welcome to "street signs." >>. >> european equities decline as averages post their worst december since the great depression amid jitters over the feds schedule. crude concerns, wti falls since levels not seen since september 2017 as oversupply worries are exacerbated by reports shale levels will hit record levels.

citing the company's increasing debt following the acquisition of the uk based drug maker. china's huawei says it's looking for a just conclusion in the case of its cfo while painting itself as the world leader in 5 g technology >> good morning, everybody, long awaited numbers in light of the q3 gdp, people have been looking for signs of stabilization in the german economy the business climate is 101 versus a forecast of 101.8 disappointing yet again on the business climate index and actually, the expectation is that we were going to see some stabilization. that has not manifested.

the current conditions index has come in at 104.7 current conditions is weaker than expectations. the overall expectations come in at 97.3 versus 98.3. the one positive i should tell you though is that the november current conditions index was revised at slightly upwards but overall, business morale in germany seems to be quite low. has fallen yet again in december business climate has fallen again. euro is better bids after some of the weakest in dollar sunday evening. fundamentally this doesn't appear to be very positive as far as german data is concerned. we will be speaking with clemens

fuest. >> as you can see behind me, it is a tough start for european trading today. we are on pace for the 4th straight negative session for the stock 600. this comes after a weak handover from asia and a soft day stateside. the u.s. stocks are currently on pace for the worst december since the great depression it is a very very weak setup for this week as you can see i want to take you through the european markets and see how the different regions are faring this morning looking across the board, there is no region that is escaping the losses this morning. the ftse down. brexit uncertainty continues to be a key feature of the narrative. the parliament vote will take place the week of january 14th there will be a no confidence motion in her over the decision to push back the vote.

plenty of uncertainty continues to exist around brexit and of course we had over in klein, more concern -- china, more concern over xi jinping's decision not to add. over in italy, the ftse down about .4%. we have had head license around the european commission asking for more cuts from italy we'll look into that in a little bit more detail. i want to take you to toil because oil -- to oil because oil has been another feature of the downturn yesterday and this morning. looking at oil stocks, we are seeing hefty losses, nearly 2 1/2% we are seeing concerns around reports of inventory build and record shale output in the u.s combination of supply and demand concerns let's have a look at the rest of the sectors in europe. yesterday, the key laggard was

retail on the back of that asos profit warning, dragged down the whole retail space told we are seeing a little bit of a bounce in the retail space. at the top of the leader board, retail is up nearly 20 basis points overall the picture is quite negative, the worst performer as we just saw, oil and gas down 2% >> and of course the one thing that has set the tone already in the last few minutes is that weak disappointing efo number. let's bring in clemens fuest, the president of the efo from what i can tell, this is the 4th consecutive decrease in that index where is the weakness coming from >> yes, we've seen the cooling of the economy over the year, but what we are seeing now really is a cooling across the board in the last month. this was more focussed on the

current industry, the difficulty with the admissions tests and this is spreading. we have a slight recovery in the car companies but weak data from investment goods, the chemical industry and the service sector in germany, which was going very well, so the weakening is spreading. >> and just to pick up on those comments, you said it's not just but also the services sector as well what do you point that down to is it domestically driven concern or a function of exogenous factors, where global growth is heading, brexit concerns. >> i think the general atmosphere is kind of gloomy at the moment, and consumers and companies seem to react to that. something else we're seeing is that incomes are growing in germany and employment is high, but consumption isn't really

growing and that may have an impact on the service sector it's not exclusively the export industry this is not only coming from the outside, but these are also, this is a cooling down of the domestic academy as well it's not very strong now this is not really a downturn. but it is a dampening of the economy we're seeing here. >> and sir, last week, you actually lowered your growth productions for germany to 1.5% from 1.9%, also for 2019 you lowered your forecast to 1.1%, do you think there's risk of further downward driven with your germany outlook. >> i wouldn't say there's risk of further downward. 1.1 for next year is a significant downward revision and what we see today is in line with this prediction, i would say, so i wouldn't say it goes beyond that.

it's a negative signal but not such a strong one that we would have to say we expect to revise this further >> now, when we spoke last time, as you just mentioned, it seemed like the downturn was more temporary due to the auto sector, related to emissions changes, now it looks more broad based. yesterday in the retail sector, we saw a massive selloff in retail stocks, including zolando, and asos said germany was facing a more challenging environment than they expected what is the retail outlook for germany, and what does this stay about the german consumer. >> it seems that consumers are not spending as you would expect, given their income, given the low unemployment, so maybe one reason is that some consumers thought about buying a car but are now uncertain as to whether what to buy should it be

diesel or electric consumption is relatively flat the retail readings at this time of today were also flat. it's not a strong decline or anything but it is not the booming retail sector you would expect given the strong income developments >> it sounds to me, based on these comments, that it's going to be very difficult for anything to turn this around the momentum, albeit, it's not too strong, it is setting the stage for a weak start to 2019 what could the catalyst be to turn around this business sentiment? >> well, something that could happen is a turn around in the car market many people have waited, apparently maybe once the emissions test problem is solved, maybe there will be a rebound in the car market, and that could have an impact on the economy as a whole. as i said, we do expect a

certain rebound but we do not expect it to be very strong. we should also bear in mind, if we think about the normal long-term growth rate for the german and european economy, potential growth is about 1%, not very much more, and we have been growing faster for some time, so maybe this is just a return to normal >> thank you very much, clemens, fuest, president of the ifo institute. while a recession is not in the cards, fundamentals call for caution in 2019. that's according to a new outlook report by barclays, the bank also expects a slow down in global growth particularly in european epidem european equities. we are joined by emanuel cow >> this risk off rotation away from financials. there's evidence of investors deleveraging and pulling funds from equities and bonds overall

into cash. what's going to be the catalyst for these investors to rotate again and start reinvesting this cash into the equity, the bond markets. >> we expect investment to expand, and momentum reducing excess liquidity and i think we simply need good news on the growth front, on the policy front, on the political front. and so far it is kwiquite missi. i would think the fed meeting would be quite important tomorrow i think it's very much about the weakening growth policy of china that needs to be answered. >> to pick up on your comment about the feds and this is a year where asset classes have done poorly, not just european equities how much of the relative performance do you think is going to change next year? i mean, this has been a year where european equities have

underperformed u.s. equities which haven't done that well to begin with how much of next year do you think is going to be a function of the u.s. catching up with europe or a convergence play when it comes to growth and earnings revisions. >> i see a lot from the year was due to strong earnings and earnings grew 25% in the u.s. compared to 5 or 6% in europe for next year, we are seeing a gap in the earnings growth between europe and the u.s. is going to narrow. low single digit in europe, and this strong u.s. earnings should go into next year, and kind of positioning, so you're obviously missing a good catalyst to grow and perform. >> would you do that as a relative value play, rather than an outright play on europe then?

>> absolutely. we close two weeks ago we think it is a -- we are not adding risk. but we think positioning is already very varied. >> very consensual to be underweight europe, but you in your own forecast are above consensus, 5% higher, excuse me, you are below consensus, so consensus has to come down for 2019 we saw some of the earnings revision turn negative in q3 with more to come on the negative side, why should investors be investing in a time when we see a further derating. >> i think the earnings story will be very challenging for the market indeed. i believe that a lot of negativity on earnings and a lot of investors we speak to expect earnings to be revised on. we significant ratings, you see to some extent, the earnings are

expected by the market we think they will come through. we think positioning in the market in europe is already very very short both u.s. and europe will see a rise next year but drop is pricing a lot of negativity. >> where the market is very barrish, one of the most hated sectors in europe, banks, you are overweight financials for 2019 yes, they are cheap. arguably with good reason, ongoing regulatory burden, the myth of two impact hasn't been seen, brexit potentially will drive nor regulatory friction with the eu. big mergers seen far away, given with we don't have full banking union yet. there are so many things you point to that suggest you shouldn't own banks. what's your call s >> we do things, you know, the market sentiment along cap x

would be very negative on the other hand, we want to have pocket of rest, where valuation is quite interesting, and we do things at risk around europe and politics is somewhat, you know, due to the upside, and we see banks are repressing a lot of political uncertainty, so we think in the short-term as a technical buy, you could see some up side quality to the rest of the market. >> stay with us. we have more to talk about shortly. that is emanuel cau. remember, you can follow us on twitter at street signs at cnbc. and also coming up on the show, beijing marks 40 years of reform amid mounting pressure over the trade war with washington we'll bring you the latest from s xi jinping's speech after the

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the company in an interview with cnbc, after a number of media outlets claims executives knew that the materials sometimes tested positive for asbestos the firm saw its worst trading day in the last fifteen years on friday speaking to jim cramer, they denied the allegation and backed the materials. >> we unequivocally believe that our talc, our baby powder does not contain asbestos and that's demonstrated in thousands of studies, studies not only conducted by johnson & johnson but studies convicted by independent authorities, well respected authorities, and by the way, throughout this process, we also not only used the best testing methodologies that were available but we continued to improve them through the years. >> renault and see san

executives are to meet in amsterdam. tensions have risen at the partnership after nissan called on renault to listen to reasons for firing who was arrested in japan. the french car maker has pushed for a shareholder meeting. cut by 3 notches citing the company's increasing debt following its $62 billion acquisition of shire which has closed to rise almost 6 fold. siemens, now according to to reuters the companies have offered to divest, siemen, they

have proposed selling parts of the signal business giving rivals and customers this week to respond before it makes a ruling by mid february and t-mobile and sprint have won key u.s. security approvals for their $26 billion merger the tie up got the green light from both the committee on foreign investments and telecome, made up of the u.s. department of justice, homeland security, and defense. the company's respective owners had made assurances they would stop equipment processes from ha huawei we are back with head of european executive strategy of barclays another one of the most hated sectors in europe is autos and over the last couple of weeks, the data has been quite week chinese retail growth has slowed

to a 15-year low in a large part by weaker auto sales, european auto sales have been very weak what do we think of this sector in 2019. >> our thinking is the top will remain for the sector market in china as well. and the regulatory backdrop is still an issue as the emission standards are getting tighter and tighter. having said that, this is something that investors are somewhat aware of, sentiment in the sector is cautious valuation is very very cheap and the value is interesting, we are just missing a positive cut in the sector. >> in a similar vein, how are you thinking about basic resources here it's been another sector closely linked to china's fortunes we have seen a bit between the u.s. and china do you think that's enough for a catalyst of basic resources to

gain traction in 2019? >> absolutely. we have a fairly balanced risk we have industrials and tech, and banks and mining, three weeks ago, and we see two potential catalysts for the sector one is the u.s. dollar and the fed with quite importance to check is indeed in the picking and at the same time we expect, you know, chinese policy makers to act a bit more strongly for growth into the new year we think mining is a fairly simple play on potentially picking u.s. dollar and more policy support in china. >> one other thing i wanted to ask you about are operating margins and it's something that analysts point to a lot, particularly in the u.s. and perhaps a little bit so in europe as well a lot of these companies are running at record high profit margins, operating margins typical it tend to be a good indicator of the end of the cycle and now you hear talk of

raising minimum wage, of labor costs of wage growth of higher costs due to import tires et cetera for how long can these operating margins be sustained at these wide levels and do you think that that's going to be, again, another catalyst for earnings growth downgrades next year. >> absolutely. we think the top will be challenging next year and will drive, and at the same time, the profit margins are often high in the u.s. and europe, and for most sectors, so we think, you know, margins will be held by, you know, softer growth. and by this very late cycle inflation pressure if you think about chemicals, industry companies, auto sector as well. these sectors are having a fairly significant cost coming from labor, and labor costs usually go up late in the cycle, so top line and rising costs will probably be an issue for profit margins. >> we heard from the ifo president that the chemical

sector in germany is one of those sectors seeing a downturn in sentiment in the latest survey swi switching gears to the different regions in europe, you have a preference for france and spain over germany and italy when it comes to equities. if you look at france and the political situation there, in light of what's happened over the last couple of weeks with president macron making concessions, and now facing over 3% deficit for 2019, french pmis are rolling over what gives you confidence? >> it's a preference, you know, positioning, french market is very well diversified and we do think that political risk is not specifically france. volatility will be challenging, obviously uk has political uncertainty as well. it's very internationally geared it could benefit from the weaker euro as well, and has a very diversified sector composition

we don't think political uncertainty particular to france has to be a particular drag for the market >> given your view on financials and the news flow we have heard from italy over the past week of the government finally relenting a little bit on the budget do you think it may be an opportune to start buying italian equities >> it's getting better there would be a deal of compromise found between the eu and italy, and we are getting there. the news is supportive i believe believe political uncertainty will stay into the new year and the parliament next year due to happen in may will be a significant source of risk for the market so all thinking is not to put everything in the same bag and to have some risk in europe, but again, we will probably go to france as a good compromise between defensiveness. >> we're going to leave it there. thank you for joining us emannuel cau, the head of

european strategy at barclays joining us this morning. also come ugh on the show -- coming up on the show, trump first the feds, after a key decision tomorrow. more after this break.

welcome back to "street signs, i'm jewel uliana. >> and i'm jo hannah amid jitters over the feds tightening psych. >> all right crude concerns, wti falls to levels not seen since september 2017 as oversupply worries are exacerbated by a report suggesting u.s. shale output will hit record levels. shire sees red citing the company's increasing debt following its acquisition of the uk base the drug maker. china's huawei is looking for a just conclusion in the cfo, meng wanzhou while painting

itself a leader in the 5g technology well, another tumultuous session for u.s. epidemic quiti. we saw major losses in the indices ranging from 2.1% to 2.3% weaker on the session, permeating into asian equities the picture for europe is one of weakness, perhaps not to the extent of u.s. equities but still a lot of red on the board as you can see behind me ftse 100 down about 60 points. let's not forget the political backdrop of course with developments in that space we finally have a date for the meaningful vote set for the second week of january and obviously some moves of no confidence out of the opposition party unlikely to go ahead against the full government. let's not forget this slew of data coming up in the uk the next couple of days, including the employment date of cpi data.

let's not forget about that. german this morning, we had ifo numbers come in, the fourth consecutive month of decline, real weakness showing up, and that's having an impact on the index. cac down, and ftse also not getting much love even though there have been positive developments with the budget overnight as well. that's a picture for european indices. switching to foreign exchange, though because yesterday as i mentioned was a heavy session for u.s. equities. trump criticizing the fed and their policy of raising interest rates, wading into the debate there, and what we're seeing this morning is versus other currencies, so versus the euro, dollar continuing to trade on the back foot, trading a little bit stronger despite the weak ifo data, and cable is trading a tad firmer despite all the political noise in the background, 126, 40/50 is the

range here, and also getting a little bit of traction it is very much a safe haven play when things are trading down in the red, you tend to see 4 yen emerge ever since the opec meeting there was a brief update people thought perhaps with the announcement that there would be an opec cut, opec plus cut, we would see some love for the sector that hasn't really transpired yet, again, another weak session for oil. we're down 3.3% wti you can see has dropped 30% in the last three months alone so really this is a sector that has not only lost a lot of positioning from a cta perspective but seems to have lost people's ability to gain investments relief and the trajectory upwards given some of the cuts that were announced and just finally, let's take a quick look at u.s. futures it looks as though the mood is a little bit better for some of these indices today, s&p opening about 10 points higher, dow

about 100 points higher. there has been a lot of volatility in this a lot of questions about what the fed are going to do. the meeting starts today we'll find out what they decide to do. the market is still pricing in about 65% probability of a hike out of tomorrow. some people are saying that perhaps the fed are looking at what's happened in stock markets the last couple of days, and may actually blank a lot of questions about that. >> thank you, jemana. president trump tweeted overnight that considering both domestic and international factors including a strong dollar and low inflation, it was incredible and they were considering a hike and the central bank should take the victory. that was echoed by white house trade adviser, peter navarro on cnbc who warned the fed was the biggest risk to u.s. economic growth. >> the predominant factor hands down and at the top of the list is federal reserve policy. donald trump's instincts are always right on this, and months ago, he started pointing out

that the fed was going too far too fast right now, we have 0 inflation for all practical purposes, so on wednesday, the only argument i'm hearing for the fed to raise rates now is that somehow they have to expert their independence from the white house. this is a bad argument i think what the fed should do is simply do what it says it's going to do which is look at the data. >> now, double line capital ceo and so called bond king jeffrey gunlack said the fed should not hike rates tomorrow. >> it's a pretty widespread and coordinated set of weaknesses. >> are you saying by embarking on this suicide mission that the feds shouldn't raise interest rates this week? >> i don't really think that's the main thrust of my idea and this week, yeah, i think they shouldn't raise them this week >> you think they shouldn't?

>> i don't think they should the bond market is saying fed, you've got no way you should be raising interest rates look at the 2, 3, 5 year part of the yield curve which are flat at 270 i guess that is corroborative of maybe a hike but it's basically saying that in the year 2019, you're going to have a cut. this big, but a cut. that's what's priced into the yield curve and 2020 another cut. >> the fed will raise rates three times in 2019 according to a forecast from goldman sachs asset management the firm will keep a close eye on tightening policy amid a optimistic outlook for global growth next year i'm happy to bring in the ceo of global head. let's start off talking about the fed. they have kind of boxed themselves into a corner here because they're dammed if they dorks a do and dammed if they don't. do you think the fed see the price action and blink, decide

to do nothing. >> i think the central case is they move interest rates higher. we have a lot of market turmoil, and volatility people are getting focussed on the short-term, and line fundamentals the u.s. economy is strong growth is going to slow to 2.5%. but it's 3% this year. still a lot of momentum in the economy and most importantly, a tight labor market. >> you say that and there seems to be a lot of momentum in the economy. it's still growing north of 2.5% it's not growing at 4% but it's still growing. why are people getting so nervous. why is there so much volatility? >> we are at the end of the cycle and they are looking at the stock market and under no illusion that's going to make a difference the fed will look at what that does, not so much from the stock market level itself but rather for the tightening of financial conditions what has been remarkable about the cycle, financial conditions eased.

it's in the last six months that we have seen a timing of financial conditions we still have easier financial conditions today than at the starting of the tightening cycle. >> if i look across the u.s. economy. one of the weak pounints has be the housing market just yesterday, the national home builders association index dropped to its lowest reading since may of 2015. how concerned should we be about that given a house is every american's largest asset >> i don't think we should be overly concerned the fed has to tighten policy. we need tighter conditions a reflection is some softening and activity we have been taking out spare capacity, seeing inflation pressure rise. so the fed is doing their job, and that is to slow the economy down to a more trend like growth pace that's what they think we're in the process, admittedly the later stages they want to see the slow down in activity. >> just talking about where you want to put your money then in 2019, we get it the economy

seems to be in good shape, and you have written in your report you prefer equities to credit, credit to rates and em to dm i want to go back and ask you about the equities and credit and credit over rates phenomenon it's interesting you say that, given it's coming at a hit where credit seems to be falling out of bed, specifically in the high yield space. people are getting quite nervous about some of the, well, the default probability going up, given that we're entering into late cycles. i wonder why you're placing credit so high on the spectrum here. >> equity is above credit and credit above rates we think the fed has more to do. we don't expect maybe not positive returns out of bonds but very little government bonds. i think if you think about it in that context the credit cycle is certainly in the later stages. you're now getting paid significantly more than six months ago that spread widening compensates you for the additional risk. importantly it's whether we have a recession on the horizon

those default rates will pick up when we see a recession on the horizon. we certainly don't see that in 2019 maybe, maybe in the later stages of 2020. it's still what's the cycle as long, it hasn't been as strong as previous cycles we see that being extended into 2020. >> i understand you are structurally cautious on credit but tactfully constructive in your terms, so what metrics are you closely watching that would make you turn tactically barrish on credit, and when we do start to see default rates picking up, which sectors are you watching closely. >> you look at leverage levels, the amount of debt companies are piling on. that has increased but we have kind of seen it stabilizing, there has been some evidence of deleveraging some signs of improvement in the underlying fundamentals, but we're tactically, not

structurally we're in the later stages of the cycle, no doubt about that energy, not surprising, makes up about 15% of the high yield market given the fall in the oil price, we have seen a lot of pressure there the question is do oil prices continue to decline or is the strength of the growth enough to put a floor on oil prices and see improvement. >> stay with us. we have plenty more to talk about shortly. andrew wilson, ceo of emia now, ha huawei looks forward to a conclusion in the case of its ceo meng speaking to media, rotating chairman insisted they were independent from the chinese government he also pledged to spend $2 billion over the next five years to improve software and engineering and open a security transparency center in brussels early next year. and elsewhere, chinese

president xi jinping has marked the fourth anniversary of the beginning of china's market reforms with a marathon speech about growth and development the reforms were necessary to continue the growth trajectory, urging beijing to stay the course the president also struck a defiant tone warning nations not to dictate his country's policies amid the trade war with the u.s. emily tan filed this report from hong kong. >> china marked the 40th anniversary of reform in opening up, in his 90 minute address to the nation from the great hall of the people, president xi jinping said today is an important day well remembered adds it marks a major turning point in history and in the commemoration, they are gathered to review and take stock. xi said reform and opening up is a great revolution of chinese people in the nation, with a quantum leap in socialism. china has turned from a closed country to one embracing an all

around opening up. it is exactly 40 years to the day that ping opened a communist party conclave that launched china's reform in opening up this was a highly anticipated speech but there were no new specific measures announced only to say this will be a long process and each step will not be easy. >> translator: we have introduced more than 1,600 reform initiatives, and navigated through dangerous currents reform is going deeper across the board in a swift, but steady manner with breakthroughs on multiple fronts. >> president xi quoted m mao zedung, and. president xi kpam came to powern

2013, and initiated his anticorruption campaign. the speech comes amid mounting pressure for china to accelerate reforms amid a trade war with the u.s. and the impact that's having on the chinese economy. xi said no one is in the position to dictate to chinese people what should and should not be done, but there was no immediate reference to the united states. the commemoration ceremony also included the rewarding of pioneer medals of the many acknowledged included li kwon yu. chinese basketball superstar yao ming, and the executive chairman of alibaba jack ma, alongside 10 cent pony ma i'm emily tan in hong kong, back to you. follow us on twitter street signs @cnbc. and tweet us directly. the next round will pit

football giants against each other. we go over the most anticipated pat match ups after the break.

♪ lean on me, when you're not strong ♪ ♪ and i'll be your friend ♪ ♪ i'll help you carry on ♪ ♪ lean on me.

gundlach welcome back to street signs, the european commission has asked italy to cut euros from its 2019 budget now, according to the report, the commission is worried that the italian government is implementing temporary rather than permanent measures to reduce its annual deficit. meanwhile, eu commissioner for economic affairs, says brussels wants to avoid sanctioning italy over its budget. speaking in an interview, he said rome should be able to implement its policies without breaking eu budget rules and also over here, uk prime minister theresa may will take her brexit agreement back before parliament by mid january. she will let mps debate and vote on the deal on january 14th, more than a month after she cancelled the vote which would have left her heavily defeated

now she insisted the eu had offered more clarification on the northern irish backstop, and her government could seek more legal assurances from brussels. >> we are also looking closely at new ways of empowering the house of commons to ensure that any provision for a backstop has democratic legitimacy. i can confirm today that we intend to return to the meaningful vote debate in the week commencing 7th of january and hold the vote the following week >> now that, however, only prompted opposition leader jeremy corbin to table a no confidence motion in theresa may over her decision to push back the vote such a measure against the prime minister rather than government would be largely symbolic and unbinding. >> this is unacceptable in any way whatsoever, so mr. speaker as the only way i can think of ensuring a vote takes place this week, i'm about to table a motion which says the following that this house has no confidence in the prime minister

due to her failure to allow the house of commons to have a meaningful vote straight away on the withdrawal agreement and framework for future relationships in the uk and european union and that will be tabled immediately, mr. speaker. >> a uk tabloid, the sun is reporting that theresa may's cabinet will today order the country's 6 million businesses to begin making preparations for a no deal scenario the british chamber of commerce forecasts the uk economy will grow at its slowest rate since 2009 the bcc say growth will stall to just 1.2% due to weak consumer demand and a freeze in investment ahead of brexit soaring through the head of economics at the british chambers of coce told cnbc uncertainty surrounding brexit was putting pressure on uk businesses. >> it's certainly true that trading has become much more tough. indeed, 1.2%

so things are getting tougher. i think what we're seeing is that it's two key areas where we're seeing the great incentives, confidence weakening, and the pressure of why the brexit uncertainty, but also what we're seeing is the impact of weakening. >> credit swing and a mi >> in a statement to cnbc, the swiss lender refuted a report claiming the bank's wealth managers advised clients that an extended period of political instability had already prompted some customers to move their assets offshore saying quote it's not the house view. andrew wilson, goldman sacs asset management, still with us. are you advising your clients to do the same, to transfer assets. >> i'm we're advising them to,

sort of invest prudently, and wisely and manage risks around it i think this whole debate, though, is fascinating, in terms of the level of uncertainty. and you know, we're used to analyzing economic situations, political ones are much more difficult. particularly in the binary nature of this we're going to have vote on the week of the 14th, and so the question is what happens with that vote firstly, and then if theresa may is not successful, what is the follow up? what is plan b, what do we do post that. >> she's waiting for a little more color on the vote before thinking about getting involved even though valuations are quite attractive right now >> we have been cautious around uk assets in general, particularly sterile lg obvious -- sterling, it's the shock absorber, we have been cautious. if we get a successful outcome, we could see upside to sterling,

if we move what -- >> are there specific elements you're telling investors to look for in securities when they're making single security selections for 2019? >> we position portfolios, we want to make sure we have diversification. we don't want to take big positions, big investment views on a political outcome we're being pretty cautious around how we think about uk assets again, these ultimately are ouch position. >> we haven't talked about your views on the green bag out of all the asset classes, the only one that has done well is the u.s. dollar, up 5, 6% do you think that continues into next year or it done >> i think we have probably seen the best of it, so i think the dollar has had a good year it's performed well, we think as we go into next year, we would see some emerging market currencies in particular, many of which have underperformed

significantly in 2018, having a bounce back. >> we'll leave it there. thank you so much for joining us andrew wilson. we have some breaking news in football space and it's something that we have been talking about on the show the last couple of days. left manchester united with immediate effect there's been a lot of speculation. our sports expert adam joins us with more on this. yesterday we were discussing this, weren't we >> absolutely. manchester united have acted swiftly in the wake of that game jo jose mourhno, they lost to liverpool, and he has left the club with immediate effect no word yet on who's going to replace him an interim manager will come in probably in the short time, but jose mourhno

it was the anniversary of when he left chelsea the second time around in 2015 yesterday, so this time of year is not always beneficial for jose staying in a job. >> no longer the special one what does this mean for the champion league, they are set to play who's going to be leading the charge for the new front >> i think that isn't as relevant at the moment because that's not until february. yes, they were given possibly the hardest possible draw they could have got yesterday by getting paris in the campion league draw for the last 16. the point about that, they might take a view that manchester united if they're going to be in any position and come up against psg and beat them, they need to get somebody involved now that z a january transfer window to do what mourhno, to get the transfers. he said the club didn't back him. they did give him a new contrac

last year. now there's a new manager coming in the main one, he's won the champions league three times in a row. could be someone from the old guard, inside the club, even nicky bot in charge of the youth team. >> never a dull moment adam reed our sports reporter at cnbc let's have a k llook at u.s. futures. after a rough day yesterday, we are seeing a glimpse of hope this morning, all three major indices are looking like we are poised for a stronger open today. >> that is it for today's show i'm joanna versace. >> i'm julia tattlebum worldwide exchange is next ♪ there's no place like home ♪

argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪ >>

. is the selloff finally over or do we still have more room to fall, the futures right now in the green but there are warning signs still flashing oil alert. crude sell off in a big way this morning. it is back below 50 a barrel on the defense johnson & johnson ceo in big time damage control mode the company's baby powder controversy is growing cbs stripping former ceoless moonves of $120 million. and by the way, if you want something delivered by christmas, and we know you do, today is your day to get it in the mail in time we are live on the front lines on the last minute