i'm joumanna bercetche these are your headlines ending the week on a high. european equities in the green after chinese stocks stage a laterally, partially recovering the week's trade related losses. after nine hours of negotiations, eu leaders strike a late-night agreement on migration. angela merkel welcomes the cooperation, in particular with italy. >> translator: so i would say overall we are satisfied it was a long negotiation.

it tells us the timetable, which means today italy is no longer alone. the fed details critical deficiencies at deutsche bank's u.s. unit which flunks the latest health check. cnbc speaks to christian sewing later today. and novartis announces it will launch a $5 billion share buyback sending shares higher. good morning chinese stocks rebounded closing the week in positive territory after a selloff this week which means the shanghai composite and the others are set for their worst monthly performances in two and a half years let's get more from nancy hungerford

>> a different picture heading into the weekend for the greater chinese markets. green across the board quite something considering the dips we've seen over the last few days the buying did pick up after the lufr lunch break. look at the picture. shanghai composite higher by 2.2% shenzhen is higher by 3.3% both of these markets were in bear territory when the shanghai composite slipped into bear territory on tuesday, closing at 2.844 just about, so we're just above the initial level we were talking about. keep an eye on that level, it's around that marker the shenzhen is seen as vulnerable to the current trade and investment tensions between the u.s. and china today it did get a rebound, higher by more than 3% that's its best day in two years. looking at the hang seng, it didn't quite get into bear market territory, it has had

selling over the last couple of days the hang seng higher by 1.6% the attention has not all been on the equity space. let's look at the yuan it's set for the biggest monthly fall on record first we're looking at the monthly performance of the markets. we showed you the rebound today. look at the month. a reminder of how bad it's been. the shenzhen was off 9%, the hang seng lower by 5% on the month. let's show you the moves in the currency a lot of attention on the yuan we are looking at a stabilization. we are looking at the u.s. dollar stronger against the chinese yuan at 6.6244 you can see with the move in the dollar, going all the way up here over the monthly basis. >> what's interesting, nancy, you started off talking about the balance in asian equities, chinese equities

my question is what caused this to turn around you did hint that there may be talk of policy support getting involved in equity markets what are you hearing from analysts >> it's hard to tell some analysts speculated on that any time you see a rebound of this magnitude after so many days of selling, people start to wonder it was picking up in the afternoon trade going into the weekend. but you could also make the case that there was some bargain hunting going on out there as well i think, too, many are wondering if the currency moves will stabilize. that has unsettled investors here so much of the discussion about whether or not the chinese government would look to yuan devaluation as a tool when it comes to fighting trade tensions with the united states i had several strategists, investors here in singapore telling me they're not betting on that. that has such negative consequences when it comes to capital outflows and when it

comes to the big corporates in china. >> absolutely. thank you for bringing us the latest there investors are looking into whether china may weaken its currency in response to trade tensions head to cnbc.com to find out why such a move could be ill-timed let's look at how the picture for europe markets looks. we were talking about the bounce back in asian equities we see a picture of health in european markets stoxx 600 is already up more than 1% in early hours of trading. let's get into the individual indices. let's get a feel for what the picture is like there. all the major indices are trading up more than 1%. ftse mib, italian index leading the charge up almost 400 points already. and we also have xetra dax up 1.5% i think what's interesting is on germany specifically, even though we're up 1.5%, germany is still down 2% on the week.

almost down 5% on the year so, a bit of a relief rally in equity markets today for the year the picture is still quite negative switching to sectors, leadership this morning it coming from the tech sector and basic resources. on days where we have seen relief rallies, driven by the trade rhetoric, technology has the highest beta we're seeing that basket outperform and relatively underperforming, food and beverages, oil and gas and media. generally the picture is still quite positive i should point out that in technology, yesterday we were down 2.5% in that basket today up 2%. so we have not fully yet compensated despite the green picture we're looking at big news out of deutsche bank the u.s. unit failing the u.s.

stress test. the reaction broadly speaking in european markets is pretty positive because of the picture of health in other banks you can see generally speaking in light of everything else that's rallying, european banks and some key names having a good session. let's talk about deutsche bank the u.s. arm has failed part two of the fed stress test this after the central bank noted widespread andciencies in capital spending controls. in a statement deutsche bank said it is engaged with regulators and it working to improve that part of the business the bank passed the first hurdle which tests capital levels during a severe recession. shares in deutsche bank fell to a record low earlier this week cnbc speaks exclusively to deutsche bank's new ceo, christian sewing later today. european leaders in brussels brokered an agreement on the

migration crisis after nine hours of talks despite initial reservations from italy. speaking after the marathon talks, the italian prime minister said that from today italy is no longer alone the text of the european coun l counsel's conclusions urged to prevent uncontrolled migrant flows. they are looking for third party migrant centers outside the eu and countries will also share responsibility for migrants rescued at sea while clamping down on smugglers. speaking at the conclusion of the talks at around 5:00 in the morning, french president emanuel macron hailed european cooperation. >> translator: just a word to say after nine hours of talks and work, a deal has been reached. it's good news for france. it's the fruit of combined work and european cooperation that won as opposed to a national

decision that would have been neither efficient nor lasting. >> willem is out there in brussels i hope you slept more than mr. macron generally speaking, there's a phrase that if everyone is happy with the outcome, then possibly someone has made too many compromises. who has made the compromises here >> i think that's a difficult question to answer at the moment a lot of this is a series of guidelines there's no action being taken, no money passing hands yet if you look at the details, the italians got a lot of what they wanted there was a ten-point list of proposals. a number of those in this deal seem to have borne fruit, in particular the idea of spending more money on libyan coast guards, sending more money to stop migrants from traveling

from north africa into italy, which has been a major bone of contention for lega, one of the coalition partners in italy. in terms of angela merkel, the political ramifications are still unclear, but it does seem to strengthen her hand going into conversations with the head of the csu, she can go back to berlin saying she achieved something from the summit. what that is is slightly unclear. here was her response this morning after the conversation ended. >> overall i believe it sends a good message that we came to a joint decision after intensive discussions on a thing that's probably the most challenging for the european union i'm optimistic after today we will continue to work, even though we have a lot to do in bridging the different points of view >> just to give you some details. they'll strengthen the libyan coast guard. spend a half billion euros in african countries trying to

strengthen their economies, education, healthcare systems. the eu/turkey deal has been held up for a long time as officials that could be a model. brussels perhaps paying ankara to hold on to migrants they will insist on halting that migration flow and asking the turkish authorities to stop further routes whether by land or sea from opening up we've seen increasing my fwraigt flowing from morocco into spain, and both of those will get more logistical help. >> translator: i think it is good news for spain in the sense that the conclusion from the council recognizes the intensity of the flux of migrants in the western mediterranean. it recognizes the work spain as a company is doing to tackle the migrant flux, and the council

promises to organize the flux of migrants that arrive to spain as well as in the countries where migrants transit, such as morocco. >> all those measures are about external borders, strengthening those. that's relatively uncontroversial. what will be more challenging is finding third countries under this proposal where people can be processed once they've been picked up by search and rescue vessels and decisions about whether they are legitimate asylum seekers or whether they are economic migrants, illegal migrants who should be sent back to their country of origin those that do reach european territory will have to be dealt with by processing centers inside european borders. the question then is about who will volunteer to host those centers, how many migrants they will accept and who they would pass them on to as part of

bilateral agreements >> i want to draw your attention, willem, that the italian interior minister said they obtained 70% of what italy had been seeking in the eu migration talks. he put a number on it. that should also potentially be enough for mr. sehoffer as well. do you think the worst is over for chancellor merkel? >> there's nothing in the agreement that ends the dublin regulation that's the rule whereby the country that first takes an application from a migrant or asylum seeker is the country in theory responsible for them. what sehoffer has been trying to do with merkel is trying to stop those from entering into germany. so it will be up to germany and

italy as to whether they will be accepting those registered elsewhere. so in theory, merkel can sit down with sehoffer saying you are getting some of what you want, we don't need to close that border and threaten the long-term agreement. >> we could expect to see more of these summits taking place in the next couple of months. thank you very much. british prime minister theresa may has warned eu leaders they're putting the safety of their citizens at risk if the block fails to be more flexible on brexit this after coming under severe pressure from her european counterparts over its progress the dutch prime minister and jean-claude juncker blamed the uk for sending mixed messages pointing to a divided cabinet. speaking after the meeting, may said she hoped to pick up the pace in negotiations >> the decisions on migration are important. on other topics, on brexit, i've been stressing that we want to

have a deal that will work for the uk and european partners and if we work together we can support each other's prosperity an security. we will be publishing our white paper shortly and i want to see negotiating accelerating and intensifying >> get involved in the conversation if you have views on the eu summit or anything we discussed, you can e-mail us. the address is @streetsignscnbc and you can also tweet us cnbcjou. a look at oil, there's been a bit of a bounce. we have trading through $75 and up to $78. we'll talk more about that when we come back m 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.

welcome back to "street signs. novartis announced it will spin off its alcon eye care business the swiss drugmaker expects the

deal to be finalized last year novartis will also use funds from its consumer health joint venture from gsk to fund a buyback program. bae systems has won the right to build nine warships for the australian navy. the contract is worth $25 billion with a design for the new ships based on bae's type 26 frigate. the project is expected to create 5,000 local jobs over 30 years. production will commence in 2020 shares in sharp have surged after the japanese electronicsmaker ditched a $2 billion share issue. it cited increased market volatility resulting from trade tensions earlier this month sharp announced the plan saying it would use the cash to buy back shares from lenders. shares in sharp dropped almost 20% since the announcement

president trump has praised foxconn for investing $10 billion in the united states speaking in milwaukee, president trump said that there is no better place to build, hire and grow than the u.s. trump also had words for harley davidson insisting that the motorcycle maker should not move production out of the united states earlier this week the company said it could shift production away from the u.s. to avoid tariffs. global stocks have seen the biggest loss of investor cash since the financial crisis global equity funds have seen outflows of 12$12.4 billion in june, the highest level since october of 2008. the firm cites a slowing global economy and fears of a trade war as weighing on investor sentiment. dws is keeping a constructive outlook for the second half of the year saying that the global economy is growing steadily.

stuart kirk, head of research from dws joins us to discuss so we hear the likes of imf, various dark clouds on the horizon. do you not see any dark clouds on the horizon >> plenty on the horizon, if we're late cycle you know there's probably a recession a couple years down the line late cycle can be extremely profitable for investors if you remember investing in stocks in '88, '89 >> the music is still going on you want to be partying in this last session >> in some sense it feels bullish in the sense that technology is still performing well there's a narrowness in the performance of the equity market rates are still low. on the other hand valuations are stretched. like the late '90s they went from very stretched to very, very, very stretched >> can you talk about how you're actually ail gallocating your

investments among different assets how is the distribution? >> if you think inflation is about to tick up, you want to have exposure to commodities that's what we do. we are overweight most equity markets, a bit less in the u.s., more so in europe. less in japan. quite constructive on emerging markets. fixed income we're more subdued. we think yields will drift up slowly and that's the sort of broad market we are also bullish on alternatives we think as long as rates stay low, there's lots of opportunity in real estate, infrastructure >> i'm curious to hear your views about europe you said you're more overweight europe than you are in the u.s it's been a tricky year for european equities, just looking at the german index, we're up almost 2% today, but still down for the year >> it's weird. for a late cycle in the market >> are you not concerned about the tariffs and the various

trade war rhetoric that's been bounced around now clearly europe is right in the middle of that we have china, and europe, german exports will be hit >> we think there's a difference between a bilateral trade dispute and a full on trade war. full on trade war equals a percent and a percent and a half of growth. if it stays tit-for-tat, it's probably not such a big deal markets have not performed well this year in terms of equities and europe the valuations are just more compelling in europe and emerging markets than in the u.s. that explains our relative weights. >> you think in the second half of this year we could see recovery in european equities because i underpinned by what? solid growth fundamentals? >> yes the evaluations look better. "b," it feels late cycle in the sense there's momentum if you remember what late cycle felt like in the late '90s, m&a

was picking up, people were buoyant, but nothing like a euphoria you normally see towards the end of the cycle for me it feels like a pause a bit like we had in 'the 8 w9 a era, so the question is when do you time your final trade. >> you said you were overweight commodities, expecting a pick up in inflation we had the opec meeting last week for you, has that changed how you think about the proportion of your investments that you want in energy >> yes we don't think oil prices will go up much more from here. but there are a number of other commodities that have not performed as well. we also have exposure to private equities and equities that have exposure to commodities. >> just going back to specifically oil, you think that around here, just picking on the price of oil, brent trading

around $78, you think we roughly end up around this range >> here or slightly lower. >> you mentioned a couple times already that it's beginning to look like the end of the -- late '90s potentially a couple of years down the road things could start to bite again. do you have any tail risk positions in your portfolio that could start to provide you with some protection in case things turn sour? >> multi asset portfolios have fixed income exposure. we do defensive assets we have a whole bunch of value funds in our range, which will outperform in that situation and that's really the best you can do everything will fall in an absolute sense one risk to that scenario is more like in '94 if you think productivity is going to go up in the u.s. this

bull market could run for a long time there are good arguments to say that could happen. >> what do you make of the recent dollar strength does that continue into the latter half of the year? >> we are one of the few people to be dollar bulls for good or bad it hit our target quickly we're at 115 we don't think there will be much move from here, but we're more bullish on the dollar than most we stick to that view. >> thank you for joining us this morning. that was stewart kirk. european union leaders are arriving ahead of the summit in brussels today having secured a deal in the middle of the night. we'll bring you live pictures when they come in. doesn't look like anyone is just there yet. we will keep you posted on when they do show up. coming up next, deutsche bank fails the fed's latest stress test. we discuss what went wrong after this break

welcome to "street signs." i'm joumanna bercetche these are your headlines

ending the week on a high. european equities in the green after chinese stocks stage a laterally, partially recovering the week's trade-related losses. after nine hours of negotiations, eu leaders strike a late-night agreement on migration. angela merkel welcomes the cooperation, in particular with italy. >> translator: so i would say overall we are satisfied it was a long negotiation. it tells us the timetable, which means today italy is no longer alone. the fed details critical deficiencies at deutsche bank's u.s. unit which flunks the latest health check. cnbc speaks to christian sewing later today. eyeing a spinoff novartis announces it will float its alcon business and launch a $5 billion share buyback sending shares higher.

we saw a bounce in u.s. markets towards the close yesterday and that move continued overnight. chinese equities bounced more than 2% and the mood in europe is positive. all the major indices are trading in the green lower than a half hour ago when we looked at this. still very much looking to recuperate the losses of the trading session. crucially germany is still negative on the week still down 2%. today it looks like the mood is more positive on the announcements coming out of the eu summit. let's look at foreign exchange the dollar hit the highest level in 11 months yesterday

it's on pace to break a five quarter losing streak. it's been a strong quarter we have euro/dollar up a half percentage point this morning. that is a reflection of some positivity in europe slightly weaker dollar there dollar/yuan, it seems like it's pretty moderate. the moves there. quick look at u.s. futures, looks like everything will open up more solid. dow seen opening up about 175 points higher. nasdaq up about 54 points. we have some data coming out of the uk gdp just came out. we have the first quarter gdp that has come in at 1.2%

unchanged from the first estimates. no real changes there on this number that's come out we have a revision to the fourth quarter gdp, reviewed to 1.3% from 1.4%. so nothing major, fourth quarter revision is slightly lower as far as the uk gdp is concerned we have seen a bounce in sterling up about half a percentage point already. today we were talking about euro the theme has been that of slightly weaker u.s. dollar versus its counterparts. >> and now to some banking news, caixabank rallied after selling its real estate unit talking about caixa being at the top of the stoxx 600

let's look at how other names in spain are also looking it looks like it will be positive just waiting for them to bring that up. that's the picture for spanish banks. caixa up 5.6%. santander is also up bbva is also up 2.7% a good morning for the banking sector this as deutsche bank's u.s. arm failed part two of the fed's stress test after the central bank noted widespread and critical deficiencies in the lender's capital planning controls in a statement deutsche bank responded saying its constructively engaged with regulators and it working to improve that part of the business the bank passed the first hurdle which tests capital levels during a severe recession. shares are trading higher despite the result deutsche bank trading up about 3% already the fed put conditions on

goldman sachs and morgan stanley saying they cannot increase capital distributions. state street was told to improve its counterparty risk management and 34 other lenders including j jpmorgan, citi group and bank of america had their capital plans approved joining us on the line to discuss is colin mclean. good morning to you. >> good morning. >> i wanted to pick up on deutsche bank specifically the fed has had issues with the deutsche bank's u.s. unit for years. how worried should the markets be about deutsche failing the test overnight >> i don't think the market is particularly concerned about this it was expected. these are tougher tests than the eu applies they are fixable the cost of this is in the millions of dollars rather than hundreds of millions it won't be a huge fix

>> what do you think should be the number one strategic priority right now for mr. sewing he has a huge job on his plate the stock dramatically underperformed down about 45% year to date. what does he need to focus on? what's the number one thing he needs to focus on? >> i think he is not himself a fan of the investment banking business she might strengthen his hand and convert this into a more conventional bank or certainly emphasize the mainstream operations that it has it is not getting a value in the stock market for its investment banking capital. i think his plans would be well received by investors if he could execute. bring banking operations into reducing risks and building up strengths and more conventional

business >> stay with us. i want to draw attention to viewers that some european union leaders are arriving ahead of today's summit yesterday was day one where they discussed migration and security, today they look to address totaining to brexit and eurozone integration. angela merkel was just seen walking in they had a late finish yesterday with mr. macron giving a speech at 5:00 in the morning we will keep you posted on more arrivals as they happen. sticking with the banking theme here how much time do you think investors will give mr. sewing to turn this story around? >> i think he'll get a couple of years to start showing what can be done. he may need to raise more capital for this i think investors probably

likely like the approach he's got. i think they will give him time to implement what he has planned. >> some investors are inp inp inpatient. do you think this will continue on >> i think when the new chief executives get clear support for them, the chair may be in a more difficult position, but i don't think that's immediately the case i think people will focus on what the strategy is to turn the bank around. a lot of banks have been doing

fairly badly recently deutsche bank, but it's not in a unique position,so i think it's not done as much as some others to address the financial crisis problems and bring its balance sheet down >> i have to leave it there. thank you very much for joining us today and bearing with us while we deal with pictures of the e ushg leadeu leaders arriv summit let's listen to what some have to say >> come back next monday [inaudible question] >> no. the eu residents in the uk and uk citizens in the eu has been clearly agreed under draft treaty you have to read it. thank you. >> yesterday was all about migration.

today we will hear more about brexit we'll keep you posted on more arrivals when they happen. belgium have beaten england to be the top spot of the world cup match after a much-changed three lions team succumbed to a 1-0 defeat colombia and japan sealed their qualification as the last 6 l16e lineup of the tournament is finalized. adam has more. >> england and belgium were vying for top spot, or befoweree eyeing for second place. in the end it was 1-0 belgium. the former manchester united winger had the only goal of the game, januzaj. so belgium topped the group to face japan

england maybe not too upset finishing second because they play colombia in the next round, but then in the perceived easier side of the draw gareth southgate disappointed to lose the game. he made eight changes. roberto martinez made nine changes. gareth southgate pleased with the way his side have been playing up until this point despite that defeat. >> sometimes i think you have to look at the bigger picture make decisions that, okay, might in some corners be criticized. but i think everybody understands and certainly everybody in the dressing room and in our group understands what we tried to do. >> so here we are. the completed last 16 draw for the world cup. as you can see, england over there in the bottom corner, they will face colombia in the next round. last time they played each other at a world cup was 20 years ago, france '98 david beckham on the score sheet for england in a 2-0 win

they have not won a turn the knockout game for 12 years, and only won two in the world cup since 1990 elsewhere in the draw, uruguay against portugal that looks like an atrump administration an attritional affair. and then we have france and argentina the winner will play portugal messi against ronaldo is a possibility. this side of the draw, ten times this side of the draw has proved to be world cup winners. five of those are brazil they play mexico mexico, they have had a tough time in knockout football in the past six times in a row they've gone out in the last 6 sta16 stage, now they face one of the favorites. the perceived easier side of the draw, maybe spain and hosts russia going up against each other in a very, very impressive

looking croatia side as well >> absolutely. getting into crunch time adam, come join me so we can discuss more you said in the past momentum is a positive thing do you think that will impact the positive couple of games that the english have had? >> they started the world cup very well. two games against panama and tunisia. that team is still largely unbeaten there were a couple of players, jordan pickford and john stones played in the england team that did lose yesterday, but the majority of the players who played in the first two games have not lost in the world cup momentum is still with them. yes, the argument is out there that they should have gone out to win every game, because of the momentum they had to beat belgium, and then japan. then if they were to face brazil in a quarterfinal, then they

could have had that momentum that way harry kane and raheem sterling, and kyle walker, they have not lost a game at the world cup so every chance they can feel positive colombia, very key to point out, they may well be without one of their key player, james rodriguez who came off their 1-0 win against senegal yesterday. >> somebody tweeted me and made a good observation that only one latin american country is out now, that's peru so it looks as though there's a decent probability that we could get a latin american winner. >> like i said five times brazil have won the trophy, twice uruguay have won the trophy. argentina have won it twice as well lionel messi, they say he needs to win a major tournament -- world stage title to really be seen as the best of all time yes, there is. interesting think no african side in the knockout stages of the world cup for the first time

in 36 years. they can count themselves unlucky, senegal, going out amongst the fair play league >> that's unfair that was the yellow cards. >> yeah. they can be costly >> adam, thank you for that. it will be an exciting week for the world cup. look forward to chatting with you next week. coming up, presidents trump and putin have agreed on a date to meet next month more on that key summit after this break for your heart...

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 to the show donald trump is reportedly speaking to advisers for possible replacements for white house chief of staff john kelly. kelly, who has been in the job nearly a year, could step down this summer. sources suggest the top two candidates for the job are white house budget director mike mulvaney and nick ayers who serves as chief of staff for mike pence both trump and kelly deny the reports. it is a date president trump and president putin are set to meet in

helsinki, finland, on july 16th. officials from moscow and washington expect the leaders to discuss u.s./russian relations along with syria, iran and ukraine. i'm happy to say joining me i have brian cast, fellow from lse, and also james pettacukas james, thank you as much for joining us i know it's early for you. i would like to start with you, james. specifically on this trump/putin summit ostensibly what mr. putin will be looking for is some removal or lifting of the sanctions. so it's clear what russia will be looking to get out of this. what will president trump be looking for? what can be perceived to be a win out of this summit if it does happen? >> that's what the american agenda for this summit is, it's been unclear

it's an odd time to call it. there's been some talk that the president will raise the issue of russian interference from the election certainly if that was an issue and the president took a strong stance, there was some sort of agreement that would be a big win for the united states. of course the president has been saying there's been no interference there has been a dismissal of that idea. foreign policy people wish there was a certain agenda the lack of agenda is the news for the united states. >> brian, we had this historic summit with north korea. the upcoming summit with russia about to happen. what does this mean for the united states relations with traditional allies >> it's a striking political moment that's terrible for the

west trump is giving serious concessions in the kim jong-un summit without concrete concessions in return. the same may happen for russia vladimir putin's goal has been to splinter the transatlantic alliance, drive a wedge between europe and the united states he's failed to do that until trump. now trump is treating america's democratic allies in europe far worse than countries like russia by imposing tariffs and costs on them while praising vladimir putin. that creates an emboldened kremlin. after they internefered in the 2016 election, after annexing crimea, the last thing a u.s. president should do is meet and give legitimacy. >> as james is pointing out, there's no clear agenda at this point in time. james, coming back to you, another thing that's interesting is that despite everything that's going on, president trump's popularity has been going up

it's at 42% now. what do you think this means does it have any implications for the upcoming midterms? >> you always like to negotiate from a position of strength, whether going to summits, or whether you're negotiating trade deals or going to election the presidential approval rating is a luhuge factor on whether h will hold the house and senate in november. when you have an energized republican base, you will be more energized because of the supreme court pick you have an economy with the unemployment rate continuing to drop wages appear to be accelerating, economic growth is accelerating. that's a strong hand to be going into a midterm election which not so long ago people thought there would be a blue democratic wave now the wave perhaps is not as strong as what people had

thought. >> reports suggest that it would be easier for democrats to regain the house but not necessarily the senate >> i think it's favorable for the democrats to take the house and not the senate there's a massive enthusiasm among the left in america right now. i think it's important to point out we talk about approval ratings. absolutely trump is right that the economy is strong. it's striking to see very bad historic approval ratings in the low 40s with a growing economy and low unemployment that doesn't happen normally he's around areas where obama was at the low point of his presidency, at the worst economic moment in american history since the american depression while we say this is a horse race, they are still historically low especially for a peacetime president with a growing economy. that's a striking liability going into the midterms. >> let's talk about the strength of the economy here. tariffs, so far the latest polls that i've read suggest that the public as of now is divided on

where they stand on tariffs, whether it's a good thing or bad thing. you hear increasingly stories and segments of the market, such as farmers, et cetera, who say this will harm our businesses and we're worried. big companies are now speaking out. do you think he, president trump, will be sensitive to hearing these types of comments come out of key companies? if so, if there's a change in tide, do you think he could backtrack on some of these policies >> there's two points here one is economists are not divided on whether tariffs are good or bad. they are bad they will increase prices and hurt american jobs the second point is china and other people targeted by trump's tariffs are retaliating by going after trump's base so for soybeans, he won 8 of the top 10 tsoybean producing states that could have serious political ramifications. if those farmers are hit hard

they may turn on trump even though the broader economic picture may be good. it's not good for them under a tariff scenario where they're hit hard by china's retaliatory tariffs. >> david, again on in subject of -- sorry, james coming back to you on this subject of tariffs. many people understand some of the hesitancy when it comes to implying investment restrictions on chinese companies, the tech angle, but many people are still skeptical in what the u.s. is trying to achieve with europe, specifically because europe has been a good ally of the united states and why president trump is so intent on going after germany and eu have traditionally been good allies >> yeah. would think in a saner world we would be sort of huddling with allies, presenting a united front and then dealing with sort of the chinese mercantilism, the predatory capital model they

created over there that's not happening we're fighting with allies a lot of this is idiosyncratic to trump who believes we have been taken advantage of for years by europe. he's also weird about certain products he focuses on steel, cars, where he thinks america has been taken advantage of this is not like a comprehensive coherent trade strategy, a lot reflects on who the president is, and it's tough to figure out how the pieces fit together and what that end game looks like. >> we have to leave it there brian and james, thanks for joining us quick look at u.s. futures, looks as though it will be a slightly more positive day at iup around 200 points th'st for today's show "worldwide exchange" is coming up next.

it is 5:00 a.m., here are your top five at 5:00. green arrows everywhere. markets turning positive the dow poised for a triple digit gain futures up nearly 200. breaking overnight, eu leaders hashing out a major deal on migration a live report from brussels coming up. deutsche bank's u.s. unit flunking the second part of the fed's stress test. nike's big bounce. the foot wear company stompin i expectations. and why weather could be worrisome for the housing market it's friday,