welcome to "street signs." these are your headlines support from strange places. european leaders back theresa may after her own parliament voted down her brexit plan meanwhile, deals on the transition period and trade still remain elusive [ inaudible and h&m delivers a weak quarter as foot traffic falls. bricks-and-mortar sales came in significantly below expectation

aerkst prompting the retailer to turn its focus online. shake-up in the skies. the airbus ceo, tom enders, announces his exit with the coo stepping down as well from troubled planemaker. and president trump says the disney/fox deal will be a great thing for jobs as ceo bob iger tells cnbc it's a consumer-friendly tie-up. >> there's risk associated, whether you look at the price or the regulatory side or whether you look at the complexity of integrating companies this size. that risk was well worth taking on good morning, everybody. it is friday tgif let's see how the picture is trading in europe this morning we had a bit of a weakness over in the u.s. trading session overnight. dow jones and s&p both ended the day lower after hitting intraday highs. still some concerns about the tax bill being passed in congress, but we'll talk a

little bit more about that later. and nikkei also did struggle in the overnight session, down despite strong manufacturing data the picture in europe is grim, stoxx 600 down after unusual trading. let's see what the picture is look ftse 100 down 0.14%, still below that 7500 mark xetra dax, cac, and they haven't done much after the ecb and meetings yesterday it hasn't helped the equity indices turn around here switching to sectors to see how the individual sectors are performing utilities posting a very strong day, up 1% travel and leisure up 0.2% the big story today, and we'll get into this in a little more detail, is in the retail sector down 1.8%. and of course, that was on back

of the h&m disappointing sales numbers and we'll get into that in a little more detail. technology still a laggard now, digital technology revenue at siemens rose 20% to over 5 billion euros in fiscal 2017 the company has also announced an increase in research and development spending now, annetta is in munich. what can you tell us about the deal >> reporter: well, thank you very much for telling already that the key elements here we have r&d spending going up with siemens trying to stay competitive but also to present innovations. we have in that room here, a room fool of innovations, such as an electric-powered cityliner, which is like a throne, but it could in the future be fully equipped by electric power essentially, you could then fly

without petrol or kerosene, as you call it in the industry. but to talk about that even more, i'm joined by the ceo of siemens. thank you very much for joining me. >> hi, thank you. >> it's the big innovation day at siemens talk us through the key issues and the key themes. >> it is a big innovation day. it's a big day for siemens that's the third time we're having it now. we have more than 300 people here it's customers, it's journalists, analysts, so, the whole world sl actually here we have 80 journalists from all over the world, so it's a big thing. the general theme of course is innovation, not only innovation in terms of technology but also innovation in terms of business models, how to go to market, how to structure company going forward, so quite an interesting program, which we have, so i'm very proud. >> yeah. r&d spending is going to be higher again next year is that kind of the new normal analysts and investors have to get used to in order to stay

competitive for a company like siemens? >> i wouldn't call it r&d spending it's investment into innovation. that's in essence what it is, and it's our responsibility to bring it from r&d costs to innovation outcome, right? of course, that gets up the r&d cost for sales but what it does is it improves your gross margin you spend more but you get gross margin because you grow faster and your products become more cost effective as they used to be. >> you're teaming one the likes of amazon. so, are you planning on kind of moving siemens away from your traditional, of course, technologies, into become more of a digitalized company then? >> i want this company to be successful also in the future and not last 170 years, but the next 20, 30, years as far as you can go today

i think this is also a new pattern of innovation. in the old days, you would have, you know, those nerves of technology sitting in their pools and trying to invent something and come out and say, hey, i know it and nobody else did. today you have a collaborative environment. we work with universities, work with customers, with suppliers, even sometimes with competitors, you know so this consumer type of collaborative approach we work together with amazon because they just happen today to have the best cloud platform. might be microsoft next year so we just need to take the best together and connect the dots and make a meaningful outcome and solution for our customers. >> yeah. that brings me to your company structure. you've said the conglomerate such as something from the past. you're more or less talking about a fleet of ship structure

for also siemens, planning to ipo. so, are there other sort of saves to come or potentially kind of restructurings >> yeah, i think what i really said was i'm a very firm believer that the days of the conglomerate of full nature is just over. the conglomerates had the benefit -- there was always good stuff or bad stuff so, mediocrity was the dominating element of conglomerates. and in a new digital age, the digitalization goes exactly after mediocres, which is even efficiency say look, you know, i don't want processes to be mediocre, i don't want customer benefits to be mediocre. i want them good and if the good ones prevail, the bad ones will go out of business that's been the model of amazon all along.

think about the book stores, right? this is what happens now in the industrial world and internet comes over to industrial world, there will be a massive change in the value chain paradigm will be shifted and business models will be changed. it's not a showkaser type of make myself unforgettable, it is about trying to get seat for the future and the way we try to invent a new sort of conglomerate is we look at the tainingle, which has the plan, which is a very, very powerful thing at siemens everybody knows siemens. we are the most reputable company in the world by forbes leaders in 65 countries. think about it, brand methods opens the door to our business but having said all that, our businesses need to be focused past these plays they need to be preferably better than the peer plays in that business, because otherwise, they cannot serve the

customer right and then to get this powerful brand, fleet of business, we have to have a command center which is the governance. the digital soft business in our digital factory needs to be governed differently than health care or building trains and mobility systems so we've got a big gap there to what the focus of the business is that's the concept. >> decentralized structure, right? >> exactly, which is being held together by the brand where recovery is a purpose and the purpose is the brand what does it do, right and a flexible government. a model of governance. >> okay. let's talk business. >> it is business. >> it is business, but really operational business. >> absolutely. >> europe is doing really great, at least if you look at the gross numbers. we have heard yesterday from the ecb that stellar growth, et

cetera so, how does it, like, factor through to real orders and the real economy >> first of all, we operate in 203 countries, so we like what we see in europe but you also have to be humble about the fact that today compare with what you would say the capital market language easy cops, right? nevertheless, i think draghi was courageous against a lot of resistance to really push for easy money and stimulate the economy. that's what we have. and i think factors like mr. macron being elected in france, and hopefully, germany's back in the stable political environment also, this is the encouragement that the political system is willing to adopt the future, global responsibility, and i think that makes companies feel good about the system, the ecosystem, and investing in

europe. >> let us talk one more time about 2018 so when you look at 2018, what do you think about that year where do you see challenges and what might be the major theme? >> you know, the future's always hard to predict, except in demographics, you know in 62 days next year like 61, but other than that, it's not that sim pell. i believe that the economic powers are well in place so if there is disturbance or uncertainties, it will probably reach out geopolitical environment, mainly south china sea, north korea that could have some sort of impact on customer confidence. but i believe for the most part, we see a rolling europe, a very, very powerful china, likely above 69%. so i believe '18 could be a stellar year for the global economy. >> thank you so much. >> absolutely. >> and have a good day here.

>> thank you. >> back to you a day full of innovations here at siemens and probably more to come, of course, also next year. >> annetta, thank you very much for that and bringing us the latest with the interview with joe kaeser, ceo of siemens we have live pictures of the eu summit roundtable you can see the eu leaders seem to be sitting down ahead of this important meeting, where it is expected they will give a formal ratification for the negotiations to proceed on the phase two, but of course, more on that later. back to one of our main stories. h&m shares have fallen to the bottom of the stoxx 400 dragged down by lower foot traffic the swedish retailer plans to close more stores than previously planned and looks to transition to a bigger online presence fourth-quarter sales were down, well below expectations. joining me is the senior editor

of wgsn. thank you for joining me this morning. i want to start by asking you why we're seeing such a disparity between the likes of indotex earnings which were strong and h&m, which are weak this morning, even with rather similar business models. >> so, one of the things h&m has been dragged down by is obviously the fact that it hasn't been able to completely do the integration of online versus offline they've been talking about it for a really long time they were both quite late to the online game, but arguably, indodex has a better model able to respond to the consumer, their demands much quicker h&m has struggled in that respect. they have a wider portfolio of brands they have to deal with. they've been launching new brands, and they have definitely let off a little bit of the steam on their core brand, which is h&m, and that's really

dragged down their overall sales. >> and what i see is they're extending their collaboration with alibaba and will look to sell on the online platform there. do you think that is the right strategy for them? >> i think it's an interesting strategy one of their sister brands, monkey, has already been selling on alibaba, so they've had some interaction with alibaba in china before they kind of know the business model. and they must have seen certain gains. it's obviously -- china's a difficult market h&m already has 500 stores there. i think it's a smart move for them to get on to a huge platform like alibaba, reach customers in different areas, in different regions that they probably wouldn't be able to with their own online presence so it's an interesting move. it's a big move. it's a high-profile move, which is something that obviously plays really well in retail. >> just taking a step back, what do you think differentiates in this environment the retailers that are going to flourish versus the retailers who are still going to continue to

struggle h&m were very late to get on to the online sales platform. will that be the key differentiating factor going forward in your view >> i think it's one of the key differentiating factors. i think it's, as with anything in retail, it's a lot to do with how you do things. so, like i said, i think indodex and h&m were both late they were both slightly late to the ongoiline game, but zara ha ramped up its online platform, they have very good online presence the visual appeal of the platform is arguably superior to h&m's own platform they're not like for like in terms of the customers that they're targeting. zara is a smaller, much more targeted brand than h&m itself is, but simple things like h&m has launched its loyalty club recently i think that's a great thick, but they haven't really pushed for it

they haven't really brought it to it the level of something like an asus premiere. how quickly do you respond to the market how quickly do you push out trends how quickly are you going to be able to sort of introduce newness into your stores i think those are really the things that are going to differentiate brands in the future. >> so, we have very strong uk retail sales numbers, and that was partially attributed to black friday sales, which is a new phenomenon in the uk and seems to be getting bigger every year, but what does that mean for overall margin profitability for these retailers? because they seem to be slashing costs and discounting sooner and earlier in the season. does that bode well for the sector >> my personal view on this is that i don't think it's a great move for fashion retailers margins are already quite low in fashion. i don't think it's a great move. however, it's reached a point where they feel like they have to participate, otherwise, they'd lose out on sales

i think the real way to deal with this is, because obviously, it's a chicken and egg situation. if you do it, if you don't do it, what do you do i think the real way to deal with it is to be strategic with your discounting don't blanket discount i think that's one of my key sort of messages to fashion retailers, don't blanket discounts. be really strategic with what you're putting into those discounts and how you're communicating them to your customers. if you're going to do it, be smart, because i don't think fashion retailers necessarily have the margins to play around with, especially retailers like h&m, which already operate on quite a set of high-volume model. so, for them, if they keep on slashing, i think it really would impact their profitability and their bottom line. >> just one last question. how is the holiday season shaping up what is the outlook over the next couple of weeks in terms of consumer spending habits expecting it to be a strong one. >> so, for fashion, i would say that holiday -- this year we've seen a little bit of a damp in

spend on fashion retail. i think that's just generally overall something that consumers are moving to bid. so they're choosing to spend on lifestyle, experiences, beauty, home, rather than actual fashion purchases. >> that's more of a millennial type thing, isn't it >> it is, yeah, but it really does have an impact on it. if you are a millennial, if you are like i don't really want to spend, i don't want to kind of buy into this fast fashion mentality, but also it does reflect on overall sort of spending because then you have grandparents not wanting to spend on their grandkids because their grandkids are like, i would rather just, if you donate to a charity maybe orlet's jus all do secret santa, not buy everybody gifts. so i think it does have a massive impact on consumer spending and fast fashion. >> and of course, it is christmas jumper day today and i saw in your note that there's been a rise in demand for christmas jumpers this season. >> there has i think that's one of the best messages to come out of it. >> indeed. thank you very much for that

senior editor of wgsn enstock. now, sticking with the retail sector. ferragano warned on its midterm targets. the italian company said it could not confirm its growth ambitions for 2017 to 2020, adding that it expects 2018 to be another year of transition. airbus has announced a management shake-up. ceo tom enders will not seek a new term when his contract ends in 2019. he had been at the head of airbus for 19 years now. the ceo is also stepping away, leaving in february of next year to be replaced by current airbus helicopter ceo glerm feury now, we've discussed plenty of things in the first segment of this show. e-mail us and get involved in

the conversation, streetsignseurope@cnbc.com and follow us on twitter twitter, @streetsignscnbc or tweet me directly. jean-claude juncker says the second phase of brexit talks will be a lot tougher. more when we come back your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall.

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welcome back to the show european leaders have arrived for day two of the eu summit, where they are set to formally approve trade talks with britain. the move comes after prime minister theresa may told her peers the uk is on course to deliver brexit, despite suffering a parliamentary blow to her withdrawal bill speaking in brussels, european commission president jean-claude juncker warned that the next phase of brexit talks will be trickier >> the process is that we have to formalize withdrawal. this will be put before the european parliament and before the house, and then we will start negotiations with relations as soon as possible. >> joining us set is the

executive director of european economics. so junker's warning that the next phase of negotiations will be a lot trickier. it took nine months for us to agree to the divorce bill. it allows six months to agree on everything from a transition to a trading agreement. do you think that's going to be achievable next year >> i don't think it should be that hard in principle it depends on the will of the participants to have a deal, which isn't entirely straightforward and there are a lot of moving parts, a lot of different eu players some difficulties for theresa may politically internally, so it's by no means certain, but i think we should be optimistic, particularly from the british side. >> he said they would have to finalize phase one before formally transitioning to phase two, in the sense that it can't just be a gentlemen's agreement -- >> that's wrong. it is a gentlemen's agreement. that's what it says on the deal, and that's not some kind of extra bit or an oversight. that was absolutely central to the deal and it wouldn't have

got through theresa may's party if it had been a formal deal. >> so what you're saysing what they've agreed in phase one isn't necessarily set in stone >> no, it's contingent on an overall deal and theresa may has said that many times in the house of commons and it would be completely impossible for her to backtrack now. >> what type of transitional deal do you think the uk government is going to work towards now? it's unclear. >> it's a little bit unclear and i've been asking them to be a bit more explicit about various things there they talk of an implementation period or a breaching period, as if what they're going to do is to agree, at least in principle. david davis talks of striking a trade deal, though they don't believe they'll sign it until after we've formally left. so they say they'd like to strike a trade deal by march and then have a period of implementation and honing the details of the trade deal during the transition period, so breaching between where you are today and where you would be at the end. that's one poblth and i don't think we should rule that out, but i think a slightly more

plausible idea is that we may find in many respects it's a standstill arrangement, but not all. so one type of standstill arrangement was you don't change nipping. de facto, you're a non voting member of the eu for a couple years. but you could also say we'll have a standstill in respect of affecting goods and services, so set the jurisdiction and the like, but withdraw from other eu products it's a standstill in respect for things you stam y in, but with drawl from other things and the government has to be more specific about what it wants to withdraw from. >> quick question. there were reports this morning that the uk has kept its top spot in the financial industry sector, and the city of london is something that everyone is keen to protect, given the importance of the financial services industry to the uk economy. what can be done to protect the financial services industry once brexit has occurred?

>> i don't think it needs much in the way of protection passporting wasn't central to the city being dominant before the passport came in in the mid- mid-2000s and it has more to do with globalization so i don't think the city needs protecting and i don't think the eu has any incentives to cut itself off from access to the city, so i don't think they'll be doing that. it's unsure what arrangement we'll have, whether it's a financial services specific arrangement, like the canadian financial services deal they have with the eu, or whether we'll have a regulatory equivalents arrangement. it's not clear exactly what we'll do, but i don't think we have to worry that the eu will choose to cut itself off from the city it's far too big and important to it. >> i'm afraid i'll have to stop it there thank you for your thoughts. that was the executive director of european economics. coming up on the show, the clock is ticking european financial institutions are readying for implementation

to transform the business of finance. we'll explain the impact in just a few moments.

i'm joumanna bercetche and these are your headlines support from strange places. european leaders back theresa may after her own parliament voted down her brexit plan. meanwhile, deals in the transition period and trade still remain elusive. and h&m delivers a weak quarter as foot traffic falls. bricks-and-mortar sales came in significantly below expectations, prompting the retailer to turn its focus online. shake-up in the skies. airbus ceo tom enders announces his exit with the coo stepping down as well from the troubled planemaker. and president trump says the disney/fox deal will be a great thing for jobs as disney's ceo, bob iger, tells cnbc it's a consumer-friendly tie-up. >> there is risk associated with this, whether you look at the price, whether you look at the regulatory side or the complexity of integrating companies this size. that risk was well worth taking

on all right, let's see how the picture is in trading this morning. and u.s. futures pointing to a strong open. s&p 500 seen to open seven points higher, dow jones up about 80 points, breaking with the disappointing trading session we got in yesterday's trading. and of course, there, there were lots of questions about whether or not the tax reform bill will get passed, and that's going to be a theme i think in the next couple weeks, but it looks as if the markets will open just a little bit stronger. let's see what the picture is in europe pretty grim across the board ftse 100 just below that flatline all posting declines, down 0.4% for germany. as we said, there hasn't been much in terms of a respite coming from the central bank comments we had yesterday. and let's just take a look at foreign exchange this morning. all eyes have been on the dollar

this week after the fmoc hiked rates, widely expected euro/dollar around the 1.18 mark, hasn't moved much and the european central bank decision has moved the needle dollar/yen slightly weaker cable trading around 1.450 it's only 18 days away after years of preparation and talk, method 2 will be implemented from january 3rd, regarded as one of the biggest financial changes in decades the rules will affect banks to fund managers to exchanges and retail investors it covers equity, fixed income, commodity and etf markets. it is intended to increase price transparen transparency, puts in place volume caps for dark pools and allow for tougher standards and customer management.

one of the key provisions is that it will split payments for analyst research and trade commission, severely atering the brokerage model. joining me, the global head of e-commerce at img and a partner from pwc i'd like to start with you, stefan let's take a step back these rules have been in the pipeline for a couple years now. what do you think the main changes are going to be? can you just spell them out in terms of specific segments of the market that are going to be affected >> yeah, so, it's the biggest change in ten years and big change on investor protection, transparency, pretrade on some instrument and posttrade transparency and research as well so it's all coming at the same time, and change on the buy side as well as sell side but also a big change for the markets. >> which parts of the markets do

you think most affected by it, from the buy side? are you looking at the way investors pay for information? on the sale side, is it going to have an impact on the research analyst outlook? what is your view there? >> i think the impacts might be staggered. the effort really to get compliance has been huge it touches all parts of the business but if you look at the market, mifid 1 was focused on equities and mifid 2 is income and derivatives, so the sort of illiquid end of the markets, huge, big bang market impacts on day one. then i think we'll see things, if you like, the distribution of funds could actually be slightly slower because some firms perhaps haven't done that target market assessman and given that to distributors yet, although there's an ongoing dialogue and there's a lot of work. it's just been a little bit slower than perhaps we'd like. >> some of these demands entail investing in new technology because some banks and institutions literally don't have the capacity to record all

of the data being transacted, et cetera and other people are saying that it creates very high barriers to entry to the market now because of those costs associated with technology do you think the advent of mifid 2 may create some inefficiencies in the market when it comes to trading? squr >> well, i think it could do, especially at the illiquid end as you said, there will be more price transparency, and therefore, from the best execution point of view, you should get better benefits and get some of those savings being passed on to investors so better from an investor point of view, but i think at the illiquid end, i think we could see some points where you may get trading sort of clog up a bit because that transparency, actually, people don't want to trade in as big a chunks as perhaps they used to before. >> stephane, are people in the financial institutions space concerned of creating illiquidity come january because it doesn't seem a lot of institutions are ready for the big onslaught of the change in regulations we're going to see. >> it seems that's the primary risk, how it's going to start in

two weeks' time. and the impact on liquidity in the market a lot of furniture market instruments are going to have to trade differently, so you have to go to a new trading venue if you don't sign up to those venues, they cannot trade in two weeks, so they have to be ready. if they are not there, we may see an impact in the market in the few few weeks. >> what happens if an institution is not ready grant, i think you say in your notes that the uk regulator has asked firms to disclose by the third of january if they're not aquipped what happened? are they just not allowed to trade? >> i think it's a huge call. i think by and large people will be ready for trading because people are focused on that, but the concern is investors sitting out of europe and coming into europe so there's been something called the lei and people are not applying if you don't have one, you can't trade, you're right, but i think

it's more thesecondary effects of the trading, which we don't know really is going to happen in terms of financial markets at the moment. >> can i ask about the general outlook from here? with europe, we seem to be piling on regulation after regulation, as you said, mifid 2 has been in discussion for many years, finally coming into play, while in the u.s., they're talking of repealing some of the legislation. do you think this puts europe in a less competitive spot when it comes to the financial industry just because the institutions here are being bogged down by so much of this regulation and the technology that is required to go along with it >> you know, it certainly increases the barriers to entry and i think the cost point will be interesting, because theoretically, more transparency should actually be better execution and better process for investors. but in terms of the equivalence of the u.s. versus europe, i think there are two streams. as a firm, we see a global trend to more transparency generally, whether in u.s. or asia. so i think there will be aspects repealed in the u.s., maybe something like the voelker rule,

which i'm less equipped to talk about than stephane, but in terms of transparency and price, and actually, some pension funds in the u.s. want that sort of research to lift, so from an investor point of view, they're not comfortable with the soft dollar type regime we have at the moment so i think you might actually see a bit of divergence of banks, some of the regulation in the u.s. >> stephane, do you think more transparency is a good thing for the market in terms of market return it's so difficult to make money and nowadays, the barriers to entry are extremely high there's so much transparency in everything everyone has access to the same amount of systems and it's removing the need for individuals, really being replaced by technology and computers. what does that mean for the returns of the financial -- >> i think it has changed through the years. we've been preparing for two, three years now and in the beginning, people say yes, more transparency will be good. then a year ago, they were all afraid to say too much transparency is bad for the market, because if you are a large asset manager and you have a large trade to make, too much

transparency will hurt you so, what is good about mifid 2 is, in fact, you can calibrate how much pretrade transparency can happen in the market, what instrument, liquid versus illiquid instruments so, that is what a positive sign is, potentially, this will help to see what is good versus what is dangerous to play in terms of large amount of transaction to be done. >> brilliant gentlemen, thank you very much for your time this morning that was stephane, global head of commerce and innovation for financial markets and grant lee, partner from pwc. if you're still miffed about the final deals of mifid 2, head to cnbc.com for an in-depth read-through now, the u.s. government has rolled back a key obama-era regulation that products an open internet the federal communications commission voted along party lines to dismantle the so-called net neutrality rules, a move many slay give control of the web to telecom and cable

companies. critics say the decision affects everything from streaming services like netflix to how quickly websites load and even to what websites you see nbc's jo ling kent has the details. >> equality over the internet is a right. >> reporter: high drama today, both outside and inside the fcc. >> on advice of security, we need to take a brief recess. >> reporter: a sudden evacuation moments before the vote to overhaul the way the internet is regulated. after an all clear, the controversial decision from commissioner ajit pai. >> the chair votes aye the item is adopted. >> reporter: with that vote, internet service providers like at&t, verizon, charter, and nbc parent company comcast, can slow down access to content from companies line netflix, hulu, and youtube, if those companies do not pay for faster service. internet providers could also route you to content they own. for consumers, that could mean higher prices or no access to the shows and websites you want.

also, the internet service providers could charge you more based on how much you use overall. is that about to happen? >> that fear is unfounded. prior to 2015, before these regulations were imposed, we had a free and open internet consumers benefit, entrepreneurs benefit. everybody in the internet economy is better off with a market-based approach. >> reporter: all four major internet providers responded today, saying their internet practices will stay the same >> hey, guys, it's dannie, and today -- >> reporter: but this youtube cooking star is worried about the future of her business. >> that's the gift of youtube and the platform we're on is that you can create this information and it's accessible to anybody who is wanting it. >> reporter: she's concerned her videos could end up in the slow lane and fewer people will be able to watch them. >> if we don't have an audience, we don't have a business it's that simple >> visit cnbc international's facebook page where you'll find this in-depth explainer on net neutrality and its pros and cons

♪ the deal is done disney has officially inked an agreement to buy the film, television, and international businesses from rupert murdoch's 21st century fox for $52.4 billion in stock the merger will give disney digital assets that will help it better compete against rivals like netflix and amazon. shares in both companies closed the u.s. session much higher on the news now, disney's ceo, bob iger-once again extend his tenure at the company to oversee the integration. speaking with our colleagues in the u.s., he noted the deal came with certain risks but said it was worth it. >> there's risk associated with this, whether you look at the price or whether you look at the regulatory side or the complexity of integrating companies this size. that risk was well worth taking on >> meanwhile, rupert murdoch said the deal will bring his focus back to news and sports. >> i think this is returning to our roots, which is news and

sports, and that's the chain of where people watch television these days i think sky knows this the news is rule sport, soccer's huge but the series, people watch them the time you put them up, but a lot of them, they stack them and watch them a week later, late at night or a year later, watch a whole series over a weekend. so then you've got, in fact, you've got huge companies joining this area now like amazon, facebook, apple, and netflix, of course, spending fortunes on making scripted programs. in more corporate news, general electric ceo john flannery says they made basic mistakes in its power business ge announced job cuts of 12,000 last week. speaking to cnbc, flannery said less complexity is better. >> biggest issues are really in one business, our power business, and we made basic mistakes there around size of the market, change in the mix to

renewables, and there's a chain reaction of that we built too much inventory thinking the market was going to be stronger. so, it was really a localized issue, and again, really not in the india market and other markets. so more focus is better. less complexity is better. but most of the company running well right now now, coming up on the show, republicans attempt to overhaul the u.s. tax code face questions as senators raise new concerns 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.

welcome back to "street signs. south african president jacob zuma is stepping down as anc leader his party will vote for his successor at a party conference starting tomorrow. now, chris bishop is in johannesburg chris, i just want to ask you, it seems like it's a binary moment for south africa in the sense that they have the choice to go with the status quo with zuma's ex-wife or for the opposition candidate president mr. ramifosa, so i thought you could give us a sense for how

close the race is in the first place and also what the ramifications of a ramifosa win would be for the politics going forwards >> reporter: well, actually, the main point here is that both the people you just mentioned, they're both on the same party, they're both looking for the same nomination to be the next president of the party as they go from jacob zuma and if they win here, they'll be put forward as the presidential candidate in 2019 to face what's likely to be very, very tough elections, indeed. the opposition's been growing in strength here. there's a lot of dissatisfaction with the ruling party. there's a lot of economic hard times here unemployment is something like 25% in this country. whoever takes over, the country's going to need to have a very tough program and that's one reason. i mean, the word on the ground is that silva ramifosa is likely

to win here. he's a better bet for business, is a little more pragmatic, most people think he's been a union leader he's been a lawyer he's been also a boardroom member, he's run mining companies here he knows how business works, and that's one of the things that people are looking to that maybe they can get a business head on the future of this country >> chris, thanks very much for that and for bringing us the latest from johannesburg. the new zealand dollar touched a high after the pension fund chief was named governor of the central bank it's been following a steady trend upward since a 17-month low in mid-november after a change of government new zealand's new prime minister is about halfway through her first 100 days in office speaking exclusively with matt taylor, she said the country will continue to pursue trade deals and that it's open for business. >> continue to pursue a

progressive approach to trade agenda and that will be our focus. one of the first things i had to do as a new prime minister was add a pick, renegotiate, of course, as other nations woul . we had a clear vision of what we wanted to gain and got some of the rough edges of the agreement off and get it to a place where the benefits were starting to outweigh some of the disadvantages of things. on the wider issue of the question of has our current system failed some new zealanders, well, for me, it's blatantly clear that when you have some of the highest homeless rates, when you have some of the child poverty rates we've hit, things have gone wrong. of course, we have always been, you know, a lack of base economy, but my view is when we start to fail, there is a place for us to intervene, and particularly our housing market is an example of where that's happened. >> i want to chat about that in

a moment, but just on the tpp, you mentioned the amendments you're pursuing. how are they perceived by other leaders and do you think a deal is close because it's been going on and on of course, we had the united states pull out of tpp as well. >> certainly, it's had its bumpy periods. you know, the focus for us, we believe that some of the isds clauses, we wanted ultimately for them to be removed we went in with a particular view and managed to get a deal that looks a lot closer to fta agreements that we've signed in the past, so that brought us an increase in comfort around the agreement. there's no denying, it does improve our access to important markets like japan, but ultimately, actually, most of the parties to the agreement at some point have had issue with the exact things we were raising. isd's clauses have been problematic for a number of reasons for a number of nation

states, so our position probably wasn't unusual, just late in the pace, given we had change of government three weeks out from when it was potentially to be signed off ultimately, i believe there is enough motivation around what is now the comprehensive pacific trade agreement, but it will be really a matter of wait and see as to whether or not when we see the resolution from the likes of canada. >> i just want to bring your attention to some bond news that we had portugal's ten-year bond yield has fallen seven basis points, its lowest level since april 2015 portugal is an interesting story. of course, they made an early repayment of almost 3 billion euros to the imf earlier this month, and that takes the amount that they've already paid back to the im frnk 2011 borrowing to about 76%. so, things are progressing quite nicely for portugal, and you can see that in the bond yields this morning. meanwhile, there are new

questions about the fate of the u.s. tax cut bill as more republican senators express their concerns over the details. the latest objections revolve around tax breaks for families the white house says it will continue to work with them on the tax bill now, nbc's tracie potts joins us from washington with the latest. tracie, is this tax bill in jeopardy >> reporter: it could be in jeopardy, because republicans can afford to lose no more than two votes. there are at least five in question as of this morning. you talked about tax breaks for families the child tax credit was built into this plan, but only some of it is refundable for low and middle-income families, and marco rubio of florida says if they don't fix that, he won't vote for it. mike lee of utah is standing with him he's undecided about the bill. there's bob corker of tennessee, who had been in that back-and-forth twitter war with president trump. he's been concerned about the deficit, the $1.5 trillion bill

and how much is added to the deficit. he's a possible no we're waiting to hear what he thinks of this final merged version. and then there are two lawmakers, john mccain and that did corcoran, who have been out ill. john mccain has been undergoing treatment after some complications from his cancer treatment, what they say are normal side effects, but he's in the hospital he's missed some votes and so, will he and will thad corcoran, who is also ill, even be here for this vote? that's five people and again, they can only afford to lose two. so yes, it's possible that the tax bill could be in jeopardy. >> thanks very much for that and bringing us the latest from washington that is tracie potts from nbc news. now, feel free to e-mail the show streetsignseurope@cnbc.com and of course, follow us on twitter at@streetsignscnbc or @cnbcjou let's look at u.s. futures before we head out for the session. stronger, looking to open up stronger s&p 500 looks to open up about

seven points higher. dow jones up 78 points and nasdaq up 13 points or so. this, of course, follows on from a much weaker session we had in yesterday's trading. as we continue to ask questions about whether or not that tax bill is going to get passed, and of course, we're running out of time as we head into the christmas period the split in the senate is going to be very important one quick look at european markets as well. ftse 100 still below that flat line xetra dax struggling in line with yesterday's performance, down 0.4%. now, that's it for the show. i'm joumanna bercetche "worldwide exchange" is coming up next, and happy christmas jumper day for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain.

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markets now. wall street pointing to a higher open as investors await another batch of data on this final trading day of the week. talking taxes. we're looking at the big winners and losers in the massive tax bill working its way through congress. and christmas crunch time. new numbers out this morning and how things are shaping up for the retailers. it's friday, december 15th, 2017, and "worldwide exchange" begins right now ♪ good morning, and welcome to "worldwide exchange" on cnbc i'm courtney reagan in for sara eisen. >> and i'm dominic chu