welcome to "street signs." i'm willem marx. >> i'm joumanna bercetche. sainsburies is on the rise after beating forecasts with strong christmas sales the ceo tells us that getting online shopping right will be critical in the months ahead >> customers wanted to shop flexibly, they want to shop when it suits them, sometimes in big shops, sometimes in convenience shops, but increasingly online and on digital media

home builder shares slide as taylor wimpey expects 2017 results to be in line with expectations some of the world's biggest bond investors sound the alarm bill gross and jeffrey gundlach say levels on u.s. treasury yields indicate the start of a bear market. and emmbeijing will order 14 airbus aircraft. good morning we're about an hour into the trading session. the handover from asia was mixed. most of the indices traded softer some people say that's on the back of the rise in yields in the u.s. maybe this is the beginning of a bond bear market and that could

have implication for equities from here. the picture for europe is gloomy this morning stoxx 600 trading about 0.2% weaker on the first hour of trading. the ftse is inching into the green. ftse 10 0, a slew of earnings out of retailers this morning. we did have strong results out of ted baker and decent results out of sainsbury's banks are up almost 1% deutsche bank having a very good day today. up more than the 20.2% travel and leisure down almost

0. % air france is one of the laggards that stock is down about 4.5% today. real estate, i mentioned taylor wimpey earlier household googoods down 0.7%. emanuel macron is leading a 50 strong delegation of french business leaders in china as he bids to strengthen trade ties between the two countries. speaking in beijing, macron offered to open up his economy to chinese investors in exchange for greater access to china's markets. >> translator: on the economic front we discussed with president xi, we know where we are going. after a long situation of asymmetry we decided several years ago to rebalance i would like this to translate itself into more chinese investment in france and into more access of the chinese market for french companies. it's the right way to get out

from the current situation we're in president xi suggested china is ready to expand market access to foreign investors >> translator: looking at the future, china will insist on the basic state policy of open doors. we'll continue to open our door for construction and promote high level trade freedom and investment facilitation. we'll implement a system of national treatment and negative list for market access we'll greatly broaden market access and protect the legal rights of foreign investments. the chinese and french governments have yet to announce major deals but they signed smaller agreements those announced include a 10 billion euro nuclear contract for areva, as well as a partnership with sodexo and hiawei president macron says he is close to finalizing the sale of

1 1 184 a 20 j320 jets member member bazin joins us this morning from your perspective, is this trip proving to be a helpful boost to the french corporate sector >> the answer is yes it's extremely helpful because we've been listening to each other, building some trust, saying pretty good and straightforward things like greater access, rebalancing. it's trust build up, and it was a long journey making a lot of people and our french president has been extremely well prepared to basically be in china and talking with the chinese authorities. for us as businessmen, it is a very big step moving forward and probably doing greater things,

probably more speed in between four or five key industries. >> chinese growth has been driving a lot of industries over the last decade or so. how important is the story in china for the hotel industry >> it is key the build up over the last 15 years for highly dominant chinese players did not exist 15 years ago. those players have a willingness to go outside of china to foreign territories. the biggest non-chinese operator in asia pacific and in europe, so for me it's critical to be much closer to the chinese operator so it is the time in the next 14 months to build bridges and try to enhance businesses. >> you talked about building bridges, you have had a

partnership with the chinese firm for around three years. >> yes >> is that more from your perspective about generating profits inside china or is it more about building brand awareness for chinese travelers when they travel outside of china? >> it's probably the latter. trying to be competitive as a non-chinese operator in china is extremely difficult. the chinese have a more efficient, quicker, method we have a partnership with china lodging, and we have another competitor to china lodging. so i hope to benefit from the large market, 120 million chinese traveling outside of china. the more they experience my brand in china, the greater likelihood i have to host them in australia, the pacific and europe so it's brand ability, network

pipelines and trying to get a partnership with a chinese partner. >> within china, which segments are you going to target going forward? is it more at the luxury type market or at the broader consumer base? >> well, the standard, as they should have done it 15 years ago of being into the selective service hotels, tar getting to large wealthy populations, and the core intercontinental areas. for the last couple of years, they've been building a large network. now they are also invading the upscale market with their own brands they're doing it successfully. so, you have the emerging populations going there. so it's 70% non-luxury, where you see the chinese customers

being a force, but wait until five years, that will be probably 50/50 they're going there. you mentioned a lot of the well known brand names around the big hotel groups, is it possible whether you're in china or anywhere else in the world to survive without big scale at this stage >> well, you could i'm not sure i understood your question could you ask it again >> there's a number of massive hotel groups, considerable amounts of consolidation over the last decade, do you think going forward over the next 5 to 10 years that it will be possible for smaller operators to survive >> no, no. it's true with the domination of the online platform through expedia booking, domination on how much money you have to spend on digital, marketing campaigns, if you have too much of a small chain you're likely to survive at the local level but you will never be able to grow in different countries which is why

the big guys like accorhotel are growing much faster by aligning themselves with smaller chains, where they need to be hidden, protected and distributed by people like us so consolidation is happening further, we are only seeing the beginning of it. >> msebastian bazin, thank you for joining us he's traveling with the french president, emanuel macron. let's talk about food shops. sainsbury's reported better than expected christmas sales bolstered by excellent operations across the group. britain's second largest supermarket said it is ahead of previous guidance and expects stronger full-year underlying profits but warned market conditions are challenging earlier we spoke with the ceo of sainsbury's, mike coupe about the challenges for his business. >> we have seen a rise in inflation in the uk over the

last year or so on the back of the brexit vote and the devaluation of the pound that means disposable income is at best flattened or slightly declining. that has an effect on deterrable purchases. car sales in the uk have fallen. it tends to help grocery businesses, because people tend to eat out less, tend to eat in, which means that has a positive effect on the grocery business generally speaking the more deferrable something is, the less likely people are to buy things >> in that same interview, the ceo of sainsbury's was optimistic about its online business >> these businesses are profitable it's important we adapt our business to our changing customer needs it's part of an overall offer. customers want to shop flexibly, when it suits them, sometimes in big shops, sometimes in small shops but increasingly online and in digital media

i keep coming back to the fact that we made a modest profit upgrade so we managed the profitability of our business. so we're delivering against the synergies we committed to the market >> that was mike coupe, chief executive of sainsbury's ted baker says it is on track to deliver full-year results in line with expectations after a positive performance over the christmas period the british fashion retailer reported a 9 % increase in sales growth for the festive period driven by a jump in online purchases. taylor wimpey is bullish on 2 2018 britain's third largest home builder says full-year results will be in line with forecasts the firm is expected to report a 7% increase in full-year tax profit the sca flagged serious concerns about spread betting firms. the uk financial watchdog said

several firms did not have good enough answers to a number of important questions. the fca called on spread betting companies to improve oversight and plans further action now, i'm going to talk to you a bit about some of the price moves we've seen overnight, particularly in wti and brent, of course oil is making some big waves as we're at the highest levels since 2014, this as the eia published updated forecasts for next year suggesting that u.s. production will go up by about 1 million barrels a day for 2018 that almost offsets some of the opec production cuts, which are about 1.8 million a day. there's the past couple of sessions, quite strong ones for wti and brent. as we said at the beginning of the year, this is the first year in a couple years that both of those start the year with a handle above $60

of course u.s. yields have been a major focus and topic of discussion for markets, and it's beginning to bite a bit wln it co when it comes to equity. the talk is around the ten-year treasury, which is back to the 2.55 level that is the highest level the ten-year note has been since last march some people are saying this sets the stage for the ten-year note to get to 3% we talked a lot about the front end of the yield curve at the beginning of the year, towards the end of last year as the fed did hike in december and expectations for further hikes build up in the front end of the curve. it appears finally we're seeing some steam let out of the ten-year note as well. two of the biggest names in bonds have issued a warning. bill grove said 25-year long-term trend lines have been broken in the u.s. five and ten-year treasuries.

and jeffrey gundlach said a rise above 3.22% on the 30-year yield would end the bond bull market for good that's 30 basis points away from where we are now gundlach explained that the fed's tightening would leave the s&p 500 in negative territory for 2018 bill miller takes a different view he told cnbc if the ten-year yield continues to climb higher it will help stocks. >> i think that is still to come if we'll get that, it will be driven by -- you mentioned earlier ten-year yields. those go through 2.60 and head towards 3, i think we could have the melt up we had in 2013 the market was up 30%. joining us to discuss this and many more things is ben weidman. thank you for joining us it seems all the chatter is about ten-year treasuries and breaking through the key 2.5% mark do you think the selloff in

bonds has legs, and if so does it make you nervous about the equity outlook from here >> the key challenge this year is the bond market and where u.s. interest rates go this is short-term volatility here, but there's a clear turn d turnaround when you look at oil prices, gold prices, ten-year yields, tips performance we are clearly in slow motion turn around territory. but i think for the time being it is more of a plus that rates normalize in the u.s that's for the economy, for the banking sector in particular and also for equities as an asset class. >> you said in your note that you expect all assets will rise this year, every single asset except for cash and bonds. why are you so optimistic about all asset classes here >> we have a wild year ahead

last year was easy because of global recovery, very low rates. negative consensus at the beginning of '17 this year the consensus is positive there's the first time synchronized global growth and interest rates are normalizing so i think investors are underexposed to equities and the reflation theme is pushing. the only thing where there is no value and where i would be careful is fixed income. this will be a slow exercise, and the central banks will be very reluctant to take away really the liquidity from the market >> you say that, but then almost everyone has been optimistic about equity prospects for 2018. everyone seems to think this goldilocks environment will continue we have the growth, central banks telegraphing every step

very well. i wonder where the hiccups will come from. if everyone agrees, surely a negative surprise has to come from somewhere >> the consensus is sometimes right. on the eurozone they were totally wrong. so the eurozone is still lagging. there's relative value in many corners. the big difference is what people talk about and what people do. risk assets are on but at some stage this year interest rates will go to painful levels then you have to be careful. >> zoning in on europe, which parts of the european equity markets do you want exposure to? >> there are two-ways to do it we have etfs the key position is to have exposure to european equities as

an asset class if you go for active management or want to take specific risk, i would look at the small and mid cap space that has been lagging. there's less pressurebecause it's domestic recovery and a lot of pent up demand there. >> stay with us. we'll be back to discuss more of these issues shortly all right. on a programming note, jeffrey gundlach will join our team state side today at 16:30 cet. watch out for that especially after his comments on ten-year yields thanks to trump for this week's talks with north korea, that's the message from south korea's president, but the discussions do not remove the danger ahead a report from seoul coming up after this break happy anniversary dinnedarlin'

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praised president trump for encouraging the talks between the two koreas the u.s. has welcomed the dialogue washington says it would be interested in joining future talks, but insists discussions must be focused on ending north korea's nuclear weapons program. south korea's moon says denuclearization is the path to peace. chery kang has more details. >> reporter: south korean's president moon foreshadowed a year of delicate balancing act for his new year's speech. he wants to engage with north korea saying he's open to the idea of the inter-korean summit at some point but only when certain conditions are met at the same time he does not want to be called an appeaser. this is south korea's president saying they will not let north korea's nuclear program as is. >> translator: i do not desire the immediate reunification of

the koreas it's my goal to resolve north korean nuclear issues, a firmly established peace during my term >> reporter: will it be easy not sure, but we're already seeing push back from north korea just in the day of inter-korean high-level talks. words like nuclear and denuclearization did not survive in their three-point joint statement from their high-level talks earlier this week. back to you. >> that was chery kang in seoul. do you see the problems on the korean peninsula as the biggest geopolitical challenge of to 12018 >> not at all. i don't think any of these hot spots, the korean peninsula or the middle east, saudi and iran, will have implications they're regional, they might escalate or not escalate, that is what it is. it will not change the course of the global economy

>> does china growth slowing down a bit worry you >> i think that's also noise china has reconfirmed leadership, reconfirmed economic plan whether it's a half percent plus or minus, it's up to their position what they want to show. >> so coming back to where you want to be positioned this year, it's mainly in europe reading between the lines. is that what i understand? >> structural growth is in asia. that's always fine to be positioned there but you hope from a relevant value perspective that europe is a good play because it's highly export sensitive >> given the fact it's so export oriented, does the rise in currency with euro topping that 1.20 level not concern you when it comes to the outlook? >> not really. i think it's not that important. i don't see big, big shifts.

it's at the margin and it's digestible i think the real risk if you look for it is any risk related to world trade >> so nothing to do with catalonia, brexit, none of those concern you? >> these are all minor issues of some regional importance, but not of global importance they will be resolved one way or the other or they won't be resolved >> when it comes to central bank policy, do you think that the european central bank may start indicating a bit more hawkishness by the end of this year >> it will be very slow. this are elections in italy. squeezing, there's tapering perhaps, but we're very low when you speak inflation rates, interest rates the recovery in europe especially in the periphery started about one or two years ago. there's a long way to go >> nice to have someone so

optimistic on the show thank you very much for sharing your views on europe and on yields coming up, british firms take notice. brussels warns several uk industries that access to the eu will be tricky in the event of a no-deal brexit more on that after the break some air fresheners are so overwhelming, they can...

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welcome to "street signs." i'm joumanna bercetche >> i'm willme menem marx these your headlines sainsburies is on the rise after beating forecasts with strong christmas sales the ceo tells us that getting online shopping right will be critical in the months ahead >> it's part of an overall offer. customers wanted to shop flexibly, they want to shop when it suits them, sometimes in big shops, sometimes in convenience shops, but increasingly online and increasingly through digital media. home builder shares slide as taylor wimpey expects 2017 results to be in line with expectations that's after completions rise 5% in the year.

some of the world's biggest bond investors sound the alarm bill gross and jeffrey gundlach say levels on u.s. treasury yields indicate the start of a bear market. and emanuel macron's call for greater access to china appears to bear fruit as the french president says beijing is close to finalizing an order for 184 airbus aircraft. all right. we have a whole bunch of uk data that has just come out, including trade data and industrial production numbers. just reading through some of those, we have the industrial production number coming in at.4% on the month, 2.5% on the year that's in line with expectations on the month, so that one is pretty much in line. trade deficit numbers coming in

a little bit wider when it comes to non-eu trade deficits at 3.4 billion versus a forecast of 2.4 billion. we have the industrial output as well at 3.5% year-on-year. expectation was 2.8% year-on-year so stronger when it comes to industrial data and weaker on the trade side, which means that the picture for sterling/dollar is almost unchanged, and pretty much in line with what we saw with the price action for most of the day trading weaker, but still around t the 1.35 mark. let's look at u.s. futures and see what the picture is like in the u.s. u.s. did have another very strong day yesterday the russell 2000 not up there, but did make new record highs. that's as all the three major indices did post intraday highs but ended the day slightly off that the picture for this morning is

a tad weaker dow jones is looking to open up about 20 points weaker s&p and nasdaq also expected to open soggier as we said, that is in line with some price action we saw in asia and a bit in europe this morning. speaking of europe, the picture in europe is a bit mixed we have ftse leading the charge, up almost 0.2% through that -- almost at the 7,750 level. we had decent retailer results from ted baker and sainsbury's but you can see xetra dax is the laggard in european indices, down 0.3%. cac has turned around. it was trading softer about a half hour ago. it is now in the green again you can see as well that ftse mib is leading the charge here, up almost 0.4% we touched on sterling data.

trading in the red, down 0.1%. interesting to dollar/yen, that's quite a big move overnight. that currency pair has dropped almost 1%. and does tell you that the yen will continue its recent mode of appreciation and that raises questions about nikkei performance from here. we had a weak session in nikkei overnight, down 0.3% investors there will be watching out for the currency pair. you have you're euro/dollar tra stronger today >> china's factory inflation risen at the slowest level in 13 months ppi rose 4.9% in december as the government's crackdown of winter smog attempted to dampen factory demand for raw materials consumer inflation rose smaller than expected. joining us is the executive vice

president and emerging market portfolio manager from pimco thanks for joining us. just starting with the chinese numbers. it appears this is part and parcel of the government's efforts to crack down on pollution and part of the social reforms they're undertaking as of now the will this bode badly for chinese growth or are these numbers that we can expect to see more of in the future >> we think cpi will climb to 2.5% this year, we may see prints of 3% the second and third quarter, but overall about 2.5% what's more important is the narrative around deleveraging in china. the chinese party congress last year in the fourth quarter, the economic working group, and a lot of ministers are asking are these the first steps towards a broader deleveraging process the sense is these will be baby

steps. so we see the authority focused on delivering growth but also trying to curb financial risks perhaps this year we see the growth of total social physiciansing bel ifinancin below growth >> you say that, but then up on the screen we have a picture of the ten-year chinese bond, we have seen there's been quite a big selloff in the chinese bond market in the corporate bond space and in the sovereign bond space. some concerns that some of that reform is creeping into financial tightening and could set off a wave of panic when it comes to equity markets. what's your view as a fixed income investor on what's been going on in the corporate bond yield space? >> the pboc is on a tightening trajectory we think rates will creep higher, maybe from 2.5%, 2.75%

later this year. so the direction of travel is for tighter monetary policy. having said that, we don't think there's going to be material spillover. if anything, a couple days ago we witnessed a change in the yuan and renminbi, which suggests the chinese authorities are more comfortable removing the counter cyclical factor, which suggests the chinese authorities are more comfortable having seen more volatility in the renminbi so we don't think there's going to be major spillover in terms of broader markets on the chinese front, we're watching closely the threat of ramp up of protectionism from the trump administration i think that's relevant for china, for nafta, we could see trade actions on aluminum, steel, intellectual property, we will see whether that leads to a tit-for-tat for a u.s./china

trade policy >> broadening out the discussion it's remarkable how well em as an asset class has performed in the last year. going into 2018, given that we know the fed may hike four times this year, are you still bullish on em as an asset class? can you be >> i think you can be in the sense that starting with the fed, to the extent that the hikes are gradual, to the extent that they're telegraphed, we believe that's not going to stand in the way of further decent and positive performance on the em side last year we saw dollar em bonds up 10% local currency em bonds up 15%, and significant rally as we entered the year to the extent the fed is telegraphing its intentions and accumulating dry powder to counter potentially future downturn -- cyclical downturn,

that's a positive for the world economy and shouldn't stand in the way of em. the one thing we should keep in mind is we have to be discerning just the first couple days of this year, a big rally in credits in sub issa credits in sub issharan africa so we used that opportunity to lighten up our exposure and sell into this etf bid. that's the beauty of being an active investor, we can pick our spots, and if something is frothy, we can move out and look for other opportunities, places that are more insulated from u.s. policy, like brazil, argentina, india >> picking up on argentina we had the argentinean central bank meeting yesterday, they cut less than market expectations because there's a toss between what the government wants in terms of pushing growth and what the central bank's inflation mandate is

they had to revise that inflation mandate back in december how do you see this playing out? >> if you look at inflation expectations, those are above the inflation targets set or reset recently in late december by the central bank. i think what the policymakers are trying to do is thread the needle is fight inflation, get growth, and also manage fiscal it's a delicate balancing act, but so far argentina is a story that's on a positive trajectory and still we're looking for further positive returns this year >> thank you very much for that. >> bringing you fresh news back in early november it turned out that the chief financial officer at martin spencers was likely to be replaced. the company hired head hunters to try to find a replacement they have found that person.

it is humphrey singer from dickson's car phone. he is looking to take over very soon as the chief financial officer of marks and spencer so a shakeup there at the british firm donald trump will attend the world economic forum in davos at the end of this month. he will be the first u.s. president to visit the meeting in the alps since bill clinton in 2000. george w. bush and barack obama repeatedly skipped the meeting though joe biden did attend during his last year in office a judge in the u.s. blocked the trump administration from rescinding a law that protects young immigrants from deportation. trump announced his decision on daca last september, but the court ruled that daca must remain in place while litigation over the decision continues.

pete alexander has the latest on this the ruling came after trump met with bipartisan lawmakers to discuss immigration. >> reporter: inside the west wing. >> if you don't have the wall, you can't have security. >> reporter: for nearly an hour. >> you have created an opportunity here, mr. president, and you need to close the deal >> reporter: a remarkable televised negotiating session. >> what about a clean daca bill now? >> we don't want to be back here two years later. you have to have security. >> reporter: president trump seemingly taking every position he's had on immigration, even ready to give democrats exactly what they want, a bill to protect nearly 800,000 undocumented immigrants, so-called dreamers with no strings attached >> should be a bipartisan bill, a bill of love truly a bill of love >> reporter: the president even outlining political approach that could include a path to citizenship that many of his hardline supporters oppose.

>> you're not so far away from comprehensive immigration reform if you want to take it a further step, i'll take the heat i don't care >> reporter: funding border security, at least some form of the wall the president made signature of his campaign. ending family based chain migration, canceling the visa lottery and canceling daca jesus contreras, brought here by his mom when he was six what does it feel like to be in limbo. >> feels like i have an expiration date on my forehead that my time here is about to expire >> what does the president say to a young man like 24-year-old jesus contreras. >> like he said in that room, let's work together, figure this out. former white house chief strategist steve bannon has stepped down as the executive chairman of breitbart news bannon led the right-leading

news organization since 2012 he then became chief strategist to president trump and this move comes after bannon was quoted in a new book on the trump administration criticizing the president's son. he called donald trump jr.'s behavior unpatriotic and treasonous after trump jr. met with russian individuals during the 2016 presidential campaign president trump said bannon has lost his mind. bannonlater apologized and praised the u.s. president switching to europe. brussels is warning british companies of being shut out in the eu in the event of a no brexit deal. memos were sent late last year to about 15 industries to warn them to be prepared, and to expect no automatic access to the single market. >> michel barnier insisted that british financial firms will not

receive general passporting rights to do business in the single european market after brexit now he is conceding some could be treated equivalent to the eu after they leave next year barnier reiterate the once more that any free trade agreement struck between the two sides would not carry all the benefits of remaining in the customs union. >> translator: let me say this clearly. there is no revenge, no punishment you'll never see in my behavior any kind of punishment or revenge feeling, but only the mere fact that we want to stay in control of our rules and control how to implement them. as the united kingdom wants to retain its autonomous decisions, it has to respect ours >> barnier's comments come as phillip hammond and david davis travel to germany to secure a brexit deal. ahead of the trip the two ministers wrote a joint op-ed

there a german newspaper they acknowledged barnier's stipulation about losing some benefits of eu membership but appealed to business leaders to embrace the most ambitious economic partnership in the world. the british chambers of commerce says the country's economy looks set for an underwhelming 2018 the bcc reports that the uk economy grew modestly at the end of last year but companies continue to grapple with cost pressures and were reluctant to invest more over uncertainty over brexit. >> it's been a couple of days since we last talked about mifid ii trading caps have been unexpectedly delayed in dark pools. they were forced to postpone restrictions after insufficient data discussing which stocks could be covered they should be ready to go in march. this is just a couple of the

delays we've seen. >> what's interesting about that, people have said those equity caps were not a great idea, and here we see it being difficult to enforce >> because of lack of the right data shares in boeing cruised higher after the company i announced a record number aircraft deliveries for 2017 and airbus is close to a deal with china. we'll look at this battle in the skies between boeing and airbus when we come back after this break. tune in tomorrow when we'll discuss this year's outlook for the global oil industry with the emirati energy oil minister, suhail almazrouei.

shares in boeing surged in the states yesterday after it announced it delivered an industry record of 763 planes for last year. the figure means the company will likely beat out airbus for the world's biggest planemaker

they booked new business for the full year of 912 aircraft, worth 184$184.8 billion and forecast strong growth being driven primarily by new deliveries. the sale of 184 airbus a320 planes to china will be finalized soon, according to emanuel macron he should be in position to know about it the deal could be worth more than $18 billion. the french leader made the comments during a state visit to china where he was leading a 50-strong business delegation. macron said he wanted to sell a350 and 380 models to china in the coming weeks or months john grant joins us this morning to talk about this let's talk about a380s >> yes >> airbus is worried because this program is looking on its last legs. the emirates are not that supportive over the last few months as they might have hoped but putting pressure on the

airbus to maintain the program is china the only way to do that >> yes it's a unique aircraft and the first one going into retirement after ten years of service 747s are still flying. it's too big for many markets, and the average yields people get on it are lower than expected all around, with new technology, the boeing 787 dreamliner, the a350, it's in the wrong place at the wrong time 20 years too late probably >> one way they seem to be trying to sweeten the deal with the chinese saying if you go for this and buy a bunch of these big aircraft we can't sell to anyone else, we will help you increase production of this aircraft here, providing jobs and more importantly technology. does that make it a win-win for both sides >> it helps the chinese who struggled to get into the aviation manufacturing market. they tried their own aircraft, it's still not been delivered. it gives them a fast track

program, but an order for 180 a320s will do the same there is little appetite anywhere for it. >> you talk about chinese production of aircraft, what about the domestic market there? it's close now to beating the u.s. as the largest travel market in the world. >> yes >> what are the limitations of growth as you see them now >> the biggest limitation is capacity, particularly at the big three airports, beijing, shanghai and gangzhou are capacity constrained it's controlled by the military. sometimes it's available sometimes it's closed that leads to lengthy delays and congestion so much so chinese authorities have said to some airports no more services, you can swap an international market for a domestic service, but no more frequency until you sort it out. they have the worst punctuality in the world >> let's jump back closer to home to london

a week from today, heathrow's long discussed third runway will be discussed again the transport minister said the runway will go ahead in the first half of this year in terms of approval. do you think this country has the ability, bandwidth, head space to get this done >> not at all. i think most people in the industry look at this as an ongoing chatter. there is no ambition in the government to make this happen from what anyone sees, the consultation process we're about to embark on was scheduled for a 12 to a 15-month period, he thinks he will condense it into six months with brexit and all of those issues more importantly the forecast they've been using have been fundamentally flawed so other airports have said we would like to revisit the

numbers. >> i want to ask you about competition in the airline space in europe. on the way in this morning i was listening to an ad, norwegian airlines promoting the 130-pound flight return from new york. is this more about low-cast long haul, will that work for a lot of these airlines? >> especially with oil prices creeping back up if that price stays below $80 a barrel, everyone will be able to survive. a lot of airlines have hedged. so they got pretty good prices locked in for some period of time the fundamental difference, the low-cost airlines try a market, if it works, sticks, they stay if it doesn't, they go it's black and white and ruthless they don't operate daily, where british airways and lufthansa operate daily and high

frequency. are they survivable? yes. they are survivable because the industry is being driven by boeing and airbus producing aircraft and putting them out in the market if that stops, then there's a whole chain going backwards of production and manufacturing that stops as well >> we'll leave it there. thank you very much for joining us just a quick word on commerzbank, it's up more than 4% at the top of that stoxx 600 index driving the bank sector higher this morning. one of the out-performers. let's look at u.s. futures before we head out for the morning. it looks as though it won't be a pretty picture there dow jones pointed to open around 30 points lower. s&p about 4 points lower that's it for today's show so why wouldn't you take something for the most important part of you... your brain.

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up, up and away. the record rally continues on wall street as the s&p 500 posts its best start to a year since 1987 oil surging to a three-year high we'll tell you what's driving that move sg. and break out your rally caps, one investor says this market could jump another 30%. it's wednesday, january 10, 2018, "worldwide exchange" begins right now ♪ good morning a very warm welcome to "worldwide exchange" on cnbc i'm wilfred fr