welcome to "street signs." i'm willem marx. sterling hits the highest level since the brexit referendum. china says trade frictions with the u.s. won't harm its economic development after gdp growth beats forecasts. and content is king for netflix. new programs help the streaming service win a record number of new users in the first quarter sending shares sharply higher after hours.

and 11 billion euros will be offloaded by intesa in bad loans. pretty positive start for the morning for europe the stoxx 600 very much predominantly green. you can see it's up around a quarter of a percent across the continent so far this morning. if we look at the individual markets driving that, just the ftse 100 dipping down very slightly the xetra dax in germany up 0.2% the cac 40 in paris up 0.3%. in italy, the ftse mib up more than a half percent. the sectors behind those numbers, you can see real estate there up three quarters of a percent. chemicals up 0.2%.

chemicals up a half percent across europe. household goods and utilities are the laggards, down into the red. let's talk about currencies as well some big news both for the pound and for the swiss franc. spound is bapound is up to the - pre-brexit level big corporate story from the u.s., netflix shares have spiked more than 5% in after hours trading after reporting better than expected first quarter new subscribers. it attracted 2 million new u.s. customers and 7.4 million new global customers the company says it expects that subscriber number to beat forecasts next quarter, and netflix says original programming in multiple

languages drew in new viewers. some of those shows include altered carbon net income rose to a year ago to 2$290 million, revenue grew at its fastest pace in history. to talk more about that, i'm joined by the media analyst at synco security, along with arjun kharpal who is also here arjun, one analyst last night said these numbers were eye popping. even netflix seemed a little surprised. why do you think even they were surprised by the subscriber numbers. >> i think the success of the overseas story is the key thing here netflix started as a company in the u.s. the growth trajectory has been driven outside the u.s the market outside the u.s. is enormous they're making great strides with that non-u.s. subscriber

base >> in terms of that base and the spending power it helps build, what is a useful comparison for viewers to understand how big netflix is becoming? >> overall netflix has 125 million subscribers now globally sky, for example, here in the uk would have 10 million. on that basis a business which has taken 25 years to create 10 million here, we can benchmark netflix and say they have 125 million in little more than 15 years. >> talking about the spending power, they're looking to spend $8 billion over the course of a year that sounds like a lot, but you look at how much it costs to produce a show like "the crown." is that a lot of money in the world of content creation? >> it is it would put some hollywood studios to shame we are also in a golden age of tv the cost of production is high netflix leads the way amongst the peer group in terms of how much it spends annually in

content. this creates opportunity for content producers, because they have a new client in the shape of netflix >> we talked about this earlier. i was a graduate student in new york almost 15 years ago i was getting netflix dvds delivered to me, that was their early business model could anyone expect back then that this company would be so immersed in media consumption habits around the world. >> it's a huge switch and they have done well to adapt to the new landscape. they pushed the original content line, saying we will acquire content not only across films, tv shows, stand-up comedy has been a success there's been a lot of different areas that they have invested in i wanted to get a question in to alex, how big a worry is the content spend at the moment? the amount they're spending

continues to balloon and balloon. for now, subscribers continue to grow revenues catch up. is there a risk that if one of those falls behind, that this content end will be more exposed and investors will look at that and say there's a lot of money being spent here free cash flow is negative at the moment every quarter, it continues to be that way >> they are encouraged by their investors to invest in content they're at that stage in their business model, i suspect that will be the case for another two, three years further down the line there will be a worry if renewal rates decline. they have a churn rate of 8%, which means 8% of subscribers leave the service. if that was to increase for whatever reason, competition, lack of attractiveness of core content, investors might arguing we need to drive for profits right now it's not about profits or cash, it's about subscriber momentum >> you talk about that churn

rate, 8%, why is that not higher is there any reason to quantify why people stay with the service? is it i love this particular program? i will wait for the next season? >> yes if you think about the home environment, netflix is a key backbone of the home cocoon. it's what you do when you go home and you can access it by any household or mobile device it's replaced television, let's be frank it's hard to see what unseats that my point to make to viewers would be how much of this is already in the price or in the market cap let's acknowledge this stock is trading on the best part of 90 times pe so investors latched on to the growth story some time ago it's highly rated. >> what is the competitive threat here for not just large players like amazon, and whether we see apple or facebook pull the trigger on original content, but what about some local players when you look at

southeast asian markets as well. >> that is an issue. it comes back to content if you're originating content locally and in local language and if it is able to drive subscribers, you're on top of the game when you slip, renewal rates slip, you have to spend more to retain subscribers netflix is not active in china there's still licensing content there. that's arguably the biggest market of all that they would love to penetrate. >> one interesting thing that reed hastings said yesterday is that netflix spends it's money more like a tech company we will go to the parliament in a few minutes. you can see that live shot at the european parliament in

strasbu strasburg. >> amazon has plans to sell and distribute pharmaceutical products to hospitals through its amazon business arm. sources speaking to cnbc say the plan was halted when many large hospitals could not be convinced to change their purchasing plans. shares in drugstore shares wall greens, cvs and rite-aid jumped on that news. tesla has temporarily suspended production of its model 3. the company describing the stoppage as a planned one. it's the second time since february that production has temporarily stopped on the car with repeated delays having been a feature of its manufacturing to date. the stoppage would be used to improve automation and address bottlenecks. facebook's product development manager explained how the social media giant collects and shares personal

data david baser wrote that information is shared when you visit a site or app that uses other services, we receive information even if you're lock logged out or don't have a facebook account this is because other apps and sites don't know who is using facebook arjun, this is no surprise if you bothered to read website terms and conditions, but a lot of people don't. >> that's right. >> why is this blog post important? is this an acknowledgment that we have not received before from facebook >> people say why is facebook following me i was looking at an ad for furniture on another site, and now facebook is feeding me ads about a new dining table that's the question, how you are being tracked across the web it needs to be more explicit with the gdpr coming in which

will make these companies have to be more explicit and ask for consent around how they use user da data on that point of gdpr, you have some interesting views on gdpr, alex a lot of people say that will level the playing field from the big tech companies versus smaller players. is that actually the case? >> my own view for what it's worth, this is topical because gdpr is going live within the next six weeks so we will be explicitly asked to opt into everything my own view is what will probably happen is the big portals and platforms will benefit from this, which is not the intention. but what will happen is people will spend more time on their trusted domain sites, or the trusting landing pages, the facebook home page or news feed. >> why is that this is a regulation for those who don't know about the transfer of data between different jurisdictions. why will people be spending more

time on a facebook home page once that's passed >> because they will be less inclined to click a box on a page they don't know or trust. you will be asked to give your consent to any data monitoring on any site. so therefore i think people will revert to the common denominator or the trusted home page >> this will be like a second thing you have to click out of it's going to be a pain for users in some ways, but this is all about protecting data. >> it is it's a classic case of regulation and law, perhaps meeting commerce and media head on and logic not quite resulting. probably the intention was not strengthening the market position of the facebooks of this world, but that's probably what will happen >> what's quite interesting is how many people take this seriously. how many people go out and look at their settings. after this blog post i had a

look at who accessed my data on facebook i was surprised. there were things from years ago when i was a teenager. >> any insight >> a few sports things various other things games, as well, that was another big thing. it will be interesting to see how people go back and remove and revoke access to their data from a lot of these apps that will be a big thing how much of a wakeup has the facebook scandal been on your online footprint and hygiene >> thank you very much, arjun kharpal and alex for more analysis, go to our website, cnbc.com. ab food shares are trading higher after the company reported a robust performance in its primark business they added an improvement in second half margins should boost profit growth in the clothing

retailer chairman michael mcclintock said the margin recovery would more than offset its slump in its sugar unit. shares at casino increased 3.1% in the first quarter reflecting stronger performance at its hyper markets the supermarket chain is under pressure to revive sales and profits in chance after the credit rating was cut to junk last month. and intesa is close to a deal that will allow it to offload 1 bi1 billion euros in d debts. the sale would boost intesa's balance sheet but marks a change in strategy. it announced last month plans to harbor bad debt amid new rules which give european banks two years to write down bad loans

that are going sour. and temasek bought a 3.6 stake in bayer the deal will raise 3 billion euros for bayer's plans $62 billion takeover of monsanto it will bring temasec's holding in bayer to 4%. coming up, we will cross over to our new show in abu dhabi. do stay with us for that crohn's disease. you're more than just a bathroom disease. you're a life of unpredictable symptoms. crohn's, you've tried to own us. but now it's our turn to take control with stelara® stelara® works differently for adults with moderately to severely active crohn's disease. studies showed relief and remission, with dosing every 8 weeks. stelara® may lower the ability of your immune system to fight infections and may increase your risk of infections and cancer. some serious infections require hospitalization.

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now you can get it, too. welcome to the party. welcome back to "street signs. china has reported better than expected gdp growth in the first quarter as strong consumption helped offset the impact of rising trade tensions. emily tan has details from hong kong >> china's economy reports 6.8% growth this year and marks three straight quarters of robust performance. the economy will continue to

maintain stable moderate developme development. on the trade front, friction with the u.s. will not change the trend of stable investment fixed asset development grew 7.5% industrial output grew 6%. global uncertainty remains the biggest risk to the world's number two economy with lingering trading tensions clouding the export outlook and deleveraging expected to weigh on growth in the latter part of the year back on you. china has boosted its treasury holdings by 8.5 billion u.s. dollars in february, the biggest purchase in six months china's treasury holdings rose to 1$1.2 trillion despite trade tensions that increase speculation that beijing might begin cutting back purchases. the u.s. commerce department banned american companies from selling products to zte. officials said the chinese telecom equipment maker will be banned for seven years after

breaching an agreement reached after caught illegally shipping goods to iran. u.s. firms are estimated to provide 25% to 30% of the components used in zte equipment. the company's shares have been suspended pending an announcement on the u.s. government ban the u.s. government is also accusing russia of blocking international inspectors from examining the scene of an alleged chemical weapons attack in syria there are also allegation there's a syrians and russians tampered with evidence at the site the kremlin denied the charge, while both syria and russia rejected claims that chemical weapons were used. bill neely has more on the story. >> reporter: chemical weapons inspectors have been trying for three days now to get to work in the damascus suburb of douma where a poison gas attack killed dozens of civilians, but they've beendenied access, and

that was brought up by theresa may in parliament today. >> furthermore, the syrian regime has been attempting to conceal the evidence by searching evacuees from douma to ensure samples are not being smuggled from the area >> reporter: the douma suburb is free of rebels, soldiers have been distributing aid to civilians. russian troops are patrolling. according to russia and the syrian regime, the suburb is too dangerous for the chemical inspectors, and they need new u.n. permits the americans are accusing the regime of tampering with evidence at the site it's been nine days since the attack eight days since syria took control of the area and the suspicion is they're trying to clear that site of any evidence that would show that a chemical

weapons attack did take place. the inspectors are going to try again tomorrow to gain access to that site. bill neely, nbc news, beirut and russia's envoy to the opcw has said the suspected poison attack was fabricated by british intelligence to pave the way for the allied air strikes >> translator: we have serious grounds to believe it was highly likely that this provocation was organized with the help of the british intelligence services. >> and the white house is attempting to drum up support for an arab-led force which would take the place of the american military in syria, that's according to u.s. officials. it comes as the trump administration looks to encourage allies to provide more economic and military assistance in syria egypt, saudi arabia, qatar and the uae have been approached to consider contributing troops hadley is in abu dhabi

what can you tell us >> the idea that the countries like saudi arabia and the united arab emirates and others would contribute to a force like this is quite questionable. at the end of the day you have to remember that saudi arabia and the uae are heavily involved in what'shappening in yemen. lots of questioning about whether they are already overextended there it comes at a time when people question what the response from the white house would be if there were to be further chemical attacks a lot of questions about the strategy there when it comes to what the white house wants to do with syria going forward and whether or not they do want the arab allies on the same page what we heard over the weekend, strong words from the saudi foreign minister which comes as no surprise, but also push back from lebanon and iraq who don't want to see further escalation in the region. certainly if you look at it from an economic and business point of view, they are overextended

in yemen, the uae as well. egypt doesn't want to do anything which takes them away from security in that country and what's happening in the sinai. so whether or not they get more funds from the gulf to do something in syria is a bigger question >> what's interesting is the inclusion of qatar on that list. the gulf countries are not getting along so well with smaller neighbors. i wonder whether that's wishful thinking on the part of the white house. >> it's a very good question i wonder if all of this is not wishful thinking on the part of the white house. what we've been hearing over the last several months, and even when i was in washington during the trip of mohammad bin salman, i was asking when will we see something moving with regards to the gcc and qatar. there was push back from folks in washington as to whether this was something they needed to move forward in any strict time frame. a lot of questions about whether that will be resolved in the next couple of months.

and it's quite questionable that they would be able to get any kind of economic support when it comes to the longer term in terms of doing something 2,000 u.s. military figures are in syria right now helping to support those efforts there. and frankly in terms of getting any kind of economic support from these gcc states at a time when they're overextended elsewhere and trying to work on their own economies, that's a good question. >> one interesting thing is back in 2015 ash carter said he was not opposed to the idea of arab forces operating in syria. that never came to fruition then, whether or not it happens now is a moot point. >> imagine how complicated that would be so many sides to the same question >> we've seen that in yemen with the uae and saudi cooperating to some degree down there but also operating separately in certain parts of the country final question for you, the red line that we have heard a lot about when it comes to chemical

weapons, any indication that saudi arabia or the uae, whether they have a red line >> that's a very good question at the end of the day these folks are developing their own foreign policies they've been dependent on western power force a long time leading the way. we've seen less of that in the last few years, particularly with regards to syria, the obama administration, a lot of disappointment when he didn't move on that red line. when you hear comments from mohammad bin salman, the syrians as well, the feelings they have about what will happen nextin that country, a lot of disappointment still that things have not been resolved >> hadley, thank you very much for that we'll be back after a short break. - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up!

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welcome to "street signs." i'm willem marx. here are your headlines. sterling hits the highest level since the brexit referendum.

expectations for european employment data could influence the meeting next month china says trade frictions with the u.s. won't harm its economic development after gdp growth beats forecasts. >> what comes to me is the result, do we have better rules than we have today applicable to everybody or not content is king for netflix. new programs help the streaming service win a record number of new users in the first quarter sending shares sharply higher after hours. welcome back to "street signs. bringing you uk unemployment numbers. job vacancies, 815,000 in march,

versus 816,000 in the three months to february the uk count is 306,000 month on month increase let's look at the unemployment rate hitting a new record high of 75.4% in the three months to february sterling on the day up around a fifth of a percent we will bring in thanos. are these numbers unexpected do you think they'll have more of an impact on sterling >> this data is not insignificant. and given that positioning in sterling has been relatively neutral, and we have seen a recent positive flow from investors, particularly from hedge funds, we can argue that sterling can continue doing well i would like particularly

against the euro, given the weakness in the eurozone data. >> one other question i have is about confidence there's a magic number that the pound has hit and reverting to form prior to the brexit referendum is that psychologically significant for traders, do you think? >> up to an extent, but we have to take into account when we look at sterling rally in the last 12 months or so, to a large extent it's been driven because of the dollar selloff. it has been a sterling rally in recent weeks because of april seasonality. sterling has been doing well every april the last 14 years. it has to do with the end of the tax year and the beginning of the new one. also expectations that the bank of england will hike in may, which could increase chances for another hike later in the year >> we're talking about a potential 25 basis point hike as

soon as next month that's about cushing inflation, isn't it >> yes, up to an extent. inflation has remained high in the uk despite the fact that sterling has been appreciated. all recent data has been relatively mixed definitely the data in the uk has continued doing better than initial expectations the uk economy is not doing as well as the eurozone economy, but what we have seen in the last couple of months, the gap has also closed. looking forward, we can argue that sterling against the dollar, the balance that is there, there may be more balanced if the dollar does well given strong u.s. data, but there is more potential for sterling to strengthen this will depend on how the negotiations on trade will proceed in the months ahead. >> thanos thank you for joining

us this morning. looking at european markets. ftse 100 is creeping back to the flat line, having been in the negative as recently as a half hour ago xetra dax is up 0.2% in paris the cac 40 is up 0.3% let's look at futures on that side of the atlantic, s&p 500 up more than 14 points. dow jones looking to open strong, up more than 100 points. nasdaq implied open up 45.3. the u.s. and uk accused russia of undertaking global cyberattacks issuing a joint alert over malitcious attempts t disrupt routers, network systems and firewalls. american and british officials warn millions of machines are being targeted with the u.s.

department of homeland security saying it holds the kremlin responsible. russia has denied the allegations. if you look at some of the stock market trades in russia today, you can see a lot of green on that board a lot of those major energy firms, banks, well known blue chip stocks in moscow all trading well into the green. we look at the ruble as well, we can see that this is slightly weaker on the day against the u.s. dollar. the dollar is up 0.4% against the russian ruble. >> president trump rejected a fresh round of sanctions set to be imposed against russia, contradicting nickki haley who announced that the u.s. would place sanctions on russian companies found to be assisting the syrian weapons program responding to the change in course, the white house press secretary said we are considering additional sanctions on russia and a decision will be

nad made in the near future. president trump's personal lawyer, michael cohen, revealed that fox news personality sean hannity is also on his client list hannity, who frequently defends president trump on air, said he never paid cohen for level services because sought confidential legal advise from him. cohen was forced to reveal the name in court. the investigation is related to a payment cohen made to adult film star stormy daniels amongst others we're joined this morning by tracie potts in washington that raid has had a significant impact on the narrative there, hasn't it? >> well, it has. the president said his own lawyer hired just a couple of days ago to court to argue he wanted to get first crack, first look at those materials because of attorney/client privilege

before the government's investigators. the judge said no. the president, because he was the president, would get no special privileges here. they believe a special team inside the justice department will be able to separate what's attorney/client privilege from what is relevant to the investigation. the investigation seems to be centering around whether or not cohen was paying off women who were making claims about having affairs with president trump and made other clients as well whether that is what he was focusing on and then in the case of then candidate trump if that was an illegal campaign contribution so they will not get a first look at those materials. they may get to look at them at the same time as investigators uncover whatever was in cohen's office the president is off today, focusing on a big international issue. he's down in florida to meet with shinzo abe, the japanese prime minister to talk about

maybe rejoining or staying in the transpacific trade partnership. early on the president said he.think he didn't think it was an advantage for the united states, but he may consider reversing course and staying in that 12-nation agreement. >> one other question about james comey and his media appearances over the last 48, 72 hours. we talked about the southern district of new york and their raid on the offices of the fbi of michael cohen the special counsel is also ongoing and his investigations, robert mueller what impact are these appearances from james comey having or likely to have on mueller's investigation? >> it could have some impact the mueller investigation, we do know, is looking at possible obstruction of justice by the president. comey makes the argument that the president obstructed justice when he directed him to drop the investigation of national security adviser -- then

national security adviser michael flynn. that he felt pressured to do so because the president was directing him to do so however keep in mind that mueller interviewed comey a long time ago so whatever we're now learning publicly, whatever is coming out in this book, what he's talking about in these interviews, the mueller team knew a long time ago. >> tracie potts in washington for us, thank you very much for joining us we're also joined by the deputy head of u.s. and america's program at chatham house. the comey book media blitz tour continues. do you think -- tracie potts talked about it a bit there -- that some things he has been saying could complicate robert mueller's task >> i'm not sure they will. comey has said everything legally significant already. he said in his testimony in front of the senate intelligence committee some months ago. the fact he's saying it in public formats with george stephanopoulos and other places,

that doesn't necessarily complicate mueller's task. we've seen that mueller's team is segregated from the day-to-day grind, the news cycle in washington, they're going about their business, when they announce prosecutions or plea agreements, those tend to happen out of correlation with everything that we're aware of they're almost operating in their own sort of little world i think that comey is a distraction from that, but we wouldn't get more perspective from what mueller is doing if comey weren't on the book tour >> mueller is the most powerful, best resourcedecutorial authority in the u.s is that more of a problem for trump, that investigation on his lawyer's personal offices, than perhaps the special counsel? >> we shouldn't prejudice the result of the investigations we don't know what they'll find in michael cohen's office.

there's been fevered speculation that cohen is in deep trouble, but we have to wait and see. there's a cob instanstant drip , and it's hard to separate from that but having two separate investigations is worse news for the president or potentially worse news, because you have two separate sets of prosecutors looking at questions of possible illegality you have a broadened scope the reason that mueller seems to have farmed this out is because it is out of scope for his own investigation. he seems to have consulted with higher-ups in t s and the justi department seemed that there was some form of illegality, and thats with pa s witwas passed oe southern district of new york which is conducting its own investigation. >> once this has been farmed out to a separate u.s. attorney outside of the special counsel's remit, that investigation would continue regardless of any end

to the special counsel investigation. >> yes exactly. trump has talked about potentially -- he's gone back and forth on his relationship with mueller >> should i fire him should i not should i fire rod rosenstein, should i not this proves that irrelevant. this becomes moot. >> i wouldn't say irrelevant but it makes it more difficult for trump to tamp down the investigations and insulate himself. leaving asoide the political constitutional questions on whether it's legitimate for the president to do so >> our colleague in washington there talking about the transpacific partnership we heard a few days ago that president trump had instructed his trade rep, robert lighthizer as well as his economic adviser larry kudlow to examine the options of rejoining that partnership potentially. it was a frequent subject of criticism while he was on the campaign trial what do you make of this

about-face >> i suspect he looked at the consequences of a trade war with china, particularly on agricultural producers in the midwest, in regions where frankly speaking he won electoral votes in the 2016 election and will be looking to win electoral votes in the 2020 presidential election. he's looked at that and realized he needs to balance out the harm that might come to say soy producers by chinese tariffs on their exports. so he needs to look to other trade partners, the other would be to look to america's allies and partners throughout the pacific region, which was the point of the transpacific partnership in the first place it may or may not come to pass, but the fact he's willing to reconsider it suggests a realization that a trade war with china will have an impact on the u.s. domestic scene

>> over the weekend we heard from nikki haley saying that they're expecting sanctions to be levied, new ones against russia, and that steve mnuchin would be announcing those on monday we waited. no announcements came. there was a great quote in the "washington post" over the weekend that you have the presidents, the executives, and congresses do you agree with that view, and how unusual is that? >> it's very unusual i broadly agree. i think the executive's view, which is the view of the national security counsel, the pentagon, state department, the broad consensus view in those institutions is closer to congress than to that of the president himself. this is where you're seeing the important gaps between the personal view of the president of the united states, what the federal government government's view is and the sub view within the different aspects of the government are

this is one where trump has largely but not entirely been boxed in we saw this before with attempts to minimize sanctions passed by congress to carve out a path where he can have some kind of deal, a relationship with people. >> thank you for joining us. coming up, after bank of america beats estimates, can goldman sachs followsuit ♪ most people come to la with big dreams. ♪ we came with big appetites. with expedia, you could book a flight, hotel, car, and activity all in one place. ♪

welcome back to "street signs. emanuel macron is giving a much heralded speech to the european parliament this morning. he said he's ready to increase france's eu budget contribution on condition that the european union becomes more efficient he also says the european parliament and the european

union generally needs urgent road maps for eurozone reform. we'll come back to with you any further developments from that speech donald trump is expected to announce two nominees for the federal reserve with economist richard clarita in line for the vice chairman position he would be jay powell's deputy and the job has been vacant since stanley fischer left in october. and michelle bauman has been tapped for an open governor's spot as mr. trump tries to fill four vacancies at the fed. >> despite a stock market that's increasingly volatile and still up nearly 20% in a year, outgoing new york fed president bill dudley said in an exclusive interview he's not concerned with current market valuations

>> if you look at the stock market in the context of an economy growing and expected to continue to grow over the next few years, the stock market valuations don't look unreasonable i think the volatility is sort of -- we're back to a more normal routine what was unusual is the low volatility we saw in 2015, 2016, and 2017 i think we're back to a more reasonable level of volatility >> dudley added he was not concerned about banks saying they were well capitalized to withstand any market decline on rates dudley said an additional two to three hikes from the fed this year is a reasonable expectation as the bank moves towards a neutral policy stance which he guesstimated to be around 3% the fed funds rate at a range of 1.5% to 1.75%. dudley will have spent almost a decade at the helm of the new york fed when he leaves mid y e mid-june he will be replaced by john williams on tariffs and trade, dud le

held o dudley held out hopes for a positive income. dudley noted that the chinese yuan has been appreciating against the dollar making chinese exports less competitive. that's the opposite of what the president has been tweeting. steve liesman, cnbc business news >> goldman sachs will be reporting before the u.s. stock market opens bank of america beat eastimates equity revenue of boa was up 33%

year-on-year devon ryan joins us on the line from the u.s. to talk more about some of this what should we be looking out for with these goldman earnings? >> good morning. thanks for having me on. what we've seen from the bank earnings this far has been a good precursor on what we should see from goldman today where the firms have been beating is on trading, specifically equity trading. the good news for goldman is that's a bigger driver for them than other big banks you'll see good equity trading results from them. you also have to think about the fixed income business, where they had a tough run here over the past year, they underperformed some peers. now they have a low bar from last year. so i think you'll see some big improvement over last year in fixed income trading as well trading will be the good story for them that will drive numbers above consensus now. the rest of the business actually looks good here as well investment banking should be

solid. investing in lending should be solid. we don't see anything where you poke holes at it what we're getting is read throughs from the big banks. >> last quarter goldman saw the worst ever performance, down more than 50%. you're expecting much better this time around, am i right in thinking >> we are. some of that is a low bar. they had a tougher run over the past year. so i think the comparables are easier last year they had headwinds from the commodities business. we think it will be a better quarter. if you take a step back and think about the back drop so far this year, volatility is back here that's creating friction in the broader markets. we have had 14 trading days already where the s&p closed 1% or lower versus just four last year so you're getting that volatility that is actually in some ways -- a little bit of volatility is a good thing for goldman in

trading. we didn't have that last year. the fact that's coming back here, you'll see some better results in equities and fixed income >> how much of these numbers that have not done so well on the trading perspective in recent quarters is done to misreading things like volatility how much is down to changes to technology, changes to the way the data is manipulated and much lower margins? >> it's a great question i think everybody is trying to drill into that. i think it's both. there's clearly secular pressures, particularly in the fixed income business, pressure in volumes, in margin. those will continue, but this may be a good example where you get a bit of volatility back, you get probably a pick up in revenues here. so i think it's a bit of both and we're seeing a normalization in volatility what picked income results can be i think this quarter will be good if you took this number and went back four, five years it

wouldn't be as good, but it's more where the bar has been set. so we're talking about a lower bar which has been a function of the secular changes that you mentioned. >> you leave aside trading, you have three other divisions, you have investment banking, investment lending and money management when you look at mme, they finally lost their preeminence there. what's going on? >> it's not something we're overly worried about you think about the m&a back group now, volumes are up 50% year to date in europe up over 70% so you're seeing a good level of activity. i think goldman will get their fair share the back drop has been strong here, especially post tax reform that's been a driver of companies to think about doing things strategically there i wouldn't worry about a quarter or two here or there they have a great m&a franchise. we feel good about that business for them and actually for the rest of the industry as well

>> thank you very much for joining us devon ryan from jmp securities some flashes coming across the headlines here from vivendi saying elliott does not explain how it can help matters with a new strategy on the team without the support of the company's largest shareholder. that's all about telekom italia and also u.s. futures ahead of the market open in the u.s., some numbers to watch include netflix in particular. u.s. futures looking to open higher this morning. that's it for today's show i'm willem marx. "worldwide exchange" is coming up next.

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it is 5:00 a.m. on the east coast. here are the big things you need to know. netflix shares are rocketing higher after the company reported a blowout quarter and sees more big gains ahead. tesla temporarily hitting the break on model 3 production as the company works to address bottlenecks. china's mick groweconomic g coming in ahead of some of the most expectations. china and trade are a big topic today at mar-a-lago. the president will host shinzo a abe. and ot