welcome to street signs. i'm karen cho. these are your headlines escalating trade tensions weigh on european markets as they follow asia into the red, while the coalition crisis in germany compounds the woes angela merkel's on the brink of collapse. giving the chancellor an ultimatum to accept his hard line proposal on migration. >> don't do anything -- at the cfc level. we take theresponsibility for

our country. there is indeed a lot that has to be done in terms of migration and other areas where we've seen good results >> seal the deal to combine the european operations. creating the second biggest steel maker and sending shares -- we speak to the ceo later on today crude prices trade lower -- while blasting opec welcome to street signs. as we get started on a new trading quarter, all eyes on the pace of growth in europe and pmis for the eurozone hitting the tape weaker. 54.9 is the final pmi. the flash handle was a tad

higher at 55 it is an under wheming number saki saki sa taking us to a low below the flash estimate of 54.3 when it comes to new orders, component in the june numbers, they have come through just a fraction up. 53.2 down from 53.3. the numbers disappointing and you can see euro dollar reaction this morning down 116.37. >> a quick way we're shaping up. look at this stock trading 19.7%. not much green on the charts a bunch of issues as we start out the quarter. many stressing with the political situation in germany after a threat to buy the csu -- to resign. some concerned about the

survival of the government in germany. also, you've got, of course, threats between europe and the united states on tariffs literally front and center investors weighing out multiple threats taking the trade low up. >> the dax closed out down .7 of a percent. you can see we're improving a fraction on these numbers. the italian market suffering 368 points roughly to the downside or 1.7%. a weak start to the trading week german chancellor angela merkel faces an ultimatum that could lead to the collapse of her government the leader of merkel's sister party, csu, has reportedly offered this step down unless the chancellor meets his demands. the tougher controls on the german border. crisis talks between merkel's cdu and the csu are due to take

place today following dramatic leadership meetings over the weekend. merkel praised the migration deal reached by the eu leaders last week. >> translator: europe is slow and we're not where we want to be we still need to do a lot of work the summit has not solved the problem. we all know that i believe that europe has to be kept together. we indeed concluded that the current situation the free movement of people could otherwise be threatened. that's why a unified approach for europe is so important. >> she also added that cdu and csu should remain coalition partners >> translator: i will get straight po the point. i'm chancellor and i would like to act in collaboration with the cdu as well as the spd we have a partner in the coalition government and we work well with them in politics it can sometimes get rough. that's appropriate we had a few tough moments

trying to strike a deal. that's something you have to withstand. >> investors responding to rough ee owe in germany. i think it's extraordinary if you look at the market, investors are running scared but there was a suggestion he did not want to bring down the government how concerned should investors be about the final outcome >> reporter: you heard the comments from say hover, our understanding is that there were similar comments yesterday that this effort was not about bringing down the government someone to give us more insight joins me now she's the head of the europe program at the -- thank you very much for being here today. is it reasonable to say this is the greatest threat to angela merkel's chancellorship? >> i would say so. it's totally unexpected. the negotiations a couple of months ago, there was tension

between the parties. but the situation, the -- the situation is not new no new threats, the numbers are down i think angela merkel wasn't prepared for this, actually. >> what's going on here? is the csu posturing to make sure they don't lose -- in october. >> i think that's one of the problems, the upcoming elections in october i really don't understand the -- all numbers indicate that the strategy, the current strategy of the csu doesn't help them gaining the elections. people really committed to what the csu abdicates right now. like the original alternative, not the new fake one the more labor ral people, they [ inaudible the numbers contradict the csu totally. i don't see the point. i think the csu has maneuvered

itself into a corner and there's no way out anymore. >> the question, after last night, there were reports that he told his counterparts, his colleagues that he was willing to resign. we didn't hear him talk to the media late last night, didn't turn up for the press conference in munich. is it likely that he has no alternative but to resign at this point >> i think this morning he has no alternative left anymore. i really don't understand his point. because last night, he said he was willing to resign. this morning said he will give merkel one last chance to negotiate. an agreement, a compromise i think merkel's compromise was what she achieved in brussels. she has no room to maneuver because she ruled out turning back at the borders. resigning is the only possible solution. >> she acknowledged in this

interview with us yesterday, she called that summit because of this pressure from the csu she agrees with them that things need to change, but there are elements that she doesn't want to see changed, including turning back of migrants at the borders. in terms of that long-term agreement between the cdu and the csu on policy, are there growing gaps or just this one issue, do you think? >> i think there are growing gaps there have been gaps since 2015, the refugee crisis but the problem is that political advisers thought it was possible to overcome them. but now, even if she resigns, what a problem now for the csu see hover because he had to step down because of angela merkel, i don't see them staying in the german government anymore. i don't see them compromising on the course now that would be giving in and they

all agree -- i don't see this union lasting very long. >> what about within her own party, the cdu, there are members who agree with the csu on this hard line? >> that's the biggest problem. i think even if there will be a split, i don't see the cdu rallying behind merkel in the long run now they all do because they didn't like the move and the pressure he put on merkel. but a lot of the politicians agree with seehofer. after 2015, politicians of the cdu got more and more skeptical with the chancellor. i think her own position within the cdu might be strengthened right now from the pressure from the csu. on substance, i think it's -- >> one final question. you say this is the greatest threat to her chancellorship if you had to bet on it, would

she be in the job today? >> i would guess we will see a new government but i think every politician in germany is scared to have new elections now. last time it took us so long and it's a crucial situation imagine germany without any government, it's a nightmare scenario i could see the green stepping in and the -- they would be satisfied with this. i don't know how long this government will last then. but i don't see her stepping down immediately now. >> thank you for joining us this morning. she's the head of the europe program at the german counscis o foreign relations. that would of course allow merkel to maintain a majority going into the next few weeks and of course a lot of things on her plate besides migration she would like to focus on a little more than this. >> thank you very much it's certainly all about the

numbers. we have more comments this morning. i want to put context around this for the international audience bavaria is one of the stopping points for migrants in germany which is why tensions have been inflamed we have comments from the bavarian -- who has commented about in threat from the leader of the csu to resign marcus seweder saying they hope it's possible to reach a compromise this is very much like the line from seehofer. also goes on to say they were surprised by the decision or offer to resign as he pushes for a hard line approach on immigration. those comments coming across the bavarians despite the tensions around migration showing more sympathy for merkel at this point than so der or seehofer let's take you to corporate

news this morning. supermarkets call for tess coe to announce a long-term strategic alliance as they seek to reduce costs. it will be relations between the joint purchasing of owning brand products earlier this year, they announced cutting jobs and e-commerce investments sealed a long expected steel joint venture. the two companies reached an agreement after months of negotiations creating the second largest steel maker. 50/50 joint venture is expected to see annual synergies of 400 to 500 million euros the deal is a core part of hinrich heighs inger's plan. i'll be speaking with him after 12:30 cet. stay tuned for that conversation meantime, the shares are soaring after a family trust agreed to

buy out the company. the 2.3 billion pound deal will -- investments that hold 66.5% -- made an offer they will be entitled to a dividend the company set this morning. the pressure on -- divide the company into beverages, nutrition and grocery. the he said quote, thas call for urgency rather than incrementalism a spokesperson told us they had -- step up the pace at the swiss giant. coming up on the show, the global trade spat heats up trump says trade -- find out more after the break

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worries over a burning trade will weigh on asian markets. the nikkei slumping to the lowest level since april let's get to nancy in singapore. we've had a rough start. but it first started in asia today. >> certainly has, karen. if you thought june was a bad mornt, we're kicking off a new month firmly in negative territory. nikkei saw a biggest percentage drop, 2.2% we're seeing broad-based selling. you get a sense of the exporters seen as very vulnerable to current trade tensions out there. they're on the back foot likes of sony off 1.2% here. toyota after 1.4% and nissan off 2.3% the automakers among the global firms that are rattled by the trade tensions the first round of the u.s. china trade tariffs go into effect on friday it appears in asia, the fear is

that this is getting very real the shock that could be felt in asia is what we're seeing reflected in the markets, the concerns around which i should say. look at what happened in the south korean market as well. firm moves to the downside the blue chips, the stocks that have a lot of foreign exposure were weighing to the downside. off 2.36%. overall, korean stack had a worst day since march. i want to give you one more close check on the markets in china. the hong kong market was closed today for a holiday. on the mainland, selling once again taking a dent on the rebound. off 2.5% the shenzhen off 1.6%. all this as investors keep an eye to the weak yuan

0.5% nancy, thank you very much for that u.s. president donald trump says the global auto industry is his strongest tool in an interview with fox this weekend, he called his threat to raise tariffs on automakers the big thing u.s. can use in trade negotiations the trump administration is looking into raising tariffs on auto imports by 20% as a national security measure. no decisions have been made on the levies he criticized the trade union for unfair trade practices. >> the trade union is as bad as china, just smaller. it's terrible what they did to us european union, take a look at the car situation. they send their mercedes in, we can't send our cars in look what they do to our farmers. they don't want our farm products they want to protect their farmers. we don't protect ours and they protect theirs. >> the eu is reporting

responding to the tough rhetoric according to the financial times. they sent a letter warning that auto tariffs bob met with retaliatory measures with $300 billion worth of u.s. products brussels says u.s. car import tariffs could spark a full-fledged global trade war and put millions of u.s. auto industry job at risk canada hit back as the trump administration steel tariffs on sunday imposing retaliatory measures on $12.6 billion worth of u.s. goods. the tariffs target american steel, and aluminum products including chocolate, ketchup, yogurt, beef, salad dressing and soups. officials say the measures are meant to put pressure on president trump by going after products from republican stronghold states. speaking over the weekend. they would not escalate his trade dispute with the u.s. and

vowed not to back down luxembourg-based steel pipe maker is temporarily laying off workers at a canadian plant in response to the tariffs on steel and aluminum a spokesperson says 40 workers will be laid off because of uncertainty in the market. the layoffs marked the first publicly disclosed job losses since the u.s. measures were imposed. google paired alphabet tops the list of the biggest companies that demonstrated sustained growth and profitability. executives search firm 2018 ranking of so-called super accelerators includes large companies like ten cent and visa let's get into this elite list with jamie page nice to see you this morning. >> good morning. >> let me ask you about the notion of super akselaccelerato.

tracking companies that have growth -- what's the criteria behind the statements? >> so we analyze the top 500 companies in the world by market cap. and then we basically apply four rules of 20. the first of which is that 20% of the net revenue, the cagr has to have grown. 20% of their growth cannot come from anything other than organic growth inorganic growth is out -- >> more than 20% through acquisition. no more than 20% of the revenue can come through their own government and the final one is they cannot reduce their profit by more than 20% of total revenue. >> i noticed a couple of repeat performe performers alphabet, ten cent, visa charles schwab these companies have continued to perform how unusual is that? >> it is unusual five of those remain for the

full three two of them remain from 2017 if you think as we've seen today in the markets we live in crazy times and so actually managing to create sustainable growth in the way that we design it is incredibly difficult thing to deliver. so it's not surprising that so many have dropped out. it is in some ways more surprise thag there have been such stability in the five that have remained for the full three years. >> do you think these companies are already feeling well-regarded though you look at quality and going after growth it's not that many names to -- in the market. we do realize that these companies are some of the better ones in our portfolio. a lot of brands are well-recognized. i think the important thing is going to understand the criteria we assess against. that's a different set of criteria to achieve. that's why 19 companies actually achieved it from the 500 that's a significant reduction on last year where we had 25 and

23 the year before that. >> i was curious if you look at the best performing jurisdictions, the united states and chinese companies, six american ones on the top list is there risk on all the companies that move the needle on the growth levels >> the way the world works will have an impact on the profitability and success of a business the way that we assess this criteria, the only true measure which could impact it is currency we measure everything in dollars. you could say the impact on what's going on in the world around you is impacting the currency there are -- our particular mesh ushmentes don't take it into account. >> tech, four technology companies. [ inaudible i thought was unusual. >> again, when you think about super acceleration and growth, the first organizations that spring to mind are the technology companies so much is said about them

actually, when we look across the data out of it, it's pretty broad. you've got the companies you would expect, maybe some you wouldn't expect. you have life sciences and health care. financial services that's indicative of the fact that these markets are going through amazing transformation the last few years in order to remain not just profitable but relevant disruption sits around the corner for everybody this report is aimed really at looking how we as a business community have to adapt continuously in order to remain profitable and successful and competitive. >> a good point you bring up unusual times. we're tracking all the investments taking place as people are sharpening focus in companies. but what also jumps out the change in the mood where investors are taking insurance for a downturn concerned about conditions in some countries and some companies that have been disruptive how does a list alter in a recession versus good times now?

>> that's a great question not wanting to answer any time soon if you look at the data, we've done it specifically the reason we measure the 3 and 7 years in cagr is because we started it post downturn >> we don't know yet. >> we don't know yet that is the unknown. we will watch this to see what manifests. >> when it does materialize. >> thank you very much for joining us this morning. jamie page with our partner at hide rick and struggles. president trump seeks a royal intervention in the markets. the white house played down his comments more when we return

welcome to street signs. i'm karen cho. these are your headlines escalating trade tensions weigh on european markets as they follow asia into the red while the coalition crisis compounds the dax's woes angela merkel's government on the brink of collapse as interior minister seehofer offers to resign giving the chancellor an ultimatum to

accept his migration -- >> make sure we get results at the cdu and csu level. there is indeed a lot that has to be done in terms of migration and other areas where we've seen good results. meantime, sealed the deal to combine european operations creating the second biggest steel maker and sending shares in rival -- down lower we'll speak to the ceo later on today. crude prices trade lower as president trump stuns the oil market he's asked saudi arabia to increase production by 2 million barrels while blasting opec. thank you for joining us this morning more data crossing europe this morning. this time from the uk. this is the pmi read for the manufacturing level in the month of june.

54.4 versus the downwardly revised may number of 54.3 a fraction above the may level but also a fraction above reuters poll suggesting 54 on this market level. so it's slightly better than expected and that's good news as the manufacturers' optimism has also managed to reverse a 7-month low in june. seeing a little bit of growth in helping to steady a little bit as the mood dips across in the uk manufacturing sector. sterling has -- a third of a percent. 131.64 is what we're seeing on the charts more broadly, let's look at what we're seeing as trade tensions continue to dominate the agenda and fears around the survival of merkel's government in germany the euro has been -- as a result 1.1640 down about a third. it continues to make ground versus the japanese yen.

a fraction ahead gaining up two to the pound. down a third of a percent. dollar is moving ahead versus the swiss. lock step, the dollar trade back on this morning. this while european stock markets trade weaker in the start of a new trading week. we're down about 4 which is better than the 1.7. 1% down for the french market. the dax continues to narrow some of its losses. somewhat of a knee-jerk reaction as the markets started trading this morning the losses minimized about an hour and a half into the session. certainly a sea of red as we start off the trading week this follows on from losses in the asian markets. let's get into futures and see what type of day we're shaping up for suggesting a dip for the u.s. stock market this morning. same issue on trade lurking in particular with china and

europe investors eyeing some of these talks to see whether there is potential for a breakthrough or what date of birth -- what investors -- more talks this morning. one suggesting it's down impacting the confidence levels, which is why the markets are trading lower. they see it as the potential to take more numbers off the boards if the talks continue for much longer meantime, warren buffett's back share -- dividends after several banks in which he's a shareholders passed the fed stress test. according to the financial times, it's set to be the biggest winner the highest capital distribution since the financial crisis one of the largest investors in the financial sector and his holdings in wells fargo and bank of america are -- a number of other lenders.

deutsche bank is -- despite the stress tests the bank noted critical deficiencies in the planning controls speaking exclusively to cnbc, ceo cristiano owe explains why the restructure plan was different to his predecessors. >> we have gotten -- we see the progress but we're aware that more needs to be done that's all in the plan therefore, we are confident to get over over the next 12 months. >> let's touch on the broader restructuring plan there's been a number of restructuring plan attempts over the last decade. despite those restructuring attempts, profitability is close to zero and a lot of investors remain concerned about the viability of the business model. why is your restructuring plan different? >> well, first of all, we start from a very good foundation. if you look what we have done over the last three years, we cleaned up the balance sheet, we increased the capital to look at our liquidity position, we start

from a foundation which is robust i agree with you we need to work on a sustainable profitability. and therefore, we decided to increase the part of the stable earnings in the bank, that was the reason why we integrate post bank was the retail commercial bank in germany. the clear number one in germany -- we will see a growth in the management business and we will have a very focused approach to our investment, which is the core dna of deutsche bank. we focus in the business we are market leading we have many of those. last but not least, we get more disciplined on our cost action there was a weak part, we have measures in place and i'm confident we shall progress there. let's talk about the retail bank as you said, you've got a big position integrating the bank in germany. is that really the place to be within banking at the moment when you look at the interest rate outlook, the sort of

economic malign in the eurozone? is that really where you want to be long-term >> i think the retail bank is one of the key ingredients because it stands for stable business and the bank in europe and germany is about -- it's important that we have a large enterprise there that -- a large operation and with post bank we have more than 20 million clients. 10 million are online digital clients. we're working on a retail solution as soon as we get out of this merger, this will be a business which over the next three to four years would show a return of equity of 10% then it's a nice stable business you should be in. >> would you like to merge with commerce bank? >> we have so much to do on our own and a clear focus that we should execute on our homework that is for me, key. that's where the management team is focusing on and i think

that's our priority. >> in terms of the retail, industry outlook, is it fair to say that rates are going to stay lower in the eurozone than perhaps people expected last year >> i'm not that much depending or i don't make our business plan and capital plan dependent on the interest rate environment. it's hard to see that. i personally expect a certain rate and increase over the next 18 months. also in europe but i think with the size -- with the synergies we can take out of the merger of the bank, we will have a profitable retail business even without a rate increase and that was the driver why we went for the integration. >> some big soccer news this morning regarding the club future i'm joined with adam now

tell us about the decisions to move -- >> he's going to stay in liverpool, karen this is music to the ears of liverpool fans he had a breakthrough season last year, moving to liverpool and scored over 40 goals for club and country with real madrid, barcelona sniffing around, mo salah had signed an agreement. he signed an improved five-year deal keeping him at the club well into 2023 and one of the key parts to this deal is the fact that there's no release clause for it. we saw that sometimes release clauses don't matter too much now to clubs because 200 million euros when they took neymar. that gave him the opportunity to speak to the player. mo salah committed to liverpool and wants to stay there for years to come. >> what's that mean to liverpool if there's an injury >> what it means to liverpool, they sent out statement of

intent by keeping a player of the quality of mo salah and they've added to their squad this year by bringing other players from monaco who signed very quickly early on in the transfer, before it officially opened liverpool adding to their squad and a key part of keeping players, another player playing with brazil in the world cup today he signed a new long-term deal last year liverpool got to the champions league last year they need to progress in the premier league as well keeping hold of ma salah, turns out statement of intent, they might want to bring in over the course of the summer. >> adam, in other news, lebron james, nba's most high-profile player signed a four-year deal with the lakers according to his management it's the second time james left the cleveland cavaliers having originally left for miami heat in 2010.

the contract is valued at a whopping $154 million. adam, that's a huge amount of money in sporting terms. $154 million. >> that's just in basketball terms. because has a movie career as well and sponsor endorsements. lebron james is the hottest property in basketball unbelievable performance dragging the cleveland cavaliers all the way to the nba finals again and now he's starting a new chapter in l.a >> european audience, i know they want to talk about the world cup and host nation russia after a penalty shootout -- there was more penalty drama sunday night as croatia progressed argentina and portugal were both knocked out on saturday. adam, let me ask you about the long faces in argentina and spain after yesterday. >> absolutely. let's start with spain, for

example. they were off the host russia. they've had a protracted, not very convenient way of going through this world cup losing their coach, a couple of things beforehand. they came up against the host. russia, they -- even media thought they would do. they wanted not to be embarrassed. they got out of the group and thought it would end not to be. spain, went ahead early on in the game and trying to claim the goal it was his own touch that got the goal this russian side, they've got a lot of character at the forefront of that, he equalized. the game went to penalties they didn't want to play -- not very attacking the russian goalkeeper was the hero of the day, saving two penalties from coe kay russia, they're now from no hope or lowest ranked team now into

the quarterfinal ls. >> you watch a lot of sports what went wrong for spain, the change in the coach last minute? >> it certainly has an impact. but spain are famous for this tika tacker. made famous by the barcelona side loads of passes. death by football some people say. have a look at the parting stat. 137 passes for spain in the match. even if you don't follow football, look at the number compared to the russian one. that's a huge disparity. 75% poe tegs all these passes, they went sideways russia were happy to stand there and smile and defend for as long as they needed to. >> my director is telling you to ask about croatia and denmark. might be a vested interest. >> in this week's stage. the point is, this one went to penalty shootout as well

croatia were impressive in the group. they used nine points from their three games. the game -- they had conceded a goal before this they decided to start -- it looked like they were going to start -- 1-1 within the first five minutes croatia equalized. delighted to score the winning penalty. real madrid, they'll be breathing a sigh of relief he missed a penalty to win it for croatia. missed it, but scored his penalty in the shootout. son of the dannyish keeper -- danish keeper, still ended up on the losing side. >> you know i don't follow this whatsoever i may be forced to if the uk mansion to make its way into the final at some stage. friday, everybody was joking about this

after the weekend, everybody is saying, well, this could actually be possible >> that side of the draw has opened up remarkably england and colombia play tomorrow evening there's not man toy count them out, be the ones going to the final. there will be a finalist out of unfancy sides. england are the only side on that side of the draw that still have won the world cup that was way back as we know in 1966 the likes of croatia, even switzerla switzerland, sweden, colombia they have a chance and, of course, roiussia as well. they're being carried by a whole nation russia into the quarterfinals. there was a huge opportunity on that side of the draw from particular you have brazil and france and uruguay all fighting it out. only one can prevail one of those sides i named on

the other side of the draw can prevail. there's a couple more games today. england and colombia tomorrow evening as well. >> all the excitement lured americans into watching the sport action >> quite possible. >> thank you very much for the roundup. president trump seeks a royal intervention in the oil markets. but the white house plays down his comments more when we return. 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. happy anniversary dinner, darlin'. can this much love be cleaned by a little bit of dawn ultra?

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take you back to market action we take stock of a weak start to the quart ner europe and also in asia today the dow started out pretty well. off to a slightly firmer trade before a retreat on the back of trade tensions, concerns about the fed. the u.s. ten year yield. the overall picture down by .6 of a percent despite a firmer finish. let's take a look at the s&p 500 by comparison. drop of .6 of one percent. up by half of one percent.

trapped in a range similar pattern across the month. the nasdaq, the tech heavy index chasing some -- you can see the picture up by 1% the index closed out at 7 -- the white house has played down a tweet from president trump where he claimed to have agreed to have a deal with saudi arabia to boost oil production by 2 million barrels per day. on saturday, the u.s. president said he had spoken with saudi's king solomon and asked him to raise -- prices were too high. the white house said that king solomon agreed to boost the -- it sparked outrage from iran urging fellow producer to refrain from unilateral measures president trump lashed out at opec claiming the organization is manipulating the markets. speaking to fox news, he threatened to impose sanctions on european companies doing

business with iran washington imposed sanctions on tehran since pulling out of a deal and curbing the oil expo s exports. they accused the cartel of favoring certain members. >> got to stop it. we're protecting many of those countries. opec is manipulating and they allowed less than we thought last week. they have to put out another 2 million barrels in my opinion. >> won mexico's election setting the stage for the first electors government in decades. the electoral commission quick count showed the former mexico city mayor ahead of rivals with over 53% of the vote speaking after the vic at this, lop lopez obrador said he would eradicate -- he would seek a friendly relationship based on cooperation. the mexican pay so reversed

initial gains. it's interesting turn of events when mexico has now flung to the left in terms of political discourse. how concerned should investors be and how significant a change is this? >> i think it was expected that he would win and the key issue is, as you said, it's a very large victory. we'll have to see what happens with congress. it could well be that angela's party controlled both houses of congress. >> which would be the worst fear for investors. >> i think it would be less constraints, less checks and balances and maybe a larger fiscal deficit would be the fear in that scenario >> when you talk about the fiscal deficit, there is certainly a fear on debt markets that you have -- that could spend up on social programs. if we think about where some of the support has been, the 125 million live in poverty and a lot of obrador's base, you have to spend on the programs to shore up support across the

country. >> i think he's going to have to do something it looks very clear that the first line of attack is going to be on corruption and all that sort of thing. that will help but it's very unlikely that there will be enough room by eliminating -- and reducing salaries to deliver on the fiscal pledges the silver lining is when he was mayor of mexico city, he wasn't quite such a spendthrift he was fairly restrained and it looks like his finance minister is going to be the same person who was the secretary of finance that worked with him when he was mayor of mexico city initially, things are going to be fairly okay the signals initially are reasonably positive. the question is what's going to happen in the longer term and with less, like i say, less checks and balances. that long-term fear is going to be out there >> if you consider the setting coming up to the election, 50,000 murders last year, 100 politicians killed, that lead up to the election, obrador ran on

a message of fighting corruption but he also at the same time is criticized for attacks on domestic institutions. now, anyone who studied some of the corruption reforms and countries, know it's not down to one man. what's the first step and do you think we'll see anything different in mexico in coming years? >> i think we will see changes, right? he's going to deliver change because it's widely perceived that the system failed the majority of the people i think we will see some change. a gree with you, it's going to be give to make the changes wholesale. not up to one man. it's going to be a long-term process and require a lot of institutional change again, the silver lining here is that there's some institutions in mexico that are very good that he's come out in support of particularly the central bank. >> the previous attempts to

secure the top role in mexico -- it tells you it's not necessarily a story about success and karcharisma of thisn but perhaps a change in style of leadership compared to donald trump's, very national is particular, attacks on rivals, putdowns, for instance that perhaps voters want something a little bit different,which is why obrador had success this time versus previous two attemp attempts what do you make that of >> i think you're right. there's a general trend with donald trump but not only in the americas, right here in europe, in asia and the middle east, with erdogan and the rise of nationalist politicians rather than pop list or leftist or rightist as trump appears to be, taking over more control as we've had in this country because of a system that has not worked for many people, because of a system of globalization and

technological change has created insecurity and problems in the labor market. >> the biggest issues that investors will be familiar with when it comes to mexico. the wall he wants the mexicans to pay for and the stalled negotiations what happens on both of these fronts with the new mexican leadership >> it's clear that mexico needs the u.s. i think it's also clear, maybe a little less clear to some people that the united states needs mexico in the end, there's probably going to be a cooperative relationship but there are definitely going to be changes and renegotiating nafta is clearly one of them the u.s. apparently seems to feel that it holds most of the trump part, so to speak in that effort that's probably true it's probably much more important for mexico that's why i would think it makes sense to expect a relatively cooperative rather than confrontational approach from south of the border

let's take a quick look at the trade around the peso. it's been a challenging trade. so far this year even on the back of the election what do investors do from this point? stay cautious or get back into the trade sf. >> i think people are going to be cautious. we need to see, like i said about congress, it's reasonable to expect fairly good signals. right? at least initially so the mexico story here, the idiosyncratic story in mexico is one important aspect of this another aspect is that the world economy shifted around quite a bit in 2018 compared to 2017 last year we had goldilocks synchronized global growth. >> thank you very much for spending time with us. ob mket strategist invesco. that's all today thank you for joining us

we could find companies that are going to do well regardless of trade tensions in this mark it is 5:00 a.m., here are the five big things you need to know now stocks selling off around the world. investors kicking off the in the red. leftist andres lopez obrador winning mexico's election. the eeu warning if president targets their automakers elon musk saying they've pushed enough cars off the lines to hit production. lebron james, we'll tell you where he's signing a massive deal it's monda