to pass on it, which would leave the current ban of the ban in place, or they could wait and deal with it in another session. it's something that the court -- you never know what the court will do. now we have a full supreme court. you may remember that president trump appointed the last supreme court justice, so that could be an indication that it might go in his favor if they do take the

case still you never know what the supreme court is going to do and the president has vowed to continue to tweak these travel bans to get them in place. even if it does get overturned, you can expect the trump administration to come back with another one with different language >> edward, thank you very much for your perspective edward lawrence from nbc news. let's talk about oil. kurdish forces surrendered more towns in iraq after abandoning kirkuk to baghdad troops the collapse of peshmerga fighters allowed forces to recapture the towns with no resistance iraq's prime minister called for dialogue with kurdish leaders under the constitution baghdad is looking to double kirkuk's output to more than 1 million barrels per day and asked bp to develop the city's oil fields that it recaptured. we're seeing that bit of a premium in the oil prices. wti at 52.04

brent crude at 5 8.25. ilitia groups say they have defeated ice ka isis in raqqah. an operation is underway to clear the city from mines before a formal declaration is made richard engel has the story. >> reporter: today the black isis flag was replaced by the banner of u.s.-backed forces in the city of raqqah isis filmed itself celebrating when it rolled into raqqah three years ago. today the table was turned u.s.-backed forces in the same spot [ cheers ] there was some public cheering, too, but most people in this battered city are long gone. this was perhaps the most feared place on earth with frequent public executions. it was a base for isis to plot

terrorist attacks including, intelligence services say, the attack on the bataclan theater in paris and the istanbul airport as well as to hold and murder hostages including american james foley. the city was freed by mostly kurdish forces helped by u.s. special ops and coalition air strikes. now with the loss of raqqah and the iraqi city of mosul this summer, isis' territory has shrunk from the size of virginia to a few scattered areas >> isis still maintains an ability to launch smaller scale terrorist attacks. but i think their future as a large-scale fighting force will largely end with the fall of raqqah the qatari foreign minister fold as soon told cnbc the blockade of his country is hurting its fight

against isis however he says he is ready for dialogue nancy hungerford spoke to the qatari foreign minister and she joins us from singapore. is the other side ready for dialogue, too? >> that's certainly the big question ready for dialogue is one thing, but whether or not the two sides, the many sides in this disagreement are ready to see eye to eye, that seems uncertain to me. when i spoke to the qatar foreign minister, he seemed to suggest there was a big divide over the crucial issue, which is saudi arabia saying qatar is still funding terrorism and extremist causes qatar has denied that, that they continue to do so. they think the rift is a political grab by saudi arabia in the region. that's where we stand. when it comes to where we go from here, there are reports that this blockade could escalate, that at one stage

there was the threat of saudi arabia, the uae looking at an invasion or regime change. i had the chance to speak to the foreign minister of qatar and asked him whether regime change was a real risk. listen to what he had to say >> we see that their offices, government off fris taices are g about regime change, talking about protesting and inciting people to protest against their government it's about regime change if we see a country bringing back the dark ages of tribes and putting them together in order to create pressure on a connected tribe to them in qatar, that's -- it means they want to destabilize the country. their behavior, as i mentioned, is just showing they're not willing for a solution they are into escalation they are into thinking about rera je

regime change. >> he does think saudi arabia was looking at regime change, and then when it comes to the issues of demands saudi arabia has put on qatar, one of the issues is its relationship with iran we're days after u.s. president donald trump laid out some of his own concerns with iran, qatar considers the u.s. a close ally in the effort when it comes to mediating the dispute in the region i asked the qatar foreign minister when it comes to the question of iran, whether or not the united states expressed their own concerns to qatar about their own relationship with iran. >> there's no support to iran. the qatar and iran relationship has been consistent. we have differences. we are opponents in what's happening in syria we are opponents to what's happening in yemen we are opponents to what's happening in iraq. and when we have adversities on

those different political battles, we are -- we have been the front-runner and we have been at front line of syria we have been the ones still from the beginning and we are still the lead in the region, which is vocal and advocates the regime there is no -- nothing changed about our policy u.s., they have their own policy towards iran, which is representing for them, we understand but the u.s. is miles away from iran we are a neighbor and border iran after this blockade f we have just one pathway from the north to iran, and the three sides, east, west, south is blockaded just because of those blockading

nations decided to isolate my country and to have a siege, how can i assure the food supply for my country how can i assure the medicine supply for my country? there are things forcing me to increase my bilateral tie with them in fact, the ties between the gcc and iran, as a group, 96% of this bilateral trade is between the emirates and iran. and qatar, in the 4%, is ranked number four. so we are fifth -- the fifth trade partner among the gulf countries, and the fourth from the 4% which doesn't result mor than $15 million. so what kind of special relationship between qatar and iran >> so why is saudi arabia making iran a big part of the issue >> they -- since the start of the crisis, they've been talking about iran they've been talking about

everything they believe that -- that might legit ma ttiimatize sympathy they don't want to appear to the western countries that they did this they just wanted to hijack the country policy and keep it under it's guardianship which is totally unacceptable they want just to show that we are doing this for the sake of the region and security, while undermining the region of security >> qatari foreign minister al thani insisting saudi arabia is undermining stability in the region so the desire to find a resolution to this dispute is certainly there, but the messages from the parties involved still seem very far apart. back to you. >> nancy, thank you very much for that still ahead, banking beats

we'll break down goldman sachs and morgan stanley's third quarter numbers after this short break.

president trump is expected to make a decision on the next chair of the federal reserve in early november speaking at a press conference at the white house, trump said he has narrowed the search down to five candidates including incumbent chair janet yellen current fed board member jerome powell is leading the race with 38%, that's according to the predicted betting market when asked what he thought of the candidates, president trump said "honestly, i like them all. i'm guessing that will be a last-minute decision both morgan stanley and goldman sachs beat expectations with third quarter results as revenue from investment banking outperformed with trading remaining stagnant, goldman sachs continues to have beaten

q3 expectations. let's kick things off with goldman sachs, we got a much better than expected drop of 27%, but i'm reading an article, the ft overnight saying goldman sachs is in an identity crisis, because it will never go back to the heydays of generating huge income through fixed income revenue and trading. agree or disagree with that. >> we disagree we think there's a different customer base when you look at goldman sachs. they have institutional investors, hedge funds the interest rates had gone through a period of sharply rising the first of this year. their yield investors, then the yields drop out from under them. then they start to recalibrate, they think are we right? how will the fed move?

will rates generally move higher they had a waiting period. at the end of the third quarter, rates went back up you had a path of what direction the fed was going. the fed reassured everyone they would raise rates again that created more certainty that pushed the yield investors back into the game then you saw goldman sachs doing better than what was expected. we think it's much more of a customer concentration issue than a business model issue. >> at this point banks continue to rally because we saw that back up in yield and we are sealing the hopes for tax reform if one of these two factors does not materialize, can the rally in financials continue >> it can. what happens on the ten-year treasury has little impact on what happens in the bank's profitability. the catalyst for fundamental improvement are in place we saw this summer with the

c-car is one we had over 40% increase in share repurchase plans as we move into the -- this was the first quarter to see that. secondly is rates are generally moving higher, about 50 points higher this year than last year. as we get into 2018, we think they'll be 50 basis points higher than this year. that helps banks recreate profitability from their deposit base lastly, we have a stable economy and credit costs will be sustained at the low levels. those three things, we think, are the combination of really fundabilitiy afundamental improvement. >> very briefly, about 20 or 30 seconds left, your favorite play when it comes to the banking sector is the regional banks, not the big banks. why? >> they benefit from those three things the most. we have a couple, like

huntington that we looked at here, that because of the worry investors have had from auto and that credit, that's not materialize nothing anythimaterl izing into anything bigger than a blip on the screen, so we think those trades will get in line with the group and they'll have outperformance ahead of them >> thank you very much for that marty mosby of vining sparks some flashes from akzo nobel, it expects fourth quarter trading significantly better than previous years after disappointing earnings for the third quarter. i'm carolin roth, "worldwide exchange" is up next these birds once affected by oil

are heading back home. thanks to dawn, rescue workers only trust dawn, because it's tough on grease yet gentle. i am home, i am home, i am home

market milestone the dow touches 23,000 for the first time ever and it looks poised to crack that high again today. your trading day set up straight ahead. deal or no deal. new signs of life fora bipartisan healthcare agreement. we have the latest from washington. and china's future we'll head to beijing where one of the most important global political events is underway it's wednesday, october 18, 2017 "worldwide exchange" begins right now. ♪ good morning welcome to