welcome to "street signs." i'm karen tso. these are your headlines shares in socgen fall with the bank's ceo telling cnbc europe's lack of volatility is to blame >> it's fair to say europe lags the u.s. for a few quarters in this normalization of volatility and rate level and second, it's digesting the

rules. shares in europe's biggest bank, hsbc, fall after first quarter profit comes in below expectations despite announcing a $2 billion share buyback. mixed traffic in the airline sector iag rallies on a 7 5% profit jump, and airfrance-klm hits turbulence. and the dollar stays near four-month highs ahead of the u.s. job report, but the argentinean peso is near an all-time low >> the latest in eurozone data don't forget yesterday we had weakness in the inflation numbers. so the market is somewhat concerned about the pace of growth that number hampered by what you saw in terms of economic protectionism and also strikes

that took place in two major economies, germany and france. so the eurozone april final composite pmi hit 55.1, this is a tad off the flash number 55.2. in terms of where it sits versus the previous month, also just a fraction under that 55.2 the number, 55.1 today in terms of final services pmi, 54.7, also below the flash number of 55 on the final composite, future output, 5.7. that is actually a better handle than the 65.3 flash. so that is certainly some optimism given that there has been patchiness across some of these european economies the euro/dollar reaction this morning, you're seeing 119.67 on your charts. this is steady in reaction the trade has been off by 0.2%

recently i want to take you to the latest on what's happening in trade negotiations you may recall that u.s. negotiators including steve mnuchin and robert lighthizer have been in beijing for the last couple of days negotiating trade outcomes just crossing the wires, u.s./china officials saying they're willing to maintain close communications on relevant issues and they're willing to set up a mek nichanism on relevant issues they have also exchanged opinions on expanding two weigh investment, protectionism of intellectual property. these are the issues around technology and some of those american corporates to chinese companies looking to take on the americans in high-tech they have exchanged opinions on solving tariffs, and non-tariff

measures and china logged representations with the u.s. on zte there was chatter there may be an executive order around zte, and the type of business it could do in the states the u.s. trade delegation said it attaches great representations on zte the discussions between the two countries have been candid, efficient and constructive and that the vice premiere lee and u.s. treasury secretary steve mnuchin were both present in bilateral trade discussions i don't think this has been a huge item for many investors worrying, just there has been some level of sentiment and confidence a quick look at markets and how they're traveling so far in the friday session we're up by a third of a percent. these markets just positive

despite what was not a runaway session on wall street fairly steep losses at one point on the dow, down 394 points at its low before closing pretty much flat, if not slightly positive by the end of the session. the handover was challenging corporate news out this morning along with the data i mentioned. the weak market is the french market you can see the patch of red across on european markets, down to fairly weak performance in some big banks today elsewhere, though, bright spot has been the italian markets, 0.7% north, outpacing the dax. above what you're seeing on the ftse by just 0.4%. by sectors as we break it down, technology at the top, a bounce of 1.3%, outpacing the rest of the sectors, also a bright spot on wall street as well basic resources, 0.9 higher. you can see the banks playing out as the sector slides by

0.7% broader market decline also in france two of france's biggest banks are under pressure today after first quarter earnings underwhelmed socgen, which is in the middle of settling a litigation case in the u.s. saw quarterly revenue drag lower as negative currency effects weighed. a weaker dollar coupled with a slowdown in fixed income trading at pnb paribas investment banking revenues france's largest lender posted a 17% fall in the period joumanna bercetche is in paris for us the market loves a narrative and it got it through two banks today. when it comes to the corporate and investment banking, do you see any upside down track on the back of what has been a weak patch for these two banks? >> very good question, karen that's a question, of course, that i did pose to the ceo of

societe generale and the ceo of pnb. to highlight what you said, the weakness is in that markets division starting with societe generale, if you look at their net income year on year, it's down 13%. most of that is led by the weakness in global markets and investor services division, which is down 13%. revenues down 27% year-on-year, and equities down 25%. that's the surprising one as far as societe generale is concerned. most people thought this quarter would be a good one for societe generale given how equity derivatives, exposed they are, given it is one of their fortes in their i venvestment banking business so i sat down with the ceo and asked why there is so much weakness in the equities business given that u.s. investment banks had a good quarter. let's take a listen.

>> it's fair to say we have financial governments which are good, and good level, in all the retail activities. french retail, and we confirm stabilization of the revenue we have in mind for the full year, international retail and financial services, which comes from growth potential. on the global markets, we had contrasted quarter actually we saw very different level of activities. what worked particularly well was, for example, on the equity sti side, the business in the u.s. market it happens as a proportion of our business model, it's not the biggest part we saw on the contrary in europe lower commercial activity, probably in this environment where we lag a little bit in the transition to where it's a more normal rate policy, and also probably with the implementation

of mifi. our main assessment is that, again, compared with the high base last year, it's related to our business model we have a sharp contrast of activities depending on the activity >> you talked about the lack of volatility as far as european markets are concerned and the second is low interest rates in an environment where it doesn't seem like those two things will change, at least the volatility aspect has picked up in europe yet, how are you thinking about revenues and where you will make incremental revenues from? >> first of all, we are presenting that as part of our results clearly, we gain market share on global market activities from 2015 to 2017 for all products we are engaging in 2018 and fair to say beginning of this year,

all the events happened in the u.s. benefit of the tax cuts, the volatility on tech stocks, a lot of flows on these stocks the vix event. we had something probably lower. who knows going forward. i don't think it's something structural it's fair to say probably europe lags the u.s. for a few quarters in this normal saegs ization of volatility and rate level. and second the mifid, it's a question of digesting the rules, and this will probably come in months we have to live with that, but think forward and fundamentally, if i think about the next three years what we want to carry on shifting the business model, taking advantage of prime services activities which are growing, benefiting from even more synergies with client base, developing the corporate client base and all the service

affected saying, yes, it's a growing area it's a question of just implementing it and getting the fruit of all the projects we are implementing >> when you hear the likes of deutsche bank looking to reduce the size of their investment banking business, do you see that as an opportunity to gain market share >> of course, and carry on what we did the last three years, step by step, thanks to a good business model we have in europe a long-term opportunity. more capital markets are needed. it's a direct result of the regulatory framework again, it's not next quarter evolution, it might be a ten-year evolution, but we are one of the few european banks with clear credibility i'm happy when isee at the end of march in terms of bond

origination, we are number one or number two for corporate wealth things are developing well it's a question of patience in a very competitive market, but i think we have a lot of arguments to compete >> so some fighting talk there basically saying there were regulatory headwinds as well to deal with. mifid came into play in january of this year and volatility was pronounced in the u.s. but not necessarily in europe. that weighed on their business i thought his comments about getting extra market share were quite interesting. i also spoke to pnb. i sat down with the cfo yesterday, i asked about some of the highlights and also some of the challenges of the quarter. let's listen as to what he had to say >> when you look at the first quarter for pnb paribas, loans are up 3%.

this against the context of european economic recovery this environment we have to look at it within a market which was a bit lackluster in the first quarter of 2014. the bank clocked in 1.6 billion on the bottom line which corresponds to an 11.9% return on tangible equity if you look at the evolution, it's true you have to look through some of the evolutions in particular when it comes to taxes. i remind you in europe that taxes are booked in the first quarter for the full year. they are up for 80 million, and that weighs on the overall evolution. if we take out these elements and exceptional ones, the total bottom line is down 3.8% if we look at the intrinsics, there is good commercial activity if i look at domestic markets and international financial services, two retail activities, they have been growing well. they have been beating the

consensus. if you look at cib, cib has been executing its plan and continuing in grabbing market share and is delivering a pre-tax return of equity above 18%. all in all, if you look at the plan of pnb paribas announced last year, we're doing well on customer journeys, digitalization, costs, the first quart ser totally in line with the path of 2020 >> so the cfo saying loan activity has been healthy in france, up 5%, up 7% in belgium. so numbers on the domestic side have been okay but in this low interest environment retail business is under pressure their markets business was down 14.6% year-on-year so really we're not seeing very good investment banking numbers coming out of the french banks i think that's weighing down the stocks this morning. back to you. >> joumanna bercetche, thank you

very much. appreciate the update. first quarter profit at hsbc missed expectations dropping 4% to 4.7 billion the bank announced a new share buyback of $2 billion operating expenses rose 13% with revenue only growing 5.5%. speaking to cnbc, hsbc group finance director ian mckai described the bank's trading activity in the last quarter >> january was a strong month for us i think the numbers we were seeing slowed up a bit in the last quarter looking at numbers for the quarter, in tough trading conditions, the business did well overall activity for our global banking and markets activity was

reasonably robust for the quarter with just a couple of areas of weakness in rates and credit overall for the quarter, flat on the first quarter of last year if you'll recall last year's first quarter for ourselves and for the industry was particularly strong. >> swiss re topped first quarter expectations despite net profit falling 30%. the world's second biggest reinsurer said it earned more in the first quarter than it did for all of last year amid what it called a challenging price environment. swiss re gave no update on its stake talks with softbank. first quarter profit at generali rose thanks to a strong performance in the nonlife business the company's cfo says the results allow generali to approach the rest of the year with optimism.

lanxess shares posted a record quarter the shares popping 6.5%. the german company hiked its four-year guidance and expects earnings to increase between 5% and 10%. demand more than doubled in its specialty chemicals unit and results were fueled by the takeover of chemtura a quick update on norwegian air around the latest deal activity iag has lobbed in an offer for the company. it has been rejected from norwegian air today. the company says it received two separate proposals from iag. the proposals were reviewed and rejected as they undervalued the company. the board remains fully committed to generating a strategy to the benefit of shareholders the other factor was the statement from the qataris

recently around iag. they said they would support moves by the company towards norwegian air. the question is what happens from here and whether iag launches a better proposal the stock price is down heavily, down 8.8%. coming up, it's a boardroom showdown for elliott and vivendi as they go head to head over hell telecom italia (barry murrey) when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. we call that the golden hour. evaluating patients remotely is where i think we have a potential to make a difference. (barry murrey) we would save a lot of lives if we could bring the doctor to the patient.

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sunday, may 20th. only on nbc. telecom italia shareholders will vote on a new board later today. it's the culmination of a bitter boardroom battle between elliott and vivendi. willem is covering this story for us we've been tracking every public brawl that's been happening for weeks now. what is the latest >> we have about 40 minutes until the deputy chairman of telecom italia will open this up

and then we'll have a chance for different shareholders to ask questions of telecom italia management in particular we'll have a period where those managers will respond to those questions led primarily by the chief executive. at that point shareholders will have to -- if they want to follow up, tell the room who they're voting for in terms of the slates from vivendi and elliott put forward, we'll have an answer in the next few hours as to who will be on this new board. the big challenge really for vivendi is proving that their appointed directors, the people recently resigned and many of whom are put forward today are the right people to direct the company as it goes forward they don't have many conflicts of interest which is what elliott has been saying about their roles on the board elliott put forward a set of candidates, many of them big figures in the world of italian business that could lead to a bit of paralysis when it comes to decision making, and the real question is about the future of

amos ganish. elliott said they are behind him and they will keep him in the role if they do take control of the board. so the future of this company is in question today. >> willem, thank you one of the most exciting corporate stories for 2018 we have the europe team head and analyst of new street research james, what do you think will happen today >> thank you for having me on. as willem said, i think this will ab close battle between the two shareholders i think if i had to make a call, i think the elliott-backed board will prevail they will end up nominating ten directors on to the board. but the vivendi slate, if they come second, they will appoint dri drive directfive directors on te

seat >> willem eluded to three main actors the vote in milan is the perfect arena to observe some of the most important fault lines in share hold capitalism today, and they're eluding to three major passive funds own about 7% of the stock. in the past, we've not seen passives show their might so much but there's been public comments from larry fink of blackrock about the impact of profit is this the vote where we see the passives have the vote for corporate governance >> i think yes but also the vote last year it was actually much closer than i think people remember. last year the italian independent soes yassociation pp an alternative slate at that point vivendi won with 29% of the vote last year, 28.8% by some passive investors. given that we now have new

shareholders on the register like elliott, cdp, some other activists, along with passive investors, i think they will be backing the elliott slate here as a fresh reset on the company. >> i heard all sorts of comments about the impact of vivendi. you mentioned vivendi itself is an activist. others have said changes have already taken place and elliott is come ing plate to the party if you look at some deals done, one of the comments is vivendi has been milking telecom italia for some deals and there are contracts around content particularly where ballore's group or vivendi wins. do you think there's an argument to be had that ballore has been enjoying the benefits of profits and revenues coming from telecom italia >> yes some points that elliott is making in their proposals i think do have some merit to them at the same time they miss the bigger picture that this is a

company for 15 years that has been horribly underinvested in it's been backed by italian shareholders that paid out big dividends. the network knit lin italy went underinvested in to met bigger picture is vivendi has done a huge amount of good for this company they cut the dividend to zero as a controlling shareholder. they broke up this leverage hold and investment in the network went up. if they do lose today, they have been the unfortunate victim of politics in italy that is an activist investor in their own right. >> also bad pr, perhaps in there's been allegations around ballore and corruption taking place in west african countries,

timely for him >> hugely unfortunate in terms of the timing for him, negative pr, but i think this is a culmination of a two-year struggle they had as a french investor in italy. generally there's been friction between themselves and the government a lot of it is unwarranted in what has happened to the company. so i think this is the culmination of two years of tension between the french and the italians here. i think, you know, the risk is vivendi could lose out here. i still think that stake is hugely valuable. they will be a 20% holder of ordinary shares. >> if they lose, will vivendi stock drop or rise >> i think there's time for mti here that won't have impact on the vivendi shares we're bullish on the restructuring story around

broadband. the question is what does vivendi do with their stake around telecom italia. >> james, thanks for joining us on what has been a fascinating battle coming up on the show, could china and the u.s. be close to resolving their trade spat the latest when we return.

welcome to "street signs." if you're just joining us, i'm karen tso. these are your headlines shares in socgen drop following a sharp fall in first quarter trading revenues, but the bank's ceo tells cnbc europe's lack of volatility is to blame >> fair to say europe lags the u.s. for a few quarters in this normalization of volatility, and rate level and second, the mifid, it's digesting the rules. >> shares in europe's biggest bank, hsbc, fall after first quarter profit comes in below

expectations, despite announcing a $2 billion share buyback >> the u.s. and china reached some agreements in their trade spat, but big issues remain as the two sides agree to maintain an open dialogue in an effort to solve their dispute. and the dollar stays near four-month highs ahead of the u.s. jobs report emerging market currencies stumble with the argentinean peso near an all-time low. time to check on the u.s. trading day ahead. investors are closely watching the date to today in the u.s yesterday another seesaw intraday session the dow at one point down about 394 points, close to 400 points at its low before closing effectively flat so far indications are for a slight nudge into positive

territory. the payrolls report, if there's a break on the wages component, that could be market moving today. stand by for the friday session state side with all that happening later on today, let's look, the french market has been underwhelmed today by bank reports. socgen and bnp paribas disappointing on revenues. those two stocks dragging the french markets south we are still seeing gains on the boards for the uk, german market and italy. i would say the dax has given up territory in the last 30 minutes of trade here's a look at some stocks moving in europe ferrari shares hit a record high after a sharp rise in first quarter core earnings. it cited strong sales of its 12 cylinder models. pearson's said it had a good start to the year. the educational publisher backed its full-year outlook and said

it was on track to deliver 300 million pounds in savings by 2020 the stock is up 4.7% and to iag today, and the latest is that the stock is also bouncing in the early part of the session. shares soaring after posting a 75% jump in first quarter profit they benefited from a 58 million euro net foreign exchange benefit. norwegian air has rejected iag's takeover po posal saying it remains fully committed in the strategy shares of airfrance-klm lowered the 2018 profit expectations the first quarter loss broadened to 118 million euros as overall unit costs were pushed up a little more than 2%.

eduardo lucabari joins us. welcome to the set >> good morning. >> let me ask you about some of your outlooks. fairly fascinating views you have and wide views for what 2019 could hold. >> i think this year started with a consensus view that 2018 will be a year of economic growth, but that could come to an end in 2019 we're saying this year that there is a likelihood that the global economy continues to grow this year and next but we are at a late state of the cycle. a lot of worrying data points are out there. therefore one has to invest with caution from this point forward. >> does that mean we're at peak earnings this is a worry flagged by caterpillar in the states, clearly a market giant it has raised concerns that we're approaching the end of the cycle. the high water end for earnings has been hit do you think that's the case when you look at sectors

>> i think you will still see earnings growth this year. it's hard enough to see that when you think about what the u.s. tax plan will do to earnings of small and mid caps or on the back of numbers, if the u.s. delivers 23% growth, it's hard to see periphery not continuing to recover, or asia or japan which is 15% above earnings growth not to continue to deliver >> let's get into some of your calls. overweight value why value over growth and quality? >> there is a very consensus view that today you have to buy growth and quality that's been a concern since not just yesterday but for the most part of the last decade. i think it's bay in tecause in t decade you had risk aversion

which has been big there's been a skew of investors trying to find good, quality growth at companies. the problem is today if you take for example european stocks and you break them down, the top is at 50% premium to the historical average valuation when the bottom is just in line so you are as an investor today rewarded for trying to think about value. that top part of the market just has no upside left >> when it comes to the different markets across europe, you say remain overweight eurozone versus uk uk has been a tough market it's been popular with some investors for dirnts reasoffere around brexit. the latest from your point of view is leave the uk aside why is that not one of your favorite trades? >> that's a call where we have a contrarian view right now. it has been consensus yview to e

underweight in the uk. for some people, if you look at small returns in europe, the uk outperformed last month. we're saying stick to the year-to-date underweight value we have. it's still performing and for good reasons when you look at the uk, you see the small and mid caps with a big rally. it is the most expensive universe in the world. you have growth deceleratindece you have brexit knocking on the door against that you have a periphery story of early stage recovery of much better growth and at a discounted evaluation >> a couple other calls. overweight materials, and you're also upgrading staples to overweight in the uk n that particular market. that's one area you like why these calls on the overwaite side >> when it comes to sectors, we said all year this is not where we think investors need to be looking for alpha. at the end of the day sector

allocation is a macro call i'm making a macro call with all the bullet points on the table, and that's risky if you to think about sectors, think about fair trades. in a late cycle economy like the uk, like we just described, do you want to be in consumer discretionary or staples staples gives you a better value. in energy, do you want to be more exposed to enp or energy services we prefer energy services to energy >> thank you for fleshing that out for us let's move on to tech. twitter asked its 313 million users to change passwords after a glitch caused some to be stored in readable text on it's internal system.

jack dorsey says the bug has been fixed adding there was no indication of a breach by anyone arjun kharpal joins us that's one thing as soon as i turned on my twitter i saw an update from the company saying this is what has gone wrong. i was like not another data problem. >> we'll run through what's happened when you sign up to twitter, you set your password, they store it in a random jumble of numbers and letters which nobody can read, but you have to remember, i think generally password hygiene is terrible. so people who may have been using that on twitter may be using it on other accounts that's a big issue here, around that that's why twitter is urging people to change the password. they said it's not a hack. it's not a breach. it was an internal bug, which they managed to find that's how they tried to calm

down some fears around this story. it does come at a time when we're all sensitive about data following the facebook and cambridge analytica scandal. that means regulators will be more focused consumers are more aware about what's going on. it doesn't come at a great time. >> it's surprising they storeded some of the information and the passwords. you talk about hacking that gives you one potential place to hack if you are that way inclined, which tells you about people using the same pass wro word across a number of different accounts >> some of these companies that get hacked, these passwords end up on the dark web or wherever and they can be used for other sites. it's industry standard to keep these passwords, but in an encorrupted foe

encrypted form reuters reported these passwords were available for months. if we think about the general protection regulation coming up, one provision under that law is you must report a data breach within 72 hours to the data protection authority it's questionable if this was a breach potentially it could be under the law, that's something these companies have to think about. on that report of gdpr, we will sit down with andrus ansip at 14:30 cet to ask about what gdpr means for many of these tech companies, and whether u.s. companies are ready for this massive shakeup in law >> just because you're hacked today doesn't mean that you're going to see implications right away it could be two, three years where some of those who have the information will try to revisit your accounts. >> if you go on the dark web and where some of these data sets are being sold, just lumps of

passwords and user names being sold for peanuts that's how peoples accounts do get hacked >> change your password today is the message. thank you very much. coming up, the u.s. and china resolve trade issues, but big problems remain. more coming up after the 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! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. and it's time to get outside. pack in even more adventure with audible.

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after two days of high level meetings in beijing, u.s. and chinese officials say they reached agreements on some areas of their trade spat, but they still have relatively big issues to solve the two sides have reportedly agreed to maintain close communications on relevant concerns, and have committed to solving their problems through dialogue they apparently exchanged opinions on expanding us exports to china and two-way investment as well as the protection of intellectual property. washington has reportedly asked beijing to reduce its trade balance immediately and cut the

trade surplus with the u.s. by 2$200 billion by 2020 according to a document seen by the "wall street journal." the delegation also asked china to halt subsidies for advanced technology and specifically asked china not to target u.s. farmers or agricultural products or retaliate against u.s. restrictions on investments from china. tony fratto joins us now thank you for joining us let me get some reaction from the latest comments that there has been consensus on some areas of trade what do you make of the progress in talks so far? >> i think it's a fairly normal start to these kinds of bilateral dialogues. we saw a lot of them going back to my time in the bush administration, and even the obama administration this kind of dialogue on this set of issues, the set of issues has not changed much

what was a change this time is both sides brought tariffs to the table and the threat of tariffs and the threat of a trade war that forced them to the table at this point. they're at the table with that threat hanging over it and looks like they're going back to the same ground where this kind of dialogue could take place. i think that's a positive development. the best thing we could have expected is that they go back to the table and initiate real discussions. the market should appreciate that >> you make the point that the chinese will be closely paying attention to what happened in japan and south korea and south korea we know that instead of taking steel tariffs they agreed toquotas and greater access to the market why do you thiyou think these a relevant to the chinese? >> the chinese are smart and pay

attention to nafta as well and our relationships with europe. they look for signals for how that will inform negotiations with the united states what they saw in the case of korea, the american's treatment of japan with steel tariffs, even with strong allies, the united states forced some concessions, and then went out and crowed about it. talked about the other countries backing down to american threats of tariffs the chinese don't want to be treated that way you know, even humiliated for having to make a large concession to the americans because of the threat of tariffs. so any concessions from the chinese will happen over time and they will want to put the united states in position to exchange concessions what's not clear to me right now

and i don't think is clear to the chinese is what kinds of concessions are the americans willing to make on any of their longstanding list of trade grievances with the united states remember, these are two-way negotiations >> this is different when it comes to china you say allies, but the reality is both are exporters. the chinese have their own security plans in place, a strong force when it comes to geopolitics and a strong domestic audience. do they have an upper hand going into negotiations with the americans unlike the south koreans and japanese >> yeah. that's exactly the right observation, karen they have -- the united states does need china to help solve the situation in north korea there was a reason that -- when we started the u.s. economic dialogue back in the bush

administration with hank paulson, the idea was to segregate the economic discussion from those security discussions because we recognize that we needed china's pep on security wanted to keep it separate the mick discussions are different. it's a very asymmetric negotiation relationship between these two countries now. we know that there are political pressures in china they do want to see their growing economy. they don't want to see it disrupted by a trade war but it's much more immediate in the united states. p president xi is not worried about midterm elections, he essentially just became the chinese leader for life. they feel like they have time on their hands that the americans may not have i think you're right it's an asymmetric negotiation right now. that's why i think it's going to take more time >> let's segue off the trade negotiation

negotiations, and we have data coming out on the dollar today people are watching trade talks but also watching the jobs report, the wages component today. what do you think the market is setting up for what will be relevant? they expect a bounce back from the more tepid number in march it was a solid number. if you look bred of thi breadth of this expansion there are no signs that the u.s. economy will tail off on job creation we still see some workers entering the work force. not seeing huge pressure on wages. we would like to see some pressure on wages.

will we get to a tightness that will inform the fed and their future fomc decisions? that's what the market will be looking for today. >> tony, appreciate the time tony fratto with us on the show. telecom italia shareholders are set to vote on a new board let's get out to willem for more in milan >> i talked to simon gillam from vivendi. i asked him what today meant for viven vivendi. >> for vivendi, this is not the end game it's not the end of the match today. whether vivendi's laslate wins loses, they will still have either ten members on the board or five members on the board in any way vivendi is there for the long term.

live live is vivendi is a long-term industrial shareholder and today is one step in the process if vivendi doesn't get the slate it wants today, what does that mean for its role in telecom italia if vivendi gets five seats on the board n that case we would be vigilant in making sure the long-term industrial plan is held in place and that the elliott slate doesn't dismantle as we know they want to do >> one final question. we heard in the last few days really that elliott is now behind the ceo, saying they would back him regardless. how important is he from vivendi's per spktispective to t long-term plan >> it's important he stay at telecom italia he's a smart ceo it's important for italy, the

country, that he stays in that position >> do you have time for one more one criticism for elliott is that the directors appointed in the past have had conflicts of interest what has been vivendi's response and what is vivendi's response to that claim? >> there is no conflict of interest vivendi is a stable shareholder there for the long-term and we're acting in the pure interest of all shareholders one reason we have not gone rob buying everywhere, we say there must be shareholder democracy which is why we pushed for this meeting today. >> simon gillham there talking to willem. i gather from some comments i heard from investors that this might take up for four hours to be known what is the mood like in the room it's been such a fierce battle borne out in the press how civil is it in the room? >> this has been a central focus of the italian business

community and politicians. one vote we will closely watch today is that of cdp, the italian government's investment arm. they have a 4.8% stake in telecom italia they would be voting alongside elliott for these big italian investor names, whether they vote in that way is a crucial thing. >> willem, thank you very much we're tracking the wires today for reaction as telecom italia stock is on the back foot ahead of that vote being cast. i'm karen tso. "worldwide exchange" is up next. enjoy the weekend.

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i'm dominic chu, it's 5:00 a.m. and here are your five at 5:00 breaking buffet news berkshire hathaway buying an additional 75 million shares of apple in the first quarter warren buffett talking about that purchase to cnbc. we have more on that straight ahead. a u.s. trade delegation is calling for china to slash its trade gap with america as talks wrap up in bayieijing nike ceo mark parker calling an all-hands meeting to apologize for corporat