. welcome to "street signs." i'm joumanna bercetche, these are your headlines european stocks flat line after the dow jones 400 points overnight. the dollar retreats over a basket of currencies red is the new black for kering shares fall as investors fret about negative currency impacts despite sales beats in the fourth quarter. currency headwinds drag on michelin as well they flag a likely hit from

effects rates despite a higher profit this year. and the end of an era. south africa's president jacob soozuma will be reportedly led o resign today u.s. crude output could overtake that of russia and saudi arabia, that's according to the latest iea oil market report which also predicts non-opec oil production will grow faster than demands. neil atkinson from the iea joins us from paris. sir, thank you very much for joining the show our colleague spoke to the head of the opec earlier. he said he had reassurances from russia to keep production cuts in place is it fair to say going forward the u.s. will be the largest swing producer in the foreseeable future when it comes to oil production?

>> well, i think most people assume that the opec output cuts, which have been in place since the beginning of 2017 will stay in place for the rest of this year. what we're watching at the moment is because the united states is essentially a free market for oil, it's production rises and falls in line with the oil price. at the moment we're in a situation where oil prices have risen during the second half of 2017 and the early part of this year, that's given confidence to producers that they can drill more, produce more, hedge more, and we're seeing united states production rising dramatically before our eyes. that's likely to continue during 2018 of course looking further beyond that, depending on where the oil price goes, that depends on the level of activity in the u.s it's simply a reaction to prices rising and falling you can describe them as a swing producer but they're not doing it in a coordinated and organized way that the opec

countries do >> you say the price of oil going forward depends on the level of activity coming from the u.s. but what about the demand side >> we raised slightly our outlook for 2018 as far as demand is concerned. we've taken the view with oil prices for brent increasing from $45 a barrel in the middle of 2017 to $70 recently that must have some dampening effect on demand and that's the case the imf put out a very, very confident outlook for global gdp recently that's a factor we're taking into account we did strengthen oil demand slightly in the latest report. it's part of this supply/demand balance that we're keeping a close eye on to see if there is support from demand growth >> where do we stand in terms of oil stock right now? how close are we to achieving

balance in excess stock? >> in 2017 stocks in the ocd countries fell sharply we highlight ocd stocks because that's the metric by which the opec producers measure the success of their output cuts against, our stocks falling. it's true they've fallen sharply in '17 and we think at the end of the year they're about 55 million barrels or so above the five-year average. indeed product stocks are slightly below the five-year average. having said that, we think in the early part of 2018 partly due to the very rapid rise in non-opec production led by the u.s., that stocks may actually rise in the early part of the year so the day when the surplus to the five-year average is eliminated, it's been put off for a while. but we'll have to wait and see how the supply/demand balance plays out. >> i want to ask about the price

action in oil last week. it seems as though the price of crude stalled at $70 and has come down to 63. how much of that is being dragged down by other asset classes and equity specifically there? how much is on the back of fundamental factors? >> it's often been the case in the oil industry over the last 30 years or so, when we get a sudden strong move up or down in the oil price we tend to get overshooting the price settles down at a more comfortable level. we thought $70 a barrel level we did see a few weeks ago was a little ambitious you're right to say as part of the corrections we've seen in many markets that oil prices have fallen back but we think it's not just as part of the overall market corrections, it's the realization by many investors who took their profits that perhaps the fundamentals of the oil market in the early part of the year don't yet justify prices rising quite so high.

>> thank you very much for joining the discussion this morning. that was neil atkinson head of the oil industry and markets division at the iea. the fundamentals of the oil market are clearly improving, that's the message from mohammed barkindo he detailed the latest monthly report >> the issue is not about overestimating or underestimating, it's realism. the integrity of our report speaks for itself. we do acknowledge that non-opec supply had surged last year and hence we adjusted or revised our numbers. so also the projections for 2018 be that as it may, we had also revised our demand figures in line with global economy growth when the imf also dede -- revis

numbers for growth, and because of the relationship between global economy growth and demand and other factors we also revised our demand numbers to 1.6 million barrels for both 2017 and 2018. >> you were just on a panel talking about the volatility in the markets. we have seen the oil price come off. we have seen concerns about extra supply coming from non-opec but also after tight for risk-on instruments challenged in the past week or so do you have concerns that other issues including falling stock markets could hurt the level of oil and hurt the production agreement? >> unlike in the first quarter of 2017 when we came into the quarter with an extra supply in the region of 2.4 to 2.5 million

barrels a day from opec and non-opec and going into a low demand season, this year it's a different story. the implementation of the supply adjustment by both opec and non-opec at a record conformity level of over 100% had shrunk this glut by over 200 million barrels. now we are hovering around 100 million over an above the five-year average. even i agree we have already achieved our objectives because of our changes on the baseline now, what's happened last week in the equity markets and the financial markets, of course they did effect all the commodities, but you can see it's just a blip and it's expected so the fundamentals are so strong we do not expect any

hiccup along the way similar to what we had or we saw last year because of this factor >> finally no concerns about appetite from some of the big domestic russian players and others about wanting to be let off the leash and produce more barrels? you think the kremlin and mr. novak will keep them in check? >> i have and received assureses both from mr. alexander novak and president putin that they will remain committed to the op opec/non-opec declaration. and they have proved this through the high level of conformity to their supply adjustment so i think there's no concern here we're all in the same boat >> some interesting comments from the opec secretary-general

barkindo there let's check in on oil since all these comments coming out of opec and the iea this morning. there's been a big move in the oil complex. in the past week it's come off in line with the correction we saw in equities as neil atkinson pointed out when crude touched $70, it looked toppish since then we have come down you can see brent it trading close to 63 now. 62.60, slightly stronger on the day, still about $8 from a week ago. as some of those fundamentals continue to get factored in to supply going forward, you can expect that price to hover around for the time being. other european markets, the picture in europe as far as markets is concerned is gloomier relative to yesterday. dax, cac, mib all struggling to start the day in the positive.

ftse 100 is leading for a change, up 0.1%. all eyes will be on the uk inflation data coming up in about a half hour's time let's look at asian markets. all of the other majors, we saw kospi in the green, hang seng also had a good session in line with the u.s. and the dow and s&p having a good rebound session the first day of the week knee day wnikkei was down overn. nikkei was on a national holiday yesterday, so there was no market activity there. you would think that on the first day of trading it would catch up with its counterparts that has not been the case some point to the fact that the dollar/yen has appreciated another 1% so yen is weighing on the nikkei also speculation about who will

succeed mr. car rokuroda let's look at fx the picture this morning is one of dollar weakness once again. u.s. equities stronger and dollar weakness persists sterling/dollar is about 0.2% stronger euro/dollar also about a quarter percentage point stronger. the recent stock market drops have pulled down price earnings multiples meaning some stocks may be looking more attractive to investors. bob pisani looks at what could happen as equities get cheaper >> stocks snapped back with the dow surging more than 500 points at session highs the biggest complaint a month ago is that the market can't keep going up. it's too expensive now the markets are cheaper than two weeks ago. the s&p is trading at a multiple

of 17 times forward earnings that's higher than the average multiple of 6, but lower than at the start of the month stocks are cheaper now that the dow has recouped about half of its losses from february 1st, the debate shifted from are we at a tradable low, did we hit a short-term bottom to has the market going untoo far too fast 12 1200 points on the dow rising rates have led to a valuation adjustment the bulls would argue that the correction was technical, nothing fundamental behind it. i'm not sure about that. short covering is behind that. but the correction is still in its early innings. it's only six days old, it seems short to be calling a bottom even those who believe the fundamentals are intact agree the buying has been on average trading volume and there's not much conviction behind it.

they're calling for retesting of the lows maybe next week in other words, there's still a lot to come. i'm bob pisani, cnbc business news, new york the first segment of this show has been mostly about oil get involved in the conversation tweet us and follow us on twitter, streetsignseurope@cn@sc what does the future of south african politics look like more after the break mom, dad, can we talk?

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not the other way around. welcome back to "street signs. african national congress leaders have reportedly decided that president jacob zuma must go the anc chose to give him 48 hours to resign or face a recall his presumed success, cyril ramaphosa gave him the news in person in a tense meeting. the anc is scheduled to hold a press conference later today the rand was volatile as it reacted to the unfolding

political drama in south africa. shares in france's kering are trading lower. the group warned against currency fluctuations saying they may weigh on the group's performance. kering reported better-than-expected fourth quarter sales because of performance at gucci and rachndstad shares have risen citing a strong recovery in european job markets and reported slightly than expected revenues earlier we spoke with randstad's ceo and asked about inflation growth on the company's growth >> we see this in the united states, in north america, already it's 3% wage inflation, in europe it's much lower, much lower than one would expect.

one way or another i think the flexibility in the market is absorbing this one should not forget that productivity gauge should justify this type of wage inflation, not everywhere we see -- for example, in our own company, productivity improvements are hard to get because there's also pressure on pricing. shares in metro are slightly lower after rising in premarket trades metro confirmed its guidance for 2018 overall earnings at 6$608 millin were ahead of expectations and an absence of restructuring costs also boosted results. michelin shares are trading down the tiremaker targeted increased operating profit but warning a hit from foreign exchange rates could dampen the numbers it declared a full-year dividend of 3.55 euros per share and said it would deal with higher raw

material costs the firm added it's on track to achieve 2020 targets after posting higher profits for 2017. the bank of japan governor haruhiko kuroda stuck to his easing script in a speech in japan. it's his first appearance since his official nomination to continue in the role government officials have been supportive of another term for kuroda saying continuation of policy is key to market stability. attention is turning to the impact of rising rates steve liesman looks at what is happening after past rate hikes. >> the stock selloff launched the great rate debate with the question of what happens to stocks when interest rates go up what's happened in the past? we looked at six occurrences the first one back in '93/'94

was the only negative period for stocks when interest rates rose sharply. '44% back in '98 and 2000. 11% in '03 and '04 41%. 43% this was mild compared to the previous one, though it is a sharp spike in interest rates. what happens six months later to stocks after yields rize in t s ten-year this one was positive. the other ones were negative 8.4% here with a question mark of what happens next here. all of this happens in the context of declining ten-year yields over time we're looking at the spikes in between. do the average, put it altogether what do you get an average of 211 basis points or 2.1 percentage rise in the ten year during that time that gives you a 26% increase in the s&p, but

over here you see six months later just a 6% rise back to you. >> speaking about bund yields, lynn graham taylor from ramma bank joints us is it fair to say equities from here on is a function of where the u.s. ten-year goes >> it's interesting, we were hearing that this move is a bit different than what we've seen in the past. you know, traditionally you would expect as rates begin to move equities are probably doing well, because rates are moving and the economy is doing well. inflation is picking up. the central bank is looking to put the brakes on. this time around the central bank is looking to refill their toolbox for the next downturn, so they are looking to raise rates even though maybe inflation is not taking off. so it's a bit of a different scenario than last time. >> what do you think that does to the yield curve >> i think in the short-term

there seems to be bearish arguments, reasons to sell treasuries whether it's tax reform, better wage growth figures, higher issuance, but we think inflation will not come through. so as the year progresses, you will begin to see a bit of a declining yield and pricing out of fed rate hikes. our call is for two rate hikes >> when do you think the fed will get those signals as of now all of the elements are pointing to a much more hawkish fed. as you say, some people are saying the fed will have to be more aggressive to combat some effects of fiscal easing at what point this year is the fed going to say we're not seeing proper inflation and we'll have to hold back on the fed hikes. >> there's a lot of doubt in their mines about the fiminds a

the phillip curve. as the economy reacts to those rate hikes, traders will react to it who have never experienced monetary turner. so a slow burn coming into q2. >> when yields shot up almost to 3% last week, we did not see a strong bid for the u.s. dollar with yields looking that high, new morn would start to flow in would see investors from overseas wanting to buy the treasury market. that has not materialized this time around. do you think it may in the future >> yes maybe it's a bit of lack of conviction from overseas investors, declining real yields, when inflation is going up, inflation expectations are going up perhaps a bit of that. maybe just bit of uncertainty. that's why the dollar has not strengthened >> in terms of leadership and bond markets going forward, where should investors be looking? bunds, jgbs, a change in bank of

japan policy where is leadership coming from? >> i think the front end of the euro curve, the bund curve, the market has gotten ahead of itself in terms of pricing in hikes. you'll see the ecb confirm what the gap between the end of qe program and the start of the first potential rate hike. so i would like to call that the front end of the bund curve. >> to be short or long >> to be long. >> would you be a buyer of u.s. treasuries around this level >> i think we probably would still like to sit on the fence for a month or two before then we like getting long after a little bit of hubris drops out of the market then get long later in the year. >> stay with us. we have the uk inflation data coming up shortly. we'll get into that. coming up on "street signs," we will get the latest reading on uk inflation just days after

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. welcome to "street signs." i'm joumanna bercetche, these are your headlines european stocks flat line after the dow jones 400 points overnight. the dollar retreats over a basket of currencies hitting a five-month low against the yen. red is the new black for kering shares fall as investors fret about negative currency impacts despite sales beats in the fourth quarter. currency headwinds drag on michelin as well the french tiremaker flags a

likely hit from fx rates despite a higher profit this year. and the end of an era. south africa's president jacob zuma will be reportedly led to resign today. all right. just getting the uk cpi an inflation data let's look at where this came out. the uk january cpi, 0.5% down month on month, that's 3% year-on-year that's higher than expectations. expectations were for it to come in at 2.9. cpi headline coming in higher. not really dropping as fast as the bank of england would like cpi -- rpi as well was up 4 %,

you're-on-yea year-on-year, that's in line with expectations. food and energy, up 2.7% year-on-year that's also higher so beats on the headline cpi and the core cpi number. let's just bring in kim here to have a bit of a chat about this. it's interesting that last year the bank of england was focused on this headline inflation rate. some people say they got forced to hike because of the persistence and stickiness of those headline numbers doesn't seem to be changing. still up at 3% despite the fact many have been saying the numbers should be dropping what's your take on the inflation outlook in the uk from here and some of the hawkishness? >> it makes sense. the mpc have been more hawkish, a bit more hawkish i guess there's a lot of strength of a lot of factors surrounding brexit has been difficult to estimate. whether we structurally shrunk the size of the economy.

changed the dynamics of the labor market quite a few different things going on along with obviously quite a bit of currency weakness coming through that will be dropping out now. yeah, it makes sense they've been hawkish if they're that far off target what is your forecast for the bank of england hiking cycle going forward? some say they could hike as many as two times >> i think we got two times. slightly -- fairly consensus on our behalf yeah guess it makes sense given the inflation mandate. >> where do you think gilts go from from here in it was a bearish surprise the rhetoric out of the mpc last thursday on the front end they were not pricing in extra rate hikes, but also on ten-year gilts as well >> in the short-term it's got to be higher based on these higher inflation numbers coming through, more hawkish than expected or a hawkish tone adopted by the boe

>> the bigger question is brexit and the political back drop there. at what point of the year do you think this is going to start to play into the ir view of monetar policy >> it's been difficult to estimate i think the uk has been lucky. it's been insulated from brexit from the strong world growth story. we've not seen the negative ramifications come through we've seen growth stay all right, though we're lagging everyone else. i guess it's when we get more clarity on how financial services is going to be impacted, how the immigration will bottom out, that will be important for wage inflation it's a bit of a slow burner just depedestrinding on how negotiat go so far we have not gotten much clarity on what the end goal is. has not been made clear by uk politicians. no one can decide on what they want it's difficult for the market to trade off expectations

what is the view of the currency here at 1.40 it met resistance. we bounced off those levels. what is the view on cable and that currency pair going forward? >> you have to favor more sterling strength off those numbers this morning a bit of inflation not quite picking up in the u.s. >> thank you very much for joining us we have been discussing all things from u.s. treasuries to uk inflation and gilt. >> let's check in on the markets, cable is a bit stronger today, up 0.3% that's on back of the dollar weakness theme that's persisting this week. euro/dollar also stronger. the main focus is on dollar/yen. that currency pair about 1% weaker overnight yen appreciation biting into the nikkei switching to european markets, we can see the ftse has drifted

into negative territory, below the flat line. all of the four majors are trading in the red really struggling to hold on to some gains we had in yesterday's sessions a bit weaker but nothing to worry about just yet we'll see how the day evolves. u.s. futures, where the action happens, dow jones looks to be opening up about 160 points lower, this is after ending the day 400 points higher yesterday. still a lot of volatility in the space. it doesn't seem to be going away soon all of these signals are pointing to a weaker open in u.s. equities. the japanese cryptocurrency exchange coincheck filed a report with the uk financial services authority reuters reports. it involves the hack of its system that snapped up more than half a billion dollars worth of digital money. a group of crypto traders is filing a suit in japan over coincheck's freezing of digital

currency withdrawals arjun is in dubai. i believe you have a special guest with you >> i do i have the pleasure of being joined by will.i.am who is here to talk all things tech you're here to talk about ai and some technologies transforming the world today. how big a deal is ai going to be in the future? >> ai is like what the internet was in 1987 and beyond imagine what people thought the internet would be in 1987 to what it is today no one thought that uber would help solve social issues in new york with cab drivers not stopping for african-american. uber says that person is not african-american, that person is data you don't need a security barrier because we won't exchange in cash imagine the jobs created with

ai, with the hopes that it's going to solve humanity's problems things we have not been able to solve up to now. so for every problem needs a new tool i believe this tool is now to help us solve these problems if we educate the youth the way we're investing in ai -- if we're going to invest in ai, we need to invest in h.i., so we don't have an unbalance of super smart machines and super stupid people as a society as a whole, we need to double down on education as much as we are in artificial intelligence >> one ai application you're working on now is a voice assistant, omega how big will voice interface be in the future? is that how you see us interacting with surroundings and devices? >> yes, we created a voice first artificial intelligence operating system it's a platform to develop on

top of and assist you on things you're doing in life it's an augmented intelligence to help augment your thinking. like, you know, to help you solve problems it can help you save time as well >> one of the technologies that's been discussed here quite a bit at the world government summit is around blockchain technology a lot of what do you is access to technology. how big is blockchain for you in the future >> i'm not a blockchain expert at the moment. so i don't want to comment on that, i like the idea of it, but i'm not an expert to comment on that >> have you looked much into the cryptocurrency space, that's seen as a place that other countries who don't have a stable currency can perhaps jump in and use a way to improve livelihoods? >> wrong person to talk to about cryptocurrency that's not my focus. >> when you look at technology, how do government is, and technologists and companies be

responsible in developing that check so that there is not a backlash against some of the technology companies that we have seen so far >> explain more. >> how do you get these companies, these governments to develop technologies, such as ai, powerful technologies in a responsible way. >> from my experience, people are developing the technologies right alongside government what we need to make sure we do is educate the youth we need to focus where we need to put the most attention on, that's this gap between investment for artificial intelligence versus the investment for human intelligence we're going to have problems in the future if we don't address the one that is the most human thing that we should be concerned about. machines are going to continue to be advanced like calculators can outc-calculate the smartest mathematici

mathematician. so how do we make sure it's not a super wide gap to where we'll be facing -- if we have inhumane problems with racistiism people people, if we don't get control of this gap, imagine the future. now is the time to put our priorities in check, that's education, education, education. if it's finance, you will say what's my return on investing in education? that's the wrong way to look at it it's a human right >> there's been talk more about the future here, flying cars, ai, for you, how do you see the world playing out in this sphere of technology? what kind of impact will it have on society >> 1918 is totally different than 2018. 2118 is going to look like something we can't imagine now but right now the time -- if

you're creative, use these tools to create, paint an awesome tomorrow those folks in 1918 had no clue that an airbnb would be here, the internet would be here, but they were creative they designed the world -- the version of the world we live in now. the edisons, the teslas, the westing houses, the marconis, they're all responsible for today. now today we have to look to different sectors of society, like inner cities, is there an edison there slums, is there a tesla there? and if there isn't, how do we encourage a 9-year-old to believe that they are. these tools, you know, to paint tomorrow, it's going to come from the unlikely candidate. especially folks trying to solve problems >> will, thank you very much for your time. will.i.am giving us an insight into the technologies he sees as

transformative in the future >> very much to look forward to in the future in that space. hadley also spoke with the nasdaq ceo in dubai and asked her if it's too soon to be launching bitcoin etfs >> the s.e.c. in the u.s. made a determination that they believe it's too soon. so the regulator in the united states has made a determination that the markets that underlie the price of the bitcoin are still unregulated markets. that means these markets are not interherently fair, elements of them may create distortion in pricing. if the foundation of an etf is a basket of prices, if those prices are not reliable, the s.e.c. then can take a decision that they're not ready to have that become available to retail investors. at the end of the day the s.e.c.'s primary role is to protect retail an create fair

markets. they don't have control over the markets within the bitcoin, so they focus on protecting those retail investors so they decided it is too early. in the nordics, we have been working with a regulator and launched two etns, exchange rated noted notes with the nord partner. and they surveilled that activity, risk management around that activity. so some trading has developed in those securities >> how quickly will you see these on your platform >> the nordics are our platform but the u.s. markets are not looking at it what tchlit what is the time line? >> i don't think we know the timeline the nasdaq being a market itself, it's a nascent asset class. i think it's prudent for regulated markets to take a watch mode on this

understand it. overtime they can make a determination on whether or not we can provide a fair market environment for all participation -- for all participants and whether or not the asset class has sustainability over time let's check in on the latest from pyeongchang where norway's marin lunby took the gold in the ski jump the french are off the mark after martin furcat took gold in the 12.5 biathlon pursuit. in the men's moguls, kingsbury swept aside all competition to win his first olympic gold. in the medals table, germany leads the way with four golds, the netherlands, u.s., norway

and canada are making up the rest of the pack for more from south korea and some olympic career advice, head to cnbc.com. speaking of korea, the us is open to talks with north korea according to south korea's president moon jae-in. details were not provided. the news comes days after kim jong-un's sister attended the opening ceremonies in pyeongchang. mike pence did signal talks could be possible. if you want to get involved in the conversation, comments on uk inflation or the olympics, tweet us at streetsignseurope@cnbc how would describe an infrastructure budget? well, it's valentine's day tomorrow and president trump is finding the romantic side of his spending package take a listen as we head to break. >> to me, this is a very, very

sexy subject the media doesn't find it sexy i find it sexy because i was always a builder i always knew how to build on time, on budget. that's what we want here one reason we like the public private is that we'll get some of these things con quickdone q much more rapidly than a government, as good as somofe these governments are. your hear. your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember.

welcome back president trump outlined his 2019 budget proposedals and an infrastructure plan on monday. the military, the opioid crisis and the border wall featured as high priorities, while rolling back obamacare and making cuts to medicare, moves unpopular with democrats the 1$1.5 trillion infrastructue plan will be funded with 2$200 billion of federal money leaving states, local government is, and private invest investors to fine rest. >> reporter: special delivery. the white house sending its 2019 budget blueprint to capitol

hill inside, more money for the military and billions for a border wall and to fight the opioid crisis. but entitlement programs like medicare facing big cuts >> to me this is a sexy subject. the media doesn't find it sexy >> reporter: president trump in his element surrounded by state and local leaders, unveiling a plan to fix the nation's roads and bridges. >> washington will no longer be a roadblock to progress. washington will now be your partner. it will be your partner. a lot of money 1.7 trillion bigger than people thought. >> reporter: but only a fraction of that coming from federal dollars. the rest, it's up to the states to foot the bill or work with private companies that can democrats calling that a bait and swrich >> the president is relying on state and local governments that

they'll take up the slack. >> reporter: the president says he wants to work with congress, but if congress will not support the plan it falls on the stateses states to get it gone president trump says his plan will return power to the states so they can decide where the money should be invested blayne alexander, nbc news, washington. let's bring in mike jakeman and i would like to hear your take on this sexy infrastructure plan is this dead on arrival? will it happen >> not necessarily dead, but there's a real challenge here. the reason is the context. in the last three months we've seen luhuge tax cuts, last week we had the budget spending caps raised for the next two years. so we have the u.s. government spending an awful lot of money and receiving less and trump is still trying to find more and more money to spend on infrastructure. it's a question of whether or

not congress will be willing to sign off on spending and spending more. >> we'll get to that point in a second clearly it is a maker hurdle for the democrats to cross, given they need 60 votes in the senate and they only have 51. one of the criticisms leveled at this specific plan is that it's more targeted at rural areas than at urban areas. some people are saying it's just another example of president trump playing to his base again. what's your take on that >> i think the u.s. needs infrastructure enhancements across the board some major metropolitan railways, the metro in new york is in urgent need of investment. the u.s. needs airports, bridges, repairs to existing bridges, new highways. it needs them across the board we don't know where this 200 billion with all the help from the states, if it proceeds as trump would like, will be directed but the fact is there are needs

across the board what about the other elements of his wish list. border security, defense will he be able to get more funding for those? >> that's the big question there are no surprises in the budget trump is doubling down on issues he sees as important and attempting to claw money back by cutting some areas he cares less about, like medicaid and another attempt to repealing and replacing obamacare. he really wants to deliver this wall even at the expense of cutting social programs for low income americans ultimately it's going to be up to voters to decide whether or not they think those priorities are correct. >> taking a step back, this government introduced 1.5 trillion worth of -- extra deficit on back of the tax cuts. another 300 billion worth of spending because of the latest budget plan over the next couple of years

what happened to the fiscal hawkishness of the republican party? is this a change in ideology >> it's a huge shift it's one that republicans have tried to kind of take in their stride because there's an enormous imperative that began with the tax cuts last year to try to do something in office. in the end being seen to do things and achieve things has come at the expense of their ideology now, what this will mean is the u.s. will run much wider deficits, increase debt payments and ultimately when the next recession hits, the u.s. government will have less money in the bank to help out with fiscal stimulus like it did in the aftermath of 2008. the trade off of that is you expect to get faster short-term growth >> speaking to the faster short fro term growth, will these benefit the republicans in the midterms?

>> imagine a world where they have not done tax cuts the accusation through trump's first year is what have you done they got the tax cuts. the sacrifice is they lost their claim to be good budget managers this gives them something to say in the midterm we have delivered you more money in your pay packet >> and the stock market was up >> tying your success to the stock market is a lousy strategy whether or not they succeed with this, certainly voters tend to think short-term rather than long-term. they won't be thinking about higher debt repayments, but this is an extraordinary gamble with america's future fiscal health >> positive for the short-term and questions for the long-term. thank you very much for joining us that's mike jakeman from the

economist intelligence unit. let's check in on the markets. the picture in europe is not that pretty. we have not been able to hold on to the gains we saw in yesterday's session. the xetra dax, cac, minute are all lower. ftse 100 down as well. let's check in on u.s. futures it looks like the dow dropped even from where we looked at it at about a half hour ago seems to open up about 200 points lower s&p opening up about 15 points lower. we'll have to see how things transpire in the next couple of hours. that's it for today's show i'm joumanna bercetche "worldwide exchange" is up next. we use our phones and computers the same way these days.

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buckle up. dow futures are pointing to a triple digit loss following yesterday's 410 point gain what you can expect from the wall street roller coaster rird. and whalgreens is set to mak a buy. and making america work again. new details on president trump's budget and his bet on fixing america's prinfrastructure it's february 13, 2018, and "worldwide exchange" begins right