hello welcome to "street signs." i'm carolin roth these are your headlines european equities head further into the red as the hang seng takes a sharp turn lower. investors turn cold on unilever the consumer goods group posts a big top line miss in the third quarter blaming bad weather for weak ice cream sales time is up catalan president carles puigdemont once again does not clarify if he's declaring independence from spain, failing

to meet madrid's deadline but reiterating his call for dialogue good morning it is thursday morning thank you once again for tuning in to "street signs. we are one hour into the trading session, what we have seen unfold in the markets is interesting. the hang seng off by 1.7%. no one knows the reason for that the stoxx 600 has taken a like lower, off by 1.73%. as soon as we know more about the underlying reasons, we'll tell you about it. maybe tweet in if you have a clue as to what is going on. we have some chinese data out which is more or less in line with expectations. when it comes to europe, we had plenty of earnings, and some were mixed we had disappointments from

s.a.p., unilever, nestle let's tell you what the european markets are doing. we have the ftse mib off by 0.8% ftse 100 off by 0.2. the xetra dax now off its recent record highs, back below the 13,000 level off by 1% and of course all eyes on the ibex 35, this as the catalan leader carles puigdemont has reiterated his call for dialogue the deadline was now it was 10:00 cet on thursday that was the deadline for him to retract this ambiguous declaration of independence made last week. the catalan leader says he might formally declare independence if madrid refuses dialogue, and the spanish central government has refused to negotiate the secession of catalonia over the

last couple of weeks since that controversial referendum on october 1st. the following things are likely to happen. spain is poised to strip catalonia of some autonomy that would happen by invoking article 155 of the constitution which has, by the way, never been used before so we're very much in unchartered territory now. the ibex 35, once again, close to session lows off by 0.9%. a spanish government spokesman will make an official statement at 10:30 cet on catalonia. we'll have that for you live on this show. want to show you what's happening with the euro/dollar it's resilient to what's going on euro/dollar changing hands at 1.18 also want to show you the spanish banking sector there you go seeing banco sabadell off by 11%.

declines across the board. and let's get back to earnings news. nestle's forecasting a drop in operating margins of 40 to 60 basis points due to higher restructuring costs as they pivot towards a healthier brand portfolio. sales were below expectations, but the swiss foods group says the overhaul is progressing faster than expected at a cost of 1 billion swiss francs this year unilever shares are trading lower after the group missed third quarter sales estimates. the company blamed bad weather in europe and natural disasters in the americas for the figures. look at the shares, now off by 3.4% unilever added that while conditions in developed markets remain challenging, it was seeing signs of

emerging markets. let's kick things off with unilever we like to blame it on the weatherman, but to what extent is the changing consumer habits and the change in the structural dynamics the key factor here for the slowdown >>good morning yes. there's definitely two factors at work here weaker weather in europe did hurt ice cream, we had a couple good years in the u.s. in particular we saw the hurricanes hitting florida and texas. those are contributing factors however in the u.s. there's been the emergence of a competitor, halo top which has taken market share by 5% with a low calorie, high protein ice cream fast changing consumer preferences in other categories are having more local, nimble, agile competitors. what is unilever doing with this

after the craft heikraft heinz said we are getting rid of the spreads business he said three or four bids are coming in. are they on the right track? do you want the company to accelerate their strategy about turning around the business and offsetting some weakness >> so, the removal of the spreads from the portfolio will actually increase top line growth a little bit. you'll see tens of basis points coming back into top line growth unilever's other approach is to add to the portfolio they've done a series of acquisitions recently, roughly 8 or so within the last year, adding faster growth, personal care products in particular. a combination of portfolio change in and out is what's required here. more focus on personal care, more focus on agile, nimble innovations that the consumer wants in the right channels. >> similar story with nestle

nestle has also been under pressure from the activist investor third point we saw the investor day where nestle announced this margin target which is lower than what third point wanted i would argue nestle is doing what third point and what the market want them to do are they doing it quickly enough >> i would agree i think they are doing what the market wants them to do. the pace of change at nestle is always going to be slower. >> because they're so big. >> because they're so big. they're also not as far along the process of portfolio change that unilever is so likely you will see more things coming out, ala confectionary in the u.s >> hershey is the key bidder at this point do you think it will go through by the end of the year >> by the end of the year, you won't see a completed sale but maybe significant offers made. >> so we've got this margin decline. this is the trading margin that is expected to decline over the

next couple of months. ostensibly it's a one-off because of restructuring costs the underlying margin should increase by 20 basis points. do you welcome this margin decline? it leads to quicker restructuring or are you worried about this >> we've been calling for increasing restructuring for some time to accelerate the pace of change on margin and top line we do welcome the step up in the restructuring charges. 20 basis points, an underlying operating margin improvement is not a big number >> it's not. >> it's less than you're seeing at unilever, which will do mo00. >> those are a little bold and ambitious, would you agree they got questions on whether the margin expansion is too much >> robert, what do we do with the shares back in july and august you said

unilever is a hold, nestle is a sell how have you changed your ratings on the stocks? >> we have not changed ratings at this point. unilever is presenting a little bit better value you will get more earnings growth i think the pace of change is very well reflected in the share price. >> robert, thank you very much for that in other earnings news, s.a.p. raised its guidance despite posting slower revenue growth in the third quarter. core profits were also short of expectations despite those figures the german technology company raised its full year outlook saying its confident it can meet financial targets. earlier we spoke to the ceo of s.a.p. and asked about his expectations on the company's growth >> we have grown the cloud 30% year-on-year and in q3 we grew it 27% year-on-year today we raised our guidance for the company with the clear

commitment that the cloud will grow 30% or more on a year over year basis so, the company is beautifully positioned we couldn't be more confident in the cloud. and one nuance that you might be interested in, all of our growth in the cloud is organic. as opposed to the competition which is grown through acquisition, which is why we're gaining market share in the cloud each quarter >> tele2 shares have hit the top of the stoxx 600 after raising guidance on the back of forecasts beating third quarter profit they will bring forward their dividend review and could raise the payout earlier than expected shares up by 6%. the world's second largest retailer, carrefour reported third quarter revenues ahead of analysts expectations. france was the weakest market with sales falling 3% year-on-year the decline was offset by healthy uptick in latin america.

publicis is seeing stronger growth as they posted a 1.2% rise in third quarter organic sales growth it said the environment for clients was still challenging. staying in france, pernod has had a better than expected rise in sales bolstered by stronger demand in china and the u.s. but the market environment the spiritsmaker says is uncertain e-mail the show, the address is streetsignseurope@cnbc.com you can also find us on twitter, streetsignseurope@cnbc, and tweet me at @carolincnbc. coming up, as china's communist party congress continues, gdp figures show the economy is slowing a tiny bit. we'll be live from beijing after this short break ♪ can i kick it? ♪ yes you can

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the stability of its fx market fed rate hikes won't shake the stability of cross-border capital flows, adding that it expects obvious weakening of one weigh expectations of the yuan's exchange rate. want to show you what's happening with the hang seng not related to what the fx regulator has said, but interesting nonetheless, down by 1 1.76%. our chart might be delayed by a bit. this was because we saw big decline in the property developers the data from china overnight was not all that bad roughly in line with expectations especially when it game to the gdp print. 6.8% china's industrial output rose by 6.6%. retail sales outperformed with investment growth eased more than expected. property sales fell for the first time in over two years maybe it's the data, the devil

in the detail that caused the sale, but at this point it remains to be seen. back to the headline number, china's gdp number slowed to to 6.8%. the figure puts the economy on target to exceed its full-year target of around 6.5% providing a boost for president xi jinping as the communist party congress continues. eunice yoon is still at that communist party congress she joins us now i guess no surprise that we're seeing a slowdown when it comes to the third quarter gdp number. that was well engineered, wasn't it >> very much expected that it would come in at 6.8%, and this was a bit of a slowdown from the previous quarter because authorities have been trying to dampen down some risks within the property market as well as

the debt we've been seeing here and the economy. the debt has been subject for today by various officials, including the central bank governor he was speaking on the sidelines at the party congress. he said household debt is rising too quickly. he also mentioned corporate debt, saying that corporate debt levels are relatively high he also had a warning of a sudden collapse in asset prices if the government did not properly tackle the debt and currency pressures what was interesting about his comments, they are generally in contrast to the views of many chinese officials. president xi yesterday during his speech had been focused very much on how china's economy was going to get better and better there were challenges, but he also said the economy was going to become much more open and just in the past several days we heard similar comments

from another source where he was taking a different tact, saying in order to have an open economy, that you couldn't have so many restrictions on your foreign currency controls. so he was arguing that the timing would be -- is now really, and that the opportunity must be seized to push through some of these reforms, especially in the final sector just to give you background on the central bank governor, he's known to be a reform-minded bank governor, somebody who in terms of international circles is popular. he's been in place for 15 years. there's been a lot of speculation that he will be retiring he did confirm that he was going to be retiring soon. some people have been saying it could be this year he said next year. a reporter asked him about it. he said whatever it is, it will be sometime soon so at this stage there's quite a

bit of speculation also as to who is going to replace him. there are two or three other names out there. but generally what people are hoping to see in international circles is that there's going to be some continuity with his more reform-minded approach and his hoech hopes to make changes within the financial sector as well as with the currency >> within the pboc there still firsts the problem of local government debt. that issue has not gone away, and it's a point of contention for many, foreign and local investors. do you think that would be tackled? is that at the top of the priority list? >> well, it was atop of the priority list for the governor the governor actually had also mentioned the -- that the debt has been -- he said disguised

within the local government, needed also to be addressed. it's really just quite striking at how he's been putting up all of these red flags and really warning the current administration about the dangers of debt and reminding everybody how important it is to be able to make these types of financial reforms. >> eunice, thank you very much for that wrap up still looking ahead, the prime minister of singapore will speak to our colleague, you can see that interview at midnight tonight. back to the european equity markets, show you what's happening one hour and 20 minutes into the trading seg we have turned quite a bit lower. this may have something to do with the selloff we've seen happening on the hang seng and may have something to do with the catalonia news, the deadline has passed, and we saw no

compromise from either side. we will have to wait to see what happens. the stocxx 600 off by 0.6% it is off the session lows let me show you the european markets, most of them in the red. xetra dax off by 0.6%, well off the recent record highs. the ibex 35 off by almost 1%, 10,178 points as the stalemate between barcelona and madrid continues. i also want to show you what's happening with the yield picture in europe. the german government bond yield has dropped to a low, 37 basis points on the charts, still seeing a print of 38 basis points after spain says it will proceed with probably the invoking of article 155. spanish bond yields have turned flat and have given up earlier falls. now trading at 1.643 now, let's get back to this

story of catalonia willem marks joins us from brussels where he's been covering the summit. catalonia is not on the agenda, but i guess everyone is talking about what lies ahead. what are the next steps? >> all we know is that in the next few minutes, there will be a statement from the spanish central government, they said they will be having an emergency cabinet meeting with mariano rajoy leading that one, we assume though he is expected here later today. decisions will be made over the course of the weekend involving the cabinet and the government in terms of what the madrid government will do in terms of measures to strip catalonia from some of its powers carles puigdemont talked about the referendum they had on the 1st of october, the fact that the parliament on the 10th had said that that referendum was binding. the declaration he made, seemingly no clarification

he was required to make that to madrid on whether he officially declared independence or suspended it so it seems like we'll get a statement from the spanish government as to what actions they propose to make when it comes to invoking article 155. the process is complicated that then will go to the spanish senate, which could take a couple days to a few weeks so a lot of movement parts here. it's on mariano rajoy's plate now. he will have to decide which measures he will try to get passed by the senate, ratified in the senate, and those will be enacted in catalonia it doesn't seem like the catalans will back down they said yesterday in a cabinet meeting that they would automatically declare independence, unilaterally if the spanish government declares 155. a lot of moving parts. >> is there still an opportunity to salvage this opportunity and for it not to lead to further social unrest and the actual

invoking of article 155? do you think either side would actually back down or are the two so entrenched in their positions that this will come to a head >> well, i've had a series of conversations with people from different political parties, many of them meps in brussels from across the spanish political spectrum they said the easiest solution for both sides that saves face would be more fresh regional elections in catalonia that's what something carles puigdemont within his power could call it seems like he didn't want to do that before this deadline which has now passed it's a question of whether mariano rajoy will force elections on catalonia they may not take place until late their year or happen next year it would be a way for him to push the political pressure down the road, hope there are more political actions if pug spigdet

is no longer the president, that is a slow step and other measures may be made by madrid, whether that includes funding, taking over the police force, that would be faster than the dissolution of the local parliament >> what does it do to the s stability of the central government in madrid mr. rajoy has been leading a minority government, he needed support from the smaller parties so desperately if he goes ahead with a heavy-handed approach, how difficult will it be for him to do simple things like passing a budget and upholding very solid growth rate? we've seen the growth rate estimates already coming down. >> just a few minutes ago i was talking to one of the meps here. she was previously the parliament of the basque party.

one of his other partners has backed him to the hilt on invoking article 155 this lady said if the basque saw madrid being too strong in charging 155, they are focused on their interests in that coalition. if it seemed to infringe on peoples human rights, she indicated that some parties might back away. the coalition could collapse there could be challenges passing the budget down the road >> thank you very much for that. we'll catch up with you in a few minutes. want to show you what euro/dollar is doing as a result of this continued deadlock over catalonia. we have the euro/dollar turning slightly negative, not a huge reaction to the headlines coming out of spain

117.82, we're off just modestly on the day we will leave with you live pictures of barcelona as we wait for the spanish government to make that statement. that's expected to come in about four to five minutes time. will they officially invoke article 155? that's the key question. what exactly will the process look like as we are now in unchartered territory. zar: one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor.

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welcome back to "street signs. i'm carolin roth these are your headlines any minute there could be word from madrid as carles puigdemont has failed to clarify whether he is declaring independence the hang seng has turned down

nearly 2%. investors turn cold on unilever the consumer goods group posts a big top line miss in the third quarter blaming bad weather for weak ice cream sales all right. quick look at u.s. futures, if you're just joining us no surprise really given the tone in global markets over the last couple hours, expecting a move to the down side. the dow jones seen off by 80 points after rising 0.7% yesterday, or 160 points another record close for the dow. the s&p and nasdaq, ibm propelling the dow to its first close above 23,000 quite ironic or telling this comes roughly 30 years, exactly 30 years after the big flash crash or the big crash on wall street called black monday the s&p 500 seen off by 11 points the nasdaq off by 43

we continue the earnings parade today. earnings also front and center in europe. some have been disappointing among them, s.a.p., unilever, but the market is not focusing too much on that but focusing on the risk-off moves and what we've seen on the hang seng, which dropped nearly 2% at the close. the ibex 35 off by 0.9%. the catalan standoff, it will not be solved, it seemed, because the deadline has passed. the deadline was 10:00 cet today for the catalan leader to retract his declaration of independence made last week. it has not been retracted. so it seems like both sides, barcelona and madrid are still on a collision course. let's look at how the fx markets are reacting not a huge deal. the euro/dollar is lower, but only ever so marginally off by

0.1% changing hands at 1.1784 the dollar has been supported by higher yields to the tune of 2.34% for the ten-year in the u.s. and that was also lifted by hopes that we'll get the confirmation of a fed chairman pretty soon. not a whole lot of movement when it comes to the yen, given that we're going into the government elections this weekend let's get back to our headline and our top story the spanish government is due to release a statement about the situation in catalonia after the region's leader failed to clarify whether he has declared independence we are stillwaiting for that statement. should be out any second now in the meantime, out to willem marx who is still in brussels. what would you expect from that statement? >> we've already seen something write than we just had come through from the government talking about the fact that they will be starting the administrative procedures involved in article 155.

that will then be down to the various parties to decide on what the measures are. they will have a cabinet meeting this weekend led by rajoy who we expect in brussels later today i'm joined by a member of the erc, one of the oldest cat lane movements, pro-independence movements. you have seen this statement now. what's your reaction to it >> we're asking for dialogue, for a chance for negotiations, even mediation, what we get as a response is more threats the implementation of article 155 for the first time ever, that might imply the suspension of our government. that's not what we expected -- >> not what you expected or what you expect the >> no, we made room for dialogue, not threats. >> but one of the criticisms of puigdemont over the last week in particular is that he's seeking confrontation. he might not acknowledge it, but

he's seeking escalation. he wants to have confrontation with the central government, this is what he'll get do you think there's any truth in that? >> no, i don't think that's true he could have declared and implemented right after the declaration. instead of that he decided together with the majority in the catalan parliament to give a period of two months time to try to practice dialogue we have been seeking this for the last year, not for the last days or months for the last years from madrid the answer has always been no, no, you have to comply with the constitution you cannot decide your political future so that's not dialogue >> last night reuters reported that catalan leadership, catalan close advisers around puigdemont said that if there was this

envocatienv invocation of 155 that there will be a unilateral declaration of independence. do you expect that to happen there was letter this morning from the catalan president saying if you go ahead with article 155, the catalan parliament might decide to lift the suspension on the declaration of independence. it's written in a letter >> you understand as a member of one of the largest events in catalonia, that the catalan assembly will meet at some point to lift that suspension? >> i think that might happen i think it's now one of the only options that we have we have a mandate. democratic mandate from the referendum on the 1st of october. before that, we already had the mandate to go ahead with the right to decide of the catalan people so, we are -- we have a lot of legitimacy to go ahead, not only with the declaration, but also the proclamation of

independence people decided by voting on the 1st of october to vote for independence we have to refekt and immspect n this mandate >> is there any political solution that will allow mr. puigdemont to move away from declaration? would it involve regional elections in catalonia >> regional elections, why that wouldn't be a solution. we already had elections two years ago. these elections were already about independence >> but it might be a way of buying more time for dialogue, don't you think? >> even more time? we already said that we're ready for dialogue, but of course we've seen, you know, limits >> i think the reason that members say this might be an option because it may be different actors to the forefront, if it wasn't someone like mr. puigdemont, somebody

madrid feels more comfortable with negotiations. >> they have said they reject dialogue they don't want to have conversations over the results of the referendum last october 1st. they don't want to talk about the possibility of implementing our right to decide. so the ones for dialogue are the referendum parties, not madrid. we asked many times for this dialogue the response is 155. we have political prisoners now in madrid. catalan grassroots movement leaders are in jail because they organized peaceful demonstrations, peaceful demonstrations >> they have not been sentenced yet. they are being held as part of the -- >> they are being held in a primitive way, without bail. >> without bail. >> in jail, accused of sedition,

that means they asked people to demonstrate in a not peaceful way. that's not true at all >> the big question, you said it may be that the catalan parliament will vote on suspending or lifting the suspension from the declaration of independence, saying the declaration of independence is active now really, what does happen next? does it depend on what measures rajoy tries to put to the spanish senate for 155 >> it's difficult to foresee what will happen and what will be the next steps. we have to see the reaction of the spanish government we have to see what 155 implies. nobody knows there's no precedent the article is written in the constitution in general terms. we have to wait and see what the senate approves. >> the question for people watching this outside spain, it's unprecedented situation it's a very complicated one in terms of the procedures. at this point, the government will sit down, it seems, over

the weekend and decide what measures they want to propose to the senate the spanish senate, controlled essentially by rajoy's government in terms of the pa y parties there, will debate those messages some voices may say that's too extreme or this should be harsher, but one expect ts the spanish senate will ratify those measures that could take weeks. >> nobody knows. >> but presumably f it does take longer than a couple of days, if it takes longer than a week, again t leashgs again, it leaves room for dialogue if during that process catalan leadership said, look, here's a proposal we have, will you accept that, that entire process, while it's still in the senate, could be halted. >> it's clear this process will take some time some days. within these days i think and i hope there's still a chance for dialogue >> but to make that dialogue

possible, clearly madrid has said independence has to be off the table, we have to sit down and talk with you. do you believe the catalan leadership will be willing to say it's off the table >> president puigdemont said we want dialogue without preconditions. >> madrid said we want dialogue with conditions. how do you find the middle ground >> now it's time for politics. >> what could be the middle ground >> i think we have to take into account that there was a referendum, there was a result, and we have to see how, when, and by which means we implement that result. but if we say the president said -- the catalan president said there's no preconditions to this dialogue, we can sit and talk about everything. that's the offer >> so you're saying the only way through this is for madrid to say no preconditions as well >> to say, okay, we'll have a bilateral meeting between

catalan and the spanish representatives. let's analyze the situation, let's talk about possible ways out of this complex situation, and that would imply different proposals, different solutions but we never heard a solution, possible solution coming from madrid never. >> you're an mep, you live in brussels mariano rajoy, one expects s coming for the leader summit later today. would you like there to be pressure from other european leaders on him to start those conversations, bilateral conversations? >> i would like to see it, it's also in the interest of the european union to put this pressure on the spanish government to say to mr. rajoy, stop this strategy of repression do not apply article 155 please stop this sit down around the table and talk make politics politics >> i suppose we'll see whether

that will happen over the next day or so. back to you. >> thank you very much for that. tough line of questioning there. well done. want to bring you back to the government statement in response to the letter from carles puigdemont, again, we got that government statement out a few minutes ago. the highlights once again, the government of spain has verified at 10:00 a.m. this morning the last deadline the refusal of the president of -- the leader of catalonia to comply with the request sent to him on october 11th in which he was asked to record clearly and precisely if any authority of catalonia proclaimed the independence of that autonomous community and was urged to restore the constitutional order the government of spain will continue with the procedures provided for in article 155 of the constitution to restore legality in the self-government of catalonia as willem pointed out, next

saturday the council of ministers, based on this statement, will be meeting in an extraordinary forum it will approve the measure that will raise the senate in order to protect general interests of spaniards including the citizens of catalonia and restore constitutional order in the autonomous community those are the first few lines of that official statement coming from the government. as willem pointed out, this might be quite a protracted process over the next couple days and weeks want to show you the reaction from the ibex 35 down by 1% close to session lows as we see the collision course between barcelona and madrid continue. when it comes to the european equity markets, they're under water. the ftse 100 off by 0.3% the xetra dax down by 0.5% a couple disappointing earnings

today from the likes of s.a.p. when it comes to the fx markets, the yaeuro/dollar at 1.1792. up ever so slightly. the biggest mover is the nld dollar, the kiwi dollar is off 1.7% against the u.s. dollar given the questions around the new government, the labour party given the mandate to run the government for the next few years. finally, a quick look at bond yields, they've been largely stable after an initial fall the ten-year spanish bond yield at 1.648%. coming up, we will again be live from barcelona, madrid, keeping you posted on the latest news out of spain.

okay actually, we will not go for a break. we will continue to listen in to this, this is the spanish government spokesman let's listen in for a bit. [ speaking foreign language

[ speaking foreign language ] obviously this is all in spanish. many of you might not be proficient in that language. i'm not either what i will tell you is that we are expecting this to be the official statement from the government in response to the letter from carles puigdemont, now that this deadline has passed at 10:00 a.m. this morning. so once again, the spanish government saying the catalan leader has refused to meet the demands, also saying the government will do everything in its power to restore legality and constitutional order as soon as possible to restore peaceful coexistence among citizens and to curb the economic deterioration that legal and security has been causing so far in catalonia a bit of background on all that economic uncertainty that we've been seeing, so far some 700 companies have exited the

catalan region to move to madrid or elsewhere because of this uncertain uncertainty. tourism revenues have fallen 15% this month madrid has already lowered the forecast for economic growth do keep in mind that spain is poster child of this recovery after the eurozone debt crisis back to willem marx standing by in brussels. your reaction to this? >> clearly this is something that we expected there was a specific deadline. the government has repeatedly said they wanted answers from the catalan authority. as to whether they had declared independence it can be no surprise to anyone that they are making a decision on 155 they will have this extraordinary meeting of the cabinet and hash out a plan to propose to the senate later down the road that could include things like the dissolution of the catalan regional assembly. that's something that the catalans repeatedly said they will not accept. how they will prevent that from

happening is not clear whether there is a long enough time lag for dialogue to start between now and then is not clear. it seems rajoy is taking this hard line, many expected him to take that. he does face a great deal of pressure from the far right and right of his own party whether he looked for a dialogue solution was always difficult for him given that he has to thread a fine line between those different sets of interests and he has pressure from ordinary people across spain as well about treating the catalans in a specific way so they do not feel they got away with behavior that the rest of spain considered unacceptable. >> thank you very much for that analysis we'll be back with you in a bit. stay tuned plenty more "street signs" after this short break for your heart...

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welcome back to the show u.s. treasury secretary steven mnuchin said the stock market will take a hit, that's if tax

reform is not passed in an interview for a political podcast, mnuchin warned of a rally reversal if the republicans bill fails >> is no question that the rally in the stock market has based into it us getting tax reform and tax cuts done. it has optimism on regulatory relief which they have begun to see. so i think to the extent we get the tax deal done, the stock market will go up higher, but there's no question in my mind, if we don't get it done, you will see a reversal of a significant amount of these gains. the white house says president trump is against a bipartisan deal to stabilize obamacare by restoring insurance subsidies. the presidentially seemed to be in favor of the agreement struck by republican lamar alexander and democrat patty murray, but an administration spokesperson

said trump does not like the deal in its current form ed lawrence is in washington with reaction from yesterday i guess there's a lot of consternation and confusion about his shifting stance. >> exactly a lot of confusion, especially since the president came out saying hewould like to see democrats come to the table and talk about healthcare, come together, work on a deal going forward that seems to be exactly what happened. both senator lamar alexander and senator patty murray said they worked for weeks to iron out this deal. within the deal is about 1$100 million in subsidies to keep the insurance premiums lower it also would relax some of the rules allowing states to get a waiver and manipulate the rules to tailor make the marketplace for their own state. the problem for the president is the subsidies. these concerned or through his white house spokesman he says the president does not want to

see direct payments to the insurance companies as subsidies. this is something democrats are dug in on. this is something they would like to see happen we're at an impasse here now there seems to be bipartisan support for a deal to go forward and stabilize the obamacare market, but the president saying it's not something he could support. they would need a super majority of 60 votes to override that if he does veto it. >> all right thank you so much for that appreciate it. want to bring you up to speed with some retail sales for the month of september look at the reaction in the currency markets sterling down across the board sterling/dollar 1.3151 off by 0.4% we saw a drop in retail sales to the tune of 0.8 % in september versus a decline of 0.1% being forecast this was quite a big miss when

it came to the top line and the third quarter seeing the worst rer fo performances when it comes to retail sales. theresa may is making a new offer to uk citizens living in britain. she released an open letter where she promises to make it as easy as possible for ex-pats to stay in the uk after britain she says a deal is in touching distance i'm not sure if that makes us reassured about our prospects, given i'm an ex-pat, but we'll have to see what happens to those of us not born here and do not have that citizenship. the dax off by 0.5%. the ibex off by 0.2% u.s. futures looking negative. that's it for today's show

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dow 23,000 the blue chip index closes above the milestone for the first time ever your trading day set up straight ahead. new this morning, china reveals its economic growth rate as the top political leaders gather to discuss the future and breaking news, catalonia's leader fails to drop a bid for independence, now spain looks ready to take action it's moving the market thursday october 19, 2017, "worldwide exchange" begins right now.