good morning these are your headlines this morning from london. asia spots a relief rally in europe the gains fail to recoup the week's sharp losses. shanghai is down over 7% and europe is in correction territory. >> major u.s. indices post the worst two day declines in eight months as volumes almost triple the average level.

uk chancellor tells cnbc he is optimistic about the outlook for a brexit deal in the near term this is teresa may, the prime minister, appears to be prepping her cabinet for a positive piece of brexit news soon. >> i feel more optimistic today than i did a couple weeks ago. because we have been, frankly, complaining for some time that the other side wasn't really engaging with us, didn't really seem to share our sense of urgency. that has gone away >> and u.s. treasury secretary ste mnuchin today. well, good morning, everybody. happy friday let's talk through the price

action that we see in the markets. it was another extremely volatile session yet again for u.s. equities with all of the majors here, dow, s&p 500 and nasdaq and russell, all the indices closed below the 200 day moving average it was not a good session for u.s. equities overnight. however, what we saw in asia is a bit of a rebound in sentiment. positive numbers coming out of china. nikkei also posting positive gains. what you're seeing in europe is you can see the heat map behind me is mostly in the green. we're getting a sentiment boost. stocks up are .8% as a whole technically though, stocks 600 as a whole is slipped into recovery territory it has been a very tricky year for european indices let's get into the individual stories here

i want to go through them one by one. let's talk about the ft-se 100 again, ft-se 100 is another index in europe that is technically in correction mode we have a big weekend coming up with the brexit discussions and some optimism surrounding a deal next week. let's see what comes out of that the dax staging a nice rebound up 100 points. .9% higher on the session we had a revised gdp number coming out of the economy ministry today i thought this was interesting the german ministry has now downgraded the forecast for growth from 2.3% to 1.8% they also downgraded growth for next year to 1.8% as well. there you're beginning to see them increasing. actually out of all of european majors, surprisingly -- or unsurprisingly, this is the relative outperformer this year only down 4% and not as much as down as the others and then ft-se is also in line

with sent. 160 points higher. .8% higher. italy, of course, has been a big discussion of ours let's move on and talk about the trade sensitive sectors. here i'm talking about autos the vehicles that industries in europe this morning are seeing a bit of a lift in line with sentiment. porsche is up, daimler is up on a day when german index is doing well, you'd also expect to see german autos performing as well. that is the picture for autos. again, another sensitive sector to trade is minors what we're seeing is a bit of a lift there uk, most of the names are uk, ft-se is very mining heavy index. they're up 2% or 3%. seeing a boost in line with s t sentiment overnight. let's talk about tech. the tech sector is front and

center of the rating nasdaq, of course, being a key concern for u.s. investors and yesterday we had a very heavy day as far as trading was concerned for the tech sector in europe but today again, we're seeing a bit of a lift. but crucially, i would say, on yesterday we sold off a lot of the stocks 3%, 4%. we have rebounded a little bit this morning we haven't fully compensated for the losses in yesterday's session. so, yes, things are stabilizing but not really out of the woods yet. all right. let's talk about the asian markets and what happened there. as i mentioned, a couple times already, we did see a bit of a boost for the asian markets. we got nikkei up .5% the chinese indices here up .9%. and .2%. and what's interesting here is that technically this is actually in one of the worst -- has been one of the worst

performing indices this year it's been a very, very heavy bear market there. but we're seeing a bit of a recovery and finally, let's talk about u.s. yields and what is happening there as well. clearly, equities have been at the whim of u.s. yields. today we're seeing a bit of a moderation in terms of how yields are doing levels are coming off a couple basis points all eyes though on this ten-year yield. when we hit 325, that's when u.s. markets started to break a little bit after the weaker cpi, the inflation numbers yesterday, we bounced back and rallied three basis points but since then, ten year treasuries have come off a little bit we're trading at 317 this is the level for today. all eyes on what fixed income will do from here. >> thank you we just heard comments over the last few moments from steve mnuchin.

we'll be talking to him at 12:00 p.m. central european time he is saying that markets are not efficient. they're experiencing a normal market correction and sometimes they overshoot on both the upside and down side he says that if any -- u.s.-china annual trade relationship is worth a trillion dollars if rebalanced and also steve mnuchin saying the trump administration need concrete action items from china to rebalance trade relations. and i do remember, he will be speaking to cnbc at 12:00 p.m. today central european time. that is the u.s. treasury secretary steve mnuchin and his comments there president trump launched as we've been talking about yet another attack on the federal reserve. and he blamed the selloff in u.s. stocks this week on the central banks monetary policy. he said recent interest rate hikes strengthen the dollar which causes difficulty with doing business >> i think the fed is far too

stringent and they're making a mistake. and it's not right and it's -- despite that, we're doing very well. but it's not necessary in my opinion. and i think i know about it better than they do, believe me. >> trump's economic adviser larry kudlow later defended the president's right to make those kind of comments >> i don't think he's calling out the fed. i really mean this i think he's giving you his opinion. he is obviously successful businessman. he's a very well informed investor he has his views but he's not saying to them change your plan, do this differently. none of that stuff he knows that that is independent. and he respects that he just, you know, he has his views. >> meanwhile, let's shift gears and talk about italy the deputy prime minister says the government wants to "give a signal to europe and will approve its 2019 budget on monday." that is the deadline to submit

the draft proposals. >> and else, where italian finance minister has met with treasury secretary steve mnuchin in bali. he said that rome is determined to tackle its public debt. >> but the ecb is insisting it will not rescue italy unless rome secures an eu bailout this is according to reuters the news agency reports that officials say there is no appetite to help a single country if it runs out of cash and that italy can still avoid a full blown debt crisis if the government changes its economic policies now talking bond yields surged since the ruling coalition announced the spending plans today, of course in, line with risk on. we're rallying a little bit. but that ten year is still around the 3.54 level. someone is extremely well versed in central bank matters with former ecb board members.

nancy? >> he may have a word or two to say about italy. let me bring in lorenzo vinsmogi pleasure to speak with you today. tho thank you for your time. the concerns around italy, it seems like the ecb is sending a not so subtle warning to officials in rome that don't look to us for help if things don't go well with brussel do you think we can avoid the worst between italy and the eu in a budget standoff snf. >> -- standoff s >> let's hope so they're focusing on italy. the ecb could be ready to intervene for other countries. so it's really an issue between italy and the eu and i think we all hope that we can find a solution in finding a path of the budget which is sustainable

that in italy is high. >> do you think italy is taking the scandal with european officials because italy is not first one to break budget rules? they're not the first one to go down this path of ignoring the budget discipline. do you think they're saying others have not been punished, that perhaps the eu is bluffing and they simply won't be able to punish us because we're too bill to fail? >> that's -- hopefully not there is a limit to -- and it's a risky gamble on top of that, italy has a high debt so i think it will not be good for the markets, for the credibility. there is a tension between the commission, european union and italy. what happened in the past has been excessive and created moral hazard hopefully, you know, we see this with brexit also

there is a tendency for the rest of the union when you have somebody that tries to depart so strongly or to confront too strongly europe as a whole, then the other countries unite. >> right >> so there is a risk of italy getting into a corner. so i think the dialogue is the only way out >> how concerned are you currently just about the moves in the bond yields if you look at the exposure and the broader european banking exposure to italian debt >> i think the market is showing that people are hedged now i'm more concerned by the fact that higher interest rates in the end affect the profitability of the italian banking system and this may lead the italian banks to stop landing to the italian economy. so creating some kind of a credit, i wouldn't say credit crunch, but, you know, getting close to a situation where banks

cannot lend to the economy and this may worsen the democracy for italy. >> what would be the rescue mechanism to prevent that? >> you know, if we get to that situation, i think at some point we'll have to find an agreement to make sure that we support also of this ecb and brings it back down. it's going take time we've seen in the past that press can go out very quickly. but they're slowing in am coming back you need dynamic to bring the spreads back to normal as soon as possible. it will take time. >> how do you think the ecb is perceiving this? you have a fair view to what goes tlon in teron do you think mario draghi is concerned to say we need to put some of our plans on hold? >> no. as i know him and i think -- i think he's a european. i think all the other board members are european i think monetary policy has to

be designed as a whole the european economy is doing well they have committed to exit qe they won't stay longer on qe they won't stay on to help italy. there are other instruments in case of financial instability. i don't expect interest rates to change just for them >> could the path of interest rates change in the other direction for different reasons? because sometimes what is happening with the global environment, particularly led by the federal reserve, wondering what that's going to do to the global liquidity picture, tightening infect tightening effect it may have around the world if inflation starts picking up, they may have to alter the course in that direction >> i mean, there are many, you know, we have many risks ahead of us. we have the risk that the fed find out they're behind the curve. they may have to tighten more quickly. we have brexit in front of us. we don't know how impact and how

the brexit will effect the economy in the uk and given the role of the uk in the euro-zone, even the euro-zone may be affected negatively. i think there is no point in committing too much. i think there are risks on both sides. the ecb has to maintain flexibility. >> if you say the fed may find themselves behind the curve, we were listening to president trump once again doubling down on the federal reserve saying they're making the wrong move in his opinion. he thinks they don't need to be going this quickly on rates. what do you think? >> we remember where we came before the crisis. 2006, 2007, probably we had a price is becau crisis because interest rates were too low for too long. time for the fed to normalize and the economy is growing at 4% inflation is another 2%. so it's a nominal growth rate of 6% and interest rates are still at 2%. so you can't apply simple rules. but just on the back of the

envelope calculation, there is a long way for the fed to go to get back to normal >> finally, i have to ask you, given the big moves we've seen in markets globally this week, yes, a pickup today, but on the equity side of things, it was ugly do you think the selloff continues? >> well, i mean, selloff cannot continue forever at a certain point, you know, it gets to a point where it's cheaper to buy but i think it's a signal that markets are a bit nervous about many things. trade. the policy in the u.s., expanding fiscal policy and tight monetary policy. maybe valuation is where it is excessive. i think you go through the cycles i think it's better to have them earlier than at the end of the cycle. i think it's to some extent if in this doesn't create too much financial contagion, i think it's to get to fair condition it's maybe healthy for the economy. but we need to, you know, to

look at these sources of risk and monitor them very closely. >> finally, my colleague just down the road spoke to a uk chancellor a bit earlier on. he himself said he was optimistic about the prospect for a deal on brexit than he was just a couple weeks ago. you are more optimistic? what kind of upside for european banko banks or british banks do you think we'll have if there is a deal >> i think we can have a deal. the question is will uk be able to vote for it and implement it? this is a key uncertainty. it is more political situation in the uk. i think it's in the interests of everybody in europe to have a deal with the uk the problem is the internal dynamics in the uk and if we don't have -- if the deal that we agree with them doesn't get implemented, then we have a risk of discontinuing which may

create a problem for the financial system as a whole for them and for the real economy. investors will start reacting abruptly that is the biggest risk, i think. that is in the hands of the parliament in the uk >> we'll take it that's a message to those in parliament thank you very much for taking the time to speak with us today. that is tit and back to you >> the italian situation, something that people are following closely. we'll have a team back in rome on monday as the government there prepares to send its budgets to brussels. tune in next week. >> that looks like you >> i think it is my cold steel. >> are you a tortellini or lasagne guy? >> before we head to break, in tod today's "check it out" story

a dog is now a star on the ice rink his owner found him before he was euthanized but those plans were put on ice. he skated for the university of las vegas team at an ice skating game and his owner has him wear his fourth pair of especially zin designed and puts on a show for the las vegas golden knights >> coming up, the uk chancellor expresses confidence in securing a brexit deal in a conversation with cnbc. more on that when we come back do you hear that?

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call, go online, or demo in an xfinity store today. welcome back to "street signs. british prime minister teresa may said that a brexit deal is within reach according to the financial times. the newspaper reports that may told her closest colleagues at the uk and eu could soon finalize an agreement that resolves concerns about the reich border our colleague is at the imp meeting in bali and speaking with the uk chancellor jeff, what were the main highlights of that conversation?

>> well, i think the message here is that things are moving on and there seems to be a concerted effort by the british government to position this story as one that is going to see a faster resolution than many currently expect. so let's listen to what chancellor philip hammond told us about his current enthusiasm that there will be a resolution. >> i think i feel more optimistic today than i did a couple weeks ago because we have been, frankly, complaining for some time that the other side wasn't really engaging with us didn't really seem to share our sense of urgency that has gone away it is absolutely clear now that the other side is trying to move this forward that they have the same sense of urgency, the same sense of need for progress as we do. and that's very good news. >> urgency, you a urgency, the d that kept coming up here you get the sense from the

chancellor that he feels there has been a significant change in the drum beat around these negotiations let's listen to what he said >> over the last week or so, there has been a very definite step change in the pace around the process. the commission is now clearly engaged. there's a sense of urgency and a sense of both sides really trying to breakthrough and solve the naughty problems but i wouldn't want to give any sense that the naughtiness of the problems themselves has gone away they're still some very stark differences between us but there is a much clearer sense that we're working together on these shared problems that we're trying to resolve. and there really is a lot of effort going in right now to getting this moved forward >> those who talk about a deal in time for the summit at the end of this month are looking at very rapid solutions, i would

say, in terms of the customs union and the potential backstop over the irish question. is that time line impossible from where you sit >> well, it's highly ambitious let's put it like that >> is it highly unlikely? >> it's very ambitious i'm not conducting the negotiations i think what is very clear is that we have to make significant progress by the time of the october counsel to show that we are on track, that we are moving forward and that it would be -- if we don't reach a deal in october, at least we are making sufficient progress that everyone can see it is sensible to come together again in november for that last push to get there. >> so overall, i would say a broadly positive narrative coming from the uk chancellor. we'll have to see over coming days whether that actually

delivers let me wrap up on that point shortly i'm going to talk with the austrian finance minister, no doubt we'll get a perspective on this story from him and, of course, still to come, we'll catch up with steve mnuchin. i'll send it back to you from bali >> plenty to look forward. to i want to draw your attention to the monthly report that just came out today they're saying that global oil demand and supply have reached a new "twin peak at 100 million barrels per day and neither show signs of slowing down." according to the latest report, the strain on oil markets could be with us for some time and will likely be accompanied by higher prices. the ia says this poses a threat to global economic growth. interesting that the support comes at a time where yesterday we had the worst sessions in about two months for the oil complex with some of these

energy names trading down as much as 2%, 3% today we're seeing a bit of a lift up 1%, 8%, .8% respectively in line with the risk on sentiment we're seeing in asia gold also benefitted from a flight to quality bid yesterday. speaking of asia, let's switch quickly and see what the picture was overnight in the markets you can see it was green across the board. sentiment is stabilizing looks like things are for the time being looking a little bit more positive as we continue on with the european trading day. but coming up next, we are back in ball yi fi with an interview. ayitusbe back after this break st wh today is the day you're going to get motivated...

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- she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. welcome back to "street signs. >> these are your headlines. >> asia spots a relief rally in europe the gains fail to recoup the week's losses. shanghai is down 3% and most of europe is in correction territory. >> the dow is going to open 400 points higher after major u.s.

indices post the worst two day declines in eight months as volumes almost triple the average level. >> and here at the imf meeting in bali, the uk chancellor tells cnbc he is more optimistic about the outlook for a brexit deal this as prime minister teresa may appears to be prepping her cabinet for an agreement much more quickly than expected >> i feel more optimistic today than i did a couple weeks ago. because we have been, frankly, complaining for some time that the other side wasn't really engaging with us, didn't really seem to share our sense of urgency. that has gone away >> u.s. treasury secretary steve mnuchin says markets are not sufficient and experiencing a normal correction. we speak to mnuchin first at

12:00. well, let's take a look at how markets are shaping up this morning. we had another very ugly session in u.s. equities overnight yesterday with all of the majors trading below the 200 day moving average. but overnight in asia as we were talking about, we saw a bit of a lift to sentiment. all of these are trading in the green. ft-se is up .6% higher ahead of the crucial discussion this is weekend. perhaps we get a brexit breakthrough as soon as monday the dax is trading higher. of course, export sensitive. and then even ft-se is gaining a little bit of buying this morning, up .4% or about 75 points higher this despite further rhetoric coming out of the deputy prime minister with him saying he thinks rating agencies living in a virtual world and the possibility of

down grades won't make them budge from the budget targets. we're seeing a lift to european equities this morning despite the comments and we spent a lot of time talking about u.s. yields and the impact it's having on equity sentiment. today we're seeing yields come off a little bit again we had a disappointing u.s. inflation number yesterday that gave a bit of a boost to fix income overnight in line with the positive sentiment we're seeing in asian he cequities, the yiels are coming up. 3.25 is the level where things started to get hairy for u.s. markets. all eyes on the travel from here but speaking of u.s. equities, let's see how the opening calls are looking this morning and in line with the positive sentiment in asia, what we're seeing a better open look to be priced in for dow. opening up more than 300 points higher nasdaq about 140 points higher h

and this after two very, very ugly sessions indeed s&p 500 is now down 5% for the week >> back in europe, the ecb is insisting it will not come to the rescue for italy unless rome secures a bailout. they say that ecb officials say there is no appetite to help a single country that runs out of cash and that italy can still avoid a full blown debt crisis if the government changes its economic policies. the chairman of the company told cnbc that italy risks being pushed into a corner >> he has high debt. i think it is not good for the markets, for the credibility there is a tension between the commission, the european union and italy. but clearly what happened in the past, the tolerance maybe has been a bit excessive it created moral hazard. hopefully, you know, we see this with brexit also and the reason

there is a tendency for the rest of the undown whion when you ha someone trying to con front too strongly europe as a whole, then the other countries unite. >> right. >> so there is a risk of italy getting into a corner. i think dialogue is the only way out. >> jeff cutmore is in bali a difficult task ahead of him. you have one of his european counterparts with you there, i believe. >> yes, indeed i have the austrian finance minister i think they're keen to see progress around this issue with italy. austria is in charge of the revolving presidency at the moment thank you for coming to our position let me start off if i might by asking about italy how worried are you about the state of the discussions around italy's fiscal position? >> so i would say at the moment

prediscussion we have now because the official statous will be on the 15th of october and then we'll see what is the proposal of the budgeting of italy 2019 officially. but we see out of the discussion that it might be, yes, a bit concern. and i think european commission first is asked to give the right answer and out of the council, the clear message that we're ready to give the right aennswer. we have rules. we altogether have these rules we have to fulfill the rules. >> what do you think the right approach is with italy here you have a popular government that represents two very clear polar factions within italy. it has a remitt to reduce austerity, to give some of the things that were promised and,

yet, if they adhere to the commission's rules, many of those things that were democratically voted for will have to be taken off the table >> so what i said is we have to start a discussion in the form that we know that the details about this proposal. out of this, there must be a clear position from european counsel and this is what we are preparing from our side in the discussion also with our colleague and i'm still in the hope that we can work out a serious and constructive form of the budgeting which will be the right one for italy. >> can there be a middle road? or will it be like greece that the desires of the people ultimately get crushed because they have to meet the mandate to stay within the euro

>> i don't see a parallel comparison italy did a lot of reforms so out of this, italy went to the right direction on the path to a positive form of development. and out of this, i really trust that also if there is still this popular electoral discussion that the discussions together with the council and the commission we will find a common solution out of this but -- on the other way, italy is quite different on the outcome to the greecesituation and so i think we cannot really make a parallel. >> there have been calls within the government in italy for the european central bank to find more italian bonds do you think that's a nonstarter as far as you're concerned and the germans are concerned? >> so i'm not ready in this form to talk to the ecb but in my mind this is not really the way we should start

the discussion because first we have to realize in which form the measures are planned for the future we have the rules. and out of this we have to start a discussion to make before that a discussion to the ecb to change the rules i don't think that it might make sense. >> so you don't really want to go there >> no. >> as far as this story is concerned? >> no. >> let this one play through i spoke with the uk chancellor philip hammond just a few moments ago. and he seems so much more optimistic that there will be a brexit deal that they can accept do you to you feel at the moment >> so our feeling is that we still have the hope that there will be a deal i think both sides, uk and also the european union are clear in any form however this deal will come. there will be any form of partnership in the future.

uk is an important factor. uk is an important factor especially on financial sector on the global basis. and so in any form we have to realize that there will be some form of partnership in the future what is the position from the european side is there is a clear position from the council which is also the mandate in the discussion with the uk what i trust is that there are the scheduled meetings from the leader side in between the next weeks. and what i realize is that there is a need for reveal even if the commission now is okay we have to prepare maybe the worst case of no deal. but what i still have in mind is that each party knows that we have to do anything we can to get the deal out of this so this is my perspective. we know that the right people we got from the uk from the position of the commission side and the council, it can't be the

way for us so in my opinion, cherry picking on the financial sector side is not the way we can finalize this deal but still we have some days and weeks to, i think, yes, find a solution in this form. >> let me ask with a final question on the economy at home. a couple think tanks downgraded the forecast on the growth of the economy. we saw german data that suggests that actually maybe fears around the trade war with the u.s. and china are starting to affect business decisions can i ask you, do you think that's the case? are you seeing that at the moment at home that companies are telling you they are worried about an impact to supply chains and exports from this u.s.-china trade war? >> what i want to do to start at the beginning is what we have to see is the euro-zone together really strongly recovered out of the crisis and so we have at the moment a

sustainable growth situation my country especially is a little bit higher. we are very proud in austria for that but even the euro-zone together is a sustainable growth rate of 2% out of this what we see now and i think it's not the situation about the discussion of trade, trade war i don't like this word of war because i think it's historically not the right world for. that but out of this we of course also have impact in the discussion and european level. and i think it might be one point out of more. we discussed about brexit and italy. so i think altogether we have now a situation where it might be that the markets react in that form. but what we see is that we have a strong basis in europe it is not reacting strongly to the trade. out of this, especially u.s. and china, so i we inspect that we have a good basis for strong

growth and also sustainable and i think we're on right way >> let's hope you're right for all of us europeans. good to see you. thank you very much for joining us, minister the austrian finance minister here at our position at the imf in bali. let me send it back you to stephen mnuchin still to come. >> excellent, jeff thank you for that for the interview and we look forward to your stephen mnuchin interview coming up. big banks in the u.s. will kick off earnings with citigroup, wells fargo going to release numbers. >> thank you yes, today earnings season kicking into high gear as you say. j.p. morgan, citigroup and wells fargo due to report. before we dive into the detail as far as what to expect, it's important to note that analysts are firmly expecting another strong quarter from these u.s. banks. but in terms of the numbers, you will see today, first on analyst radar is rates

and how rates are affecting bank better formance. a higher interest rate environment is good for banks. so long as they're able to pass those rates through and translate that to higher profitability. a lot comes down to whether higher rates have come in a steady slow fashion or whether they have come in a sharp, more unpredictable fashion. analysts and investors focus on how banks have behaved the second loan growth now loan growth in the u.s. has been decelerating for several quarters now this quarter is expected to be no different analysts looking for 2% loan growth that is a step down from the 5% to 7% loan growth we were seeing a few years ago. thirdly, trading revenues. now capital markets have become a lot more difficult and management teams of several of the banks have good morning through and gudided the market when it comes to trading revenues investment banking revenues will be weaker and this will only partially offset higher equity

trading numbers. lastly, arguably most importantly, outlook investors will be listening very keenly to management commentary on their conference calls around their outlook for rates, macro uncertainty, trade sentensions so conference calls today acutely in focus bring hand back to you, let's take a look at how bank stocks have been trading over the year to date period compared to the s&p 500, banks have been underperforming. that is despite what has been a very strong economic environment and higher rates so will today prove a positive catalyst for the banks we'll see. back to you. >> thank you come join us as well around the desk we have senior analyst from axiom alternative investments. the ideal segue for my question to you which, is look, this year we have the u.s. economy doing extremely well we know that the president introduced deregulation which should be a positive catalyst for the banks.

rates moving higher. all of these things we're supposed to be tail winds for the banking sector and, yet, we look at the performance, there's been no love for financial stocks this year why? >> when you look at the bank performance, there is a bit of a catchup actually in the latest rise we've seen this week. if you look at banks, it seems that investors forget indeed the interest hikes what we expect later on when j.p. morgan, citi or wells give the data numbers, it is very strong ecm may be seasonally slow but in this one, banking, pure

investment banking like m & a and advisory, we have seen a number of large financing deals. so that should definitely help >> coming back to the interest rate point, you expect it to benefit the larger retail banks from an nim perspective. everything we read about u.s. banks is that they haven't passed on these rate hikes to the others it has been below 50%. i think a lot of attentionfor this quarterer is whether or not we're goi -- quarter is whether or not we're going to see the rate hikes being passed on. if they haven't, why haven't they posted better numbers for q-2 and q-1? >> there is stiff competition as well in the u.s. if you look at the pace of growth from quicken, there is definitely market shares being lost those banks have to be cautious

at this point of the psych am as well so that's probably where we see some trends. there has been a bit of a catchup recently year to date, banks underperformed how is there any -- is there any hope for european banks to outperform if u.s. banks have been struggling so greatly >> well, if you look at the q-2 earnings back in july, the u.s. banks definitely outperformed. we saw a peak of 14% in equity for the u.s. banks year over year and it was pretty much flat for the european banks and we've seen some stellar performance in the retail banks of u.s. platforms.

when you compare the u.s. banks, the european banks are better capitalized by 1%. but on the metric, they're less capitalized by 2%. so there is still bate of catchup for european banks to actually come back with them to deploy >> given the low interest rate in europe that beleaguered the european system. i have to leave it there thank you very much for joining us on "street signs. we're just getting headlines from draghi on various topics, actually one is a thinly disguised veiled comment pertaining to italy because he is talking about the fact that there has been limited

contagion given the market volatility as of late and here, of course, he must be referring to the spreads we haven't seen contagion into spain and portugal he also says that he's made some comments about brexit as well. he said a cliff edge brexit could pose a more significant down side risk to financial stability. uncertainty triggered by a cliff e edge brexit could cause more risk we devote attention to complex financial assets this is part of a financial stability discussion and those comments about adhering to the fiscal stability pact as well are interesting. clearly that is a disguised message towards italy. >> very, very separately, kanye west makes politics look easy. join us as we take a closer look at the rapper's white house

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the oval office became the stage for rapper kanye west who used his meeting with president trump to launch into a ten minute tirade praising donald trump. nbc news's peter alexander reports on that meeting. >> reporter: kanye west unfiltered and unapologetic. >> trump is on this journey right now. he might have expected to have a crazy person like kanye west. >> for ten minutes, the rapper delivering a frenetic and jarring monologue. >> it is something about when i put this hat on and it made me feel like super man. >> west repeatedly slapping the historic resolute desk, free styling by our count on more than 40 topics >> so what i think is we don't need sentences, we need pardons. this is what our president

should be flying in. look at this if he don't look good, we don't look good. this is our president. so when i say i like trump to like someone that is liberal, they'll say oh, but he is racist you think racism is control me oh, that doesn't stop me you're tasting a fine wine it has multiple notes to it. >> the speech leaving even the president speechless >> that was quite something. that was quite something. >> it was from the soul. >> west sharing he was diagnosed with bipolar disorder getting a second opinion >> he said that i actually wasn't bipolar i had sleep depravation which causes dementia. >> a presidential invitation meant to focus >> let me give this guy a hug right here i love this guy right here >> peter alexander, nbc news,

the white house. >> inspirational stuff there before we leave, let's head out to bali one more time. jeff is waiting to speak to one of most important voices at the imf. jeff >> yeah. only one thing i can say after your last story and that is i love it. anyway, still to come, we will talk with stephen mnuchin, the u.s. treasury secretary. that interview coming up on cnbc let me send it back to you >> luckily, jeff, you can't see my face. because i am cringing. for our u.s. viewers, that is it for today's show >> for european viewers, stay tuned for our interview with klaus deller. tremfya® is for adults with moderate to severe plaque psoriasis. with tremfya®, you can get clearer. and stay clearer. in fact, most patients who saw 90% clearer skin at 28 weeks stayed clearer through 48 weeks.

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breaking news. wall street is pointing to a major bounceback after the dow dropped nearly 1400 points in two days the relief rally spilling overseas where it's a sea of green in asia to europe. so is this the all clear sign for your money is it safe to get back into the market we're going to find out. it is friday, october 12th, 2018 "worldwide exchange" on cnbc begins right now