welcome to "street signs." i'm juliana. >> i'm villa these are your headlines this morning from london. >> renno shares edge higher after the chairman says he has been wrongly accused and unfairly detained in his first court appearance since his november arrest. samsung follows apple's lead, landing a slowdown in china for weak demand as the

company projects its first quarterly profit drop in two years. this is not a trap ireland's prime minister says they are ready to give fresh written assurances in a possible boost to theresa may into next week's vote on her brexit deal this foltz a lackluster day yesterday. early on yesterday we did see european stocks follow asia higher, but throughout it is afternoon we saw some choppy trade, which actually left the stock 600 down about 14 basis points the narrative today continues to be dominated by u.s.-china trade talks and a hope that we will see a resolution at some point between those two countries. now, beyond that, we've also got headlines around brexit coming

through as wilham just mentioned. we also saw an oil rally adding to positive momentum we're seeing now this morning. let's get into the different regions and see how they are fairing this morning green across the board the ftse may have dominated up about 81 basis points. italian stocks getting a nice boost. the cac right along side about the same it's a fairly decent picture here in europe remember, this also follows some decent gains yesterday in the u.s. they were able to add on to friday's big rally on the back of that strong non-farm pay roles report and reassuring comments from the fed chair. let's get into the different sectors here in europe yesterday the big mover on the positive side when i was standing up here was basic resources. that trade sensitive china sector now today we are seeing green across the board it's been a pretty positive picture throughout the morning at the top of the leaderboard, you have retail up 1.4%. banks just behind them industrials up just over 1% as

well really those cyclical sectors doing well it's a pretty uniform reaction we're seeing today in european markets, and that is one of positivity the lawyer for former nissan chairman carlos ghosn says he could face misconduct charges later this month he has been in detention in japan yet remains chairman of renault. ghosn rejected the charges he insisted he was wrongly accused and unfairly detained. shares in renault, as you can see, have ticked up following his court appearance, and our colleague joins us live from tokyo. akiko, what have you learned today about the conditions of mr. ghosn's detention there? >> well, we did hear from his lawyer a short time ago talking about how carlos ghosn, visibly thinner, has lost some weight.

no question about whether he has been treating any differently than others who are inside that detention center today from the optics standpoint, we saw a different carlos ghosn from those we remember before. the november 19th arrest he came in with a suit, but had his hands cuffed and a rope around his waist with plastic slippers on, but he was a very defiant ghosn, saying that, essentially, these accusations that have been alleged against him are meritless, and then he went on to give a line by line rebuttal essentially of all the allegations that have been put forward against him. we should point out, this hearing today was one that was called for by gh so sn's lawyers. they called for this hearing for a very public explanation as to why he still is being detained after 50 days. on that note, we did hear from the tokyo district court saying they believe he is a flight risk, and if released, he could tamper with evidence, to which

his lawyers responded to say that certainly is not the case, given that he is such a high profile figure we should point out there are some key issues here in the case remember, carlos ghosn was arrested back in november 19 for under reporting his -- for allegations, we should say, of underreporting his income, but the allegations now in question are that of a breach of trust. on that issue, there are two key questions here one of the foreign exchange swap contracts. prosecutors have alleged that ghosn forced nissan to take these contracts to cover his financial losses today in court he said that, yes, he had these contracts, and he was asked for additional collateral from his bank after the yen plunged 80 against the dollar during the financial crisis, and nissan's shares plunged. he did so with the understanding of nissan. his lawyers saying this was a tri-lateral agreement between nissan, carlos ghosn, and husband bank, and there was an agreement he would not pass on any losses from those contracts and would also be obviously

personal personally taking some of the profits. he entered into the contract with nissan with the understanding that there would be no losses that would be passed on to nissan. there's another question here about the money that he transferred to his saudi businessman which we now know to be khalid jufali ghosn forced them to make -- in the amount of $4.7 million over four years his lawyers today coming forward saying this was for services that this businessman provided to nissan, which include rebuilding nissan's network within the kingdom, helping out with dispute resolutions and soliciting investments into nissan this all begs the question, where exactly lawyers believe the motivation has come from in terms of the allegations that have been brought forward on that case? this afternoon at a press conference, he was asked if, in fact, this was motivated a board room, some can called it, by concerns about ghosn's intentions to merge nissan as well as renault. take a listen to his chief

lawyer and how he responded that question >> as the criminal defense lawyer for mr. ghosn, what i can say, or what we can ask for is we would like to ask for a more cautious investigation to be made and for a more thorough investigation of the so-called evidence in the proceedings of the investigation. >> ghosn remains behind bars this evening his current detention is up, and on january 11th, so this friday at that point prosecutors will need to move forward with charges if they want to keep him behind bars. if they don't come forward with the indictment, he will automatically walk if not, if they do charge him, then carl yes, sir ghosn will have to request bail, and we should point out on that case certainly not looking optimistic given that only about 30% of those requests have been granted here his lawyer saying this afternoon they believe that prosecutors will move forward with the charges. if this, in fact, goes to trial it could take about six months until that begins, and, remember, at the end of all of this waiting these allegations of financial misconduct here in

japan carrying a sentence of up to ten years in prison back to you. >> akiko, thank you so much for that clarity moving forward, that was akiko leave from tokyo i think it's worth going back and looking through the timeline of what has happened to date it was on november 19th last year that japanese authorities first arrested ghosn for allegedly underreporting his income the move rattled the share prices of nissan and renault ghosn was re-arrested december 21st on a different charge this time for allegedly transferring personal investment losses to nissan his detention was then extended on december 31st very separately, morrison's has reported slower sales during the christmas period and missed expectations the british grocery firm cited weaker demand. it said its u.k. customers had altered their behavior in the last year. the group still backed its full year guidance. britain's biggest grocers are trading higher after overall

sales of retailers rose just over 1.5%. the key christmas quarter saw some of the country's top four -- including tesco and morrison's, and sthe still lost market share to aldi and little. the irish prime minister has said the e.u. will be willing to provide fresh written assurances about the nature of the northern ireland backstop he said the e.u. does not want to trap the u.k. in any such arrangement. separately, the daily telegraph reporting that u.k. and european officials have held discussions about a possible delay to brexit steven bogbi, the u.s. secretary, has denied that report someone who knows a little bit about brexit is jared, net worth, former adviceor to boris johnson. i want to ask you about boris johnson. if we've got mp's today trying to push through an idea essentially that would limit the government's options when it

comes to no deal, yesterday mr. johnson writes in his "telegraph" column and said this was essentially what people voted for during the 2016 referendum you've claimed credit for encouraging him to campaign for a leave vote back in that referendum, but in 2016 that same man, boris johnson, said after brexit there would be "continue to be free trade and access to the single market. no deal doesn't deliver that, so why has he changed his view, and is that representative of the change of views among others who campaigned for brexit? >> i'm surprised you actually asked me about boris johnson because i don't actually advise boris johnson, and i'm at net wealth and have been for the last two years, but in terms of the brexit negotiations, it's all quite clear. the prime minister's withdraw agreement is going to be voted on next week if that fails, then the default situation as parliament has approved, is for a no deal scenario, which is effectively wto terms.

now, in terms of single market access, as you are probably quite clear, only 6% of u.k. firms serve into european single markets. naturally, that's very important for them they're the big firms. they account for 12% of the economy. the likelihood and the inevitability of the suggest of the no deal scenario is there will be sector specific deals. people don't talk about this in the discussion it's quite clear from the german side you only need to listen to the debate in germany that if the u.k. were to go down, what they call the wto route, which we call the ans are quite prepared to talk about autos. the two sectors in the u.k. that are impacted the most by a no deal scenario are the auto sector and the farming sector. on the positive side the 94% of u.k. firms that do not sell into the single market would be expecting a more positive domestic regulation and domestic

tax agenda as a result of that scenario you need to look at both sides naturally, when you go from being in something for 40 years and changing, those firms who have those business model pr predicated on the current status quo will be the most worried coming back to your question about parliament, i think we're going to see raw politics in the next few weeks, and coming up to your initial question, what we're seeing as different people positioning themselves given that broad politics in the next fort night >> you talk about a hard brexit. we've heard more broadly about financial expenses for the country from both the government and the chancellor in the last few months, and it's not been a very pretty picture they've painted. i just wonder how can you work in the wealth management firm advocate a course of action that can't necessarily be advantageous to your clients >> sorry in terms of net wealth, we've actually produced incredibly

good performance we've managed firms passively with discretionary wealth management we actually don't advise policymakers we actually predict and analyze what's going to go on. actually, the newspaper headlines here in the u.k. this morning are about record boom in u.k. city office space, which is indicative of what's happening here in london the financial sector, and, indeed, most firms involved in the financial sector have been positioning themselves for what they would see as the worst case scenario or the most difficult scenario for the last two years. different firms are positioned and different sectors are positioned the key issue that comes up from the u.k. perspective is that the u.k. economy needs to actually get three things right domestic economic agenda, its positioning with the rest of the world, and its position with the e.u. clearly, in terms of its positioning with the e.u., the likelihood is that we would have some sort of deal. whether we actually have the withdrawal agreement of the prime ministers or if we have a

world trade organization scenario, then we're likely to get sector-specific deals sorted out. all of that despite the near term dislocation will be very positive, and you have to remember that the scenarios of over two years ago have been proved very wrong in terms of the likely performance in the economy and from the financial market >> you've said that a bad deal between the u.k. and e.u. will limit european economic prospects in the future. from a purely economic perspective, would staying inside the e.u. be better than theresa may's deal since it circ circ circ circumscribe -- >> the country voted to leave. i'm not sure if you are aware. >> given the deal that's on the table, which you have said limits the potential brexit dividend, do you think that economically in terms of gdp and other factors it would be better

to stay inside the e.u. at this stage? >> absolutely not. no the e.u. itself needs to fundamental will he reform stepping back, both the u.k. and the e.u. need to actually reposition themselves in the changing global economy. in terms of the u.k. specifically, the u.k. has many poz going for it, but it also is at the same time a very imbalanced economy that's been highlighted for some time the challenge in this last two-year debate is that we haven't in my view in the u.k. focused enough on the domestic economic and financial agenda. that clearly needs to change in terms of leaving the e.u., naturally we need to actually have a good relationship with the e.u., but leaving the e.u. and in terms of going a different path gives us a lot more room for maneuvering on our domestic economic and financial agenda at the end of the day you can't actually expect to leave something easily if if you've been in it for over four decades, but at the same time you do need to have some longer

term strategic thinking, and when one looks at the picture, i think the u.k. economy, despite near term challenges will do relatively well. >> don't go anywhere chief economist strategist at net wealth there with us here in the london studio. now, shifting gears away from brexit, german industrial output fell almost 2% in november this sharply missed expectations for an increase of 0.3%. industrial production in germany has now fallen for three consecutive months economy menster peter altmeyer insists the country is in good shape. he said that in his role he should not "bad-mouth" the current economic mood. coming up on the show, does a surprise visit from the chinese vice premier give greater impetus to the trade talks in beijing? hey, darryl. would you choose the network rated #1 in the nation by the experts, or the one awarded by the people? uh... correct! you don't have to choose, 'cause, uh... oh!

(vo) switch to the network awarded by rootmetrics and j.d. power. buy the latest galaxy phones, get galaxy s9 free. (danny) after a long day of hard work... ...you have to do more work? every day you're nearly fried to a crisp, professionally!

can someone turn on the ac?! no? oh right... ...'cause there isn't any. here- (vo) automatically sort your expenses and save over 40 hours a month. without you, we wouldn't have electricity. our hobby would be going to bed early. (vo) you earned it, we're here to make sure you get it. (danny) it's time to get yours! (vo) quickbooks. backing you. i am a techie dad.n. i believe the best technology should feel effortless.

like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. . welcome back to the program. samsung is warning investors to expect a 29% drop in quarterly profits. the south korean trek firm blamed mounting macrouncertainties as well as stagnant demand for smartphones,

particularly in china. let's have a look at how samsung shares have traded down about 1.7% remember, this comes on the back of apple's profit warning last week our colleague sherry kang has been following the story from hong kong. >> the market has been bracing itself for soft are numbers, but the tech giant managed to disappoint even more samsung electronics have forecasted 29% of annual drop in its q4 operating profit. it came in at 10.8 trillion korean this is a first decline in its profit in two years. the chip/smartphone maker cited weak chip sales and intensifying smartphone competition this was the second tomb for samsung to elaborate on its numbers and its earnings guidance in its history. the full breakdown and earnings call are set for later in the month. now, in terms of outlook, samsung electronics is hinting

at subdued numbers for the first quarter of 2019 and a majority of analysts are expecting a story of weak demand for chips as well as smartphones all around this year, although samsung says that it sees the memory market conditions to get better in the second half of this year. i'm sherry caning in hong kong baugh. else why in asia geely shares have hit their lows after the chinese car manufacturer cited. this marks a significant slowdown to 2018 when the company posted sales growth of 20%. it did, however, miss its sales target of 1.5 million cars meanwhile, beijing signals its serious resolve no the u.s.-china trade dispute meanwhile, u.s. commerce secretary wilbur ross has insisted it is possible to reach a deal that we can live with, but he also said a broader agreement on structural issues would be more difficult to

achieve. our colleague has filed this report from shanghai >> i'm at the ubs greater china conference here in shanghai, and the executives and the investors i'm talking to all say they want to see an end to the tariff dispute. u.s. and chinese negotiators are at the commerce ministry in beijing, and they're looking for areas to compromise, and the chief global economist with uvs said that the conditions are right for a deal >> after 90 days i think the market has seen pricing in tariff hike to 25%, and also a bigger and also a wider range of tariffs as well. i think that has been present as well if the market doesn't get there, then i think -- so if the end result doesn't get there, then i think it will be be positive for the economy as well because if it doesn't get there, then obviously the market will take it as a positive if it does happen, then the market i think will kind of stay where it is right now. >> u.s. officials are focused on getting the chinese to make good

on their promises with specific offers and timetables. the chinese have been criticized in the past for making pledges, but then creating obstacles like regulatory hurdles and not following through. the chinese have expressed some willingness to go along with some monitmonitoring, but they still expressed skepticism that the u.s. will stick to its word. still, in a sign of perhaps some goodwill, the vice premier showed up on the first day of the discussions, and that really sent a signal to many that the chinese are serious about making a deal cnbc business news, shanghai i want to bring jury adviser lions, chief economic strategist from net wealth back into the conversation you went to china just a few months ago and got the impression that the chinese economy had lost momentum. in your view, if i'm not mistaken, that they would make further moves to remain accommodative in terms of policy how much weakness, how much

economic weakness, do you think the chinese can really stomach >> well, china is slow i was in there in november, and i was asked to speak at the big shanghai expo, and also in december the chinese had a big conference in paris. i also attended that clearly, the economy slowing, and we've seen real evidence of the policy change. not just at the weekend when the chinese eased monetary policy by cutting reserve requirements, but back in december they had their big december economic working meeting, which is the previous to the big march conference a yoer ago in their working meeting they've been talking about prevention of risk, deleveraging the economy when he spoke at davos 12 months ago it was basically indicating tightening policy, addressing some of the worries about the financial sector fast forward to this last december, and it's about stabilizing. they outlined six different areas, and it's now easing monetary policy and easing fiscal policy or the economy

fiscal policy supported by monetary policy. i think it's going to be primarily on the fiscal side on top of that the trade talks six months ago were worrying the chinese. the combination of a domestic slowdown and been hit by the trade situation not only spooked the markets, but clearly, decelerated the chinese economy, so we are now seeing a situation where domestically the chinese are likely to take steps to boost dpesic demand, and they're clearly hoping to resolve the trade situation as well. >> given the willingness of the chinese to step in and intervene on both the fiscal and monetary side, do they actually care about tariffs? >> on the trade side, it's a big issue, yes we've seen a complete change in the last few weeks from both the u.s. and the chinese perspective. obviously, president trump and president xi jing ping have good discussions in this area last week there were kwfrgs. this week we've got the two-day meeting. they've already outlined four working groups

next week lui he goes to might le leitheiser we have a whole sequence of last week, this week, next week and the following week where if things are going on the current trajectory, then it would be positive for the financial markets, and coming back to your question, i think the chinese clearly six months ago were hit by the domestic slowdown that shot from the ramping up of the trade situation with the states. now they clearly are trying to boost the domestic economy which they can do themselves, but they're also trying to stabilize the environment. >> very quick final question for you. our colleagues seemed to imply he didn't think there was going to be huge structural changes to the economic relationship between the two countries. this would essentially be more of a stop gap measure to a short-term resolution. is that a concern? >> i think people need to follow their actions. the positive sounds and voices and noises are being made, and that's what actually happens what the americans are looking for is really quantity and

quality. on the quantity side, the chinese buy more american goods. on the quality side, none tariff barriers, intellectual property, and also change of the foreign investment law and helping the agricultural aspect. i think the chinese are being proactive, and the americans clearly, if they are convinced by what goes on in beijing, i think will take a more positive line as well >> thank you so much jared lions talking to us there from net wealth. coming up, president trump raises the stakes in his push for a mexican border wall. more after the break ♪ (vo) here's a question. was it necessary to create a luxury car more teched out than silicon valley? with a cockpit fit for aspaceship. hang on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions before you even make one. was all this, really necessary?

what do you think? ♪

wrongly accused and unfairly detained in the first court appearance since his november arrest on alleged financial misconduct charges europe's stocks 600 hits its highest level since mid-december amid hopes for a resolution for the u.s.-china trade war >> samsung follows apple's lead

and blames a slowdown in china for weak demand as the company projects its first quarterly profit drop in two years this is not a trap ireland's prime minister says the e.u. is willing to give fresh written assurances on the backstop in a possible boost to theresa may ahead of next week's vote on her brexit deal. it is shaping up to be an upbeat day for european markets. as you can see behind me, we are seeing gains across the different regions. the ftse up about 50 basis points the cac up 80 basis points, and the dac and ftse 100 just behind them the key focus for global markets is, of course, what's going on in beijing the second day of the u.s.-china trade talks. here in europe we are seeing increased investor focus

various headlines coming through as we march towards next week's parliament vote. all of that together is providing a nice back drop for our european equities this morning. let's get into four x markets. yesterday was a difficult day for the dollar weakened further hitting its lowest level since october now today it is looking to be a pretty muted picture across the currency markets the pound pretty much flat versus the dollar. just under that 128 mark the euro slightly weaker versus the dollar at 1.14, 1 .45. let's get into oil as i mentioned yesterday, it was a strong day for oil markets we were seeing today brent up another 1% to just under that 58 mark now, this is on the back of news that saudi arabia is reportedly planning an export cut of 800,000 barrels a day. that's according on to the "wall street journal." that is as riyadh looks to push oil over $80 quite a strong day, quite a strong 24 hours for oil. that is providing some support

as well. president trump will make his case for a controversial wall on the mexican border with a primetime television address and trip to the border region. this represents his latest push to end a partial government shutdown new government data seen by nbc news may undercut much of the president's argument nbc news halle jackson has more on that. >> reporter: at the white house a shutdown sales job as the president makes a pr pitch aimed not at lawmakers, but you, with that speech and border trip to highlight what his administration describes as a humanitarian and security crisis vice president pence says no decision has been made yet about declaring a national emergency

>> declaring an emergency on our border, an emergency that doesn't exist, is probably the worst public policy idea that i've seen in about ten years rivgts whitele white house cites the growing risk of terrorism at the border, numbers provided to congress in may first reported by nbc news, show in the first half of the 2018 fiscal year, agents encountered only six immigrants listed on a terrorist screening database >> this completely contradicts what we've heard from the white house officials as they've built their case for a border wall and for shutting down the government in order to get that wall. >> reporter: in a letter to democrats the white house is loosening its definition of border wall. steel not concrete >> i do think his moving towards steel slats rather than concrete wall, if it holds, is important. >> reporter: a big pain point happens this week when many federal workers are set to miss a paycheck >> i can relate, and i'm sure that the people that are -- or the receiving end will make adjustments.

they always do >> about 80,000 federal employees. >> months this shut dorn could last, the president says are your workers prepared for months >> no, absolutely not. that's totally unacceptable. >> reporter: pressure building with negotiations still stuck. the white house has felt it necessary that there will be no delay to u.s. tax refunds sent out to individual taxpayers. that's despite a work force at the internal revenue service thanks to the government shutdown head to cnbc.com now shifting gears, eli lily has announced its acquiring biotech company loxo oncology for $8 billion in cash the deal sees the u.s. pharma giant betting big on loxo's first commercial cancer drug, which it released last year with buyer. it marks the second multi-billion dollar firm. a deal of the new year this comes, of course, after bristol-myers squibb announced last week it was buying

cel-gene after a look at how the companies reacted, loxo oncooling up a whopping 66%. eli lily, little change. now, keeping in the pharma space, the chief executive of novartis says the company will focus on developing core innovative medicines after spinning off eye care company. he made the comments in an interview with jim cramer. >> my conviction we need to focus the company and focus the capital. there is so much great science there is so much possibilities in cell and gene therapies in our core pipeline. we can't use our capital across all of the different areas we're in what we're doing with alcon is a spin, the tax neutral spin, to our shareholders say, shareholder, look, you get to own alcon, which is a leading medical devices company, leading in its space, great company with a great outlook. you have the opportunity now to own that great leading company

and own novartis, which is a compelling thing >> it's really important because that is science. you're willing to lose the surgical part too. >> well, what we're really looking for is places where there's true synergies in the group. when i look at medical devices in contact lenses, clearly huge opportunity to address blindness, but it doesn't fit with our core innovative medicines model. that's why it makes sense to let alcon be free to really develop itself as a stand-alone company. >> cigna's acquisition of express skriptcripts was a major takeover m&a in the industry passes on cost savings to both clients and shareholders >> our number one objective as we close the transaction in the last ten days of 2018 was to insure that both organizations remain passionately focused on making sure our clients and customers got the right service, especially as we step into january, which is an exceptionally busy time for our business and through the first seven days of the year the

results are outstanding. number one, make sure smooth consistent delivery of our promise because both companies have a great track record of delivering in that two, both companies are delivering very strong medical cost results or slowing the rate of growth with outstanding clinical quality programs, and as we step into 2019, we'll begin to get the additional contribution of the business very importantly when we announce the transaction, we said the preponderance of all the medical and pharmacy cost savings would go to our customers and clients to improve affordability, while the administrative cost savings would come to our shareholders a benefit to the shareholders, but a significant benefit to the customers and clients, and that will start in 2019 >> that was cigna's david there. jim cramer also spoke to emma warpsly about the company's new deal with pfizer >> absolutely delighted about the new joint venture with pfizer not only because the tremendous shareholder value creation it creates by bringing a world leader in consumer health care

drugs, position of 7% market share in otc, but that's a foreign number for number two, but also, major synergies. half a billion of synergies and prospects for an operating margin in the mid to high 20s by 2022 that's really exciting >> emma, tell us that. >> we're going to be number one in pain relief with brands like advil, panadol and -- number one with the brands you know in the u.s. like theraflu, for example. we're going to be the world leader in vms, minerals and supplements with brands like centrum or e-mercen-c. brands like tums, a great u.s. brand. the list goes on it also gives us a top one or two position in ten out of the 15 biggest markets in the world both including u.s. and china. what's great about this deal, jim, is not just what it does for our consumer business. it's the value it also creates

for our pharma business, our number one priority. we get those extra cash flows over the next few years as we invest in our pipeline of new drugs, including those from the latest acquisition we announced also in december also, then at the point of separation of these two companies where we have two focused companies, one a world leader in consumer health care, and one in vaccines and dpaphara and with the right debt levels to be for both of those to invest in future growth. >> i want to bring in daniel, portfolio manager at polar capital partners, to weigh in on this pharma conversation now, we've seen a number of large deals in pharma over the last month a lot of them large pharma companies looking to bolster their oncoolilogy pipelines are these deals coming at the right price? >> i think the right price, yes. the stock market has come down i think you're going to see more i think we've heard from gilead

and pfizer that there's going to be more m&a coming, and that wouldn't surprise us >> looking at one of the big deals in particular, bristol-myers squibb, their deal with cel gene, this is a case of two giants who are facing problems of their own. does coming together actually solve the problems that each of them are facing individually >> i'm not so sure you've got big passing there, and i'm not sure if there's enough pipeline in either companies. i think they're hoping you put the two together, and you hope that there's some special sauce that appears and more drugs appear on a three to five-year time frame, which is when sort of 22, 23 that the earnings hit really comes through from cell gene and eloquist, which is what bristol-myers has. >> i want to switch gears to the politics especially in the united states. we've now got the house controlled by the democrats. yet, in one area of seeming agreement between both parties in the u.s. is on drug pricing how significant is that going to be as a factor, do you think, coming into this new year?

>> so the issue with drug pricing is affordability for the average american i think that's quite a political issue, but i think actually what's requesting on in managed care, the big insurers are driving down prices already. i think it remains a political issue and a headwind for the sector, but i think it's been fixed, if you like, by the private sector, by managed care. >> is there a change in the focus that firms are placing on regulatory approval, which has always been such a high priority clearly, it needs to remain a priority in order for products to come to market. are they now thinking about other aspects as they develop new drugs, do you think? >> absolutely. with this pricing pressure, you have to think about reimbursement, who is going to pay for these drugs, and you have to -- >> or is anyone going to pay >> you have to show the value of the medicine that you are getting approved essentially, it's no good having a me too medication. you have to have something that's commensurately better than the available therapy that's why pipelines are so important. >> so it sounds to me like the

environment we're looking at moving forward is quite different to the one we were looking at in the past how do you identify pharma winners when it comes to stocks? >> well, i think you look at pipelines. you look at valuation. ultimately, you look at growth i think also, the innovation is coming from the buy tech sector. you do need good business development. you need these guys to go out and license drugs in and go and buy drugs. i think the stock reaction to lily yesterday was really interesting. lily went up on that deal, and they paid $8 billion for loxo, but it gives them an oncoolilogy drug that they'll be able to sell >> when you think about the threats to the industry, one of them that has been lurking in the background, but starting to really have an impact is amazon entering the health space. do you have a view on how this is going to impact the broader pharma environment moving forward? >> i think tech -- the tech sector coming to health care, the biggest tech company in health care is united health it's not just an insurer they have 20,000 people in their

division which is developing analytics, data analytics, et cetera never discount amazon or google, but we already have tech innovation happening within health care. >> thank you for your time really appreciate that portfolio manager of polar capital partners u.s. secretary of state mike pompeo has said president trump's decision to withdraw troops from syria does not change washington's commitment to defeat the islamic state. in an exclusive interview with cnbc, he described trump's plan as "a change of tactics. >> we're traveling and will visit eight or nine countries along the way to share with them a couple of ideas first, anden this this. america is there we're there to continue to do the things that need to be done to protect the american people and to insure our middle east stability. second, there's been a lot of noise about this withdrawal from syria, and we want to make sure they understand completely what that means there's no change in our commitment to the defeat of the

calafate or devices globally there's no change in our counter iran strategy. they're still committed to taking down the maligned influence that the islamic -- that those activities, the risk that those activities present to the world, there's no change the change in tactics, we're going to withdraw our 2,000 soldiers from syria, but the mission, the purpose for which we have been involved for the 24 months of the administration remains in full. that's why we're heading there, and we'll continue to build out the alliances with those partners in ways that are very important for the security of the american people. >> that was u.s. mike pompeo talking about wilbur frost yesterday. coming up, amazon, google, and apple prepare to unveil their latest gadgets at the electronics show we'll be live from las vegas when we come back right after this break hey, darryl. would you choose the network rated #1 in the nation by the experts, or the one awarded by the people? uh...

correct! you don't have to choose, 'cause, uh... oh! (vo) switch to the network awarded by rootmetrics and j.d. power. buy the latest galaxy phones, get galaxy s9 free. in't easy. 12 hours? 20 dogs? where's your belly rubs? after a day of chasing dogs you shouldn't have to chase down payments. (vo) send invoices and accept payments to get paid twice as fast. (danny) it's time to get yours! (vo) quickbooks. backing you. unpredictable crohn's symptoms following you? for adults with moderately to severely active crohn's disease, stelara® works differently. studies showed relief and remission, with dosing every 8 weeks. stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. some serious infections require hospitalization. before treatment, get tested for tb.

tell your doctor if you have an infection or flu-like symptoms or sores, have had cancer, or develop new skin growths, or if anyone in your house needs or recently had a vaccine. alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. these may be signs of a rare, potentially fatal brain condition. some serious allergic reactions and lung inflammation can occur. talk to your doctor today, and learn how janssen can help you explore cost support options. remission can start with stelara®.

amazon has overtaken microsoft to become the world's most valuable firm the tech titan ened monday's traying session with a market

capitalization of $797 billion it's the first time that jeff bezos's firm has achieved the title and comes after a volatile number of months with the stock amid concerns of slowing soft bank is planning to invest an additional $2 billion in wework. the figure is lower than the $16 billion that soft bank had originally envisioned. the injection of cash from the japanese conglom lat would value work at $47 billion. soft bank scaled back investment comes amid the recent rout in global tech stocks the largest consumer tech firm opens its doors to the public today the annual consumer electronics show sees the likes of google, amazon, and apple head to las vegas to unveil some of their latest gadgets jay gray has also headed to las vegas, and he joins us there with more detail of what we can expect jay. >> reporter: hey there

good morning to you. we've got a lot to show you here there is so much capturing the attention of so many here in las vegas. everything from our little robot friend here who seems to kind of say and do whatever he wants at certain times to a high-tech training watch that is a high intensity heavy training watch you've got this gemble that will give you professional style video in the palm of your hand, which is cool, and i think this is going to be a beg deal. it's called the notify basically it will turn any device in your home into a smart device you hook this up to whatever you may, and it will measure everything from temperature to sound, to motion, to light it's got a lot of opportunities. it's really rather low cost. you've got this thing, which i may be using here shortly, to grow hair, supposedly. you put that on. they've got the shampoo and conditioner that you use for that kind of thing they've got these high-tech and

ultra state-of-the-art oravona trio ear buds from creative, which is a great company as far as sound is concerned. there are a lot of things that are here for security, including this catana device, which you put on the back of your smartphone it will alert a circle of friends or a monditoring servic if you have any problems it's got an alarm on the back, and you can pull that if you run into any problems. sound bar here you've got this picture frame and music device that you can transfer images to anyone you want around the world via the internet or the cloud. it's just amazing the technology that you see here that is really making a difference in people's lives. it's overwhelming. more than 400,000 items. this just a few of them, that are really getting the attention of many here >> i think you have a wonderful head of hair jay gray from nbc news in las vegas. now, here in london we are

joined around the desk by daniel gleason from ovum. in recenters yoo at ces virtual reality and self-driving cars were two of the big themes that companies were talking about both of those seem like they're still in the pretty distant future what are the big trends you're looking out for this year that may come to life sooner rather than later >> well, definitely you're right. there's always a lot of big things that people are talking about and getting excited about these shows that don't quite make it to the main stream in the next five or ten years if you look at the monitors and what you can do with them, those are very much getting into the mainstream right now we did a survey just last november we're looking at, like, how many people had smart speakers in their homes. it's like 19% of people in the u.k. how many people use smart lighting it's around one in ten people

use smart lighting products already. these products are railroad getti -- already getting mainstream this is going to be a big growth for many, many years people don't replace their ovens or kitchen utensils every two years like a phone this is going to be steady sustained growth for ten, 15, 20 years in a smart home. that's very, very exciting >> on smart home, are we looking at a world that we're living in right now where if you have apple products, have you to have the entire suite of apple products, or are we looking at i -- a world where you can interconnect products from different smart manufacturers? >> that's a big issue. it is something that a lot of companies are trying to build for, that interoperatability and to work with various solutions, but that's actually why the battle for the smart speaker market at the moment is incredibly important because that is going to be what the hub or the central controller for much of smart home is going to be or what will evolve into. the fight between amazon's

alexa, google assistant, apple's home pod, facebook portal as well now these are -- that's actually probably the single most important battle in tech that nobody is really talking about >> essentially, i saw a report a couple of days ago about apple and samsung agreeing on a deal whereby apple hand held products would be able to communicate with samsung's smart tvs is that the kind of cooperation that's quite unusual, but you expect to see more of? is that something that's quite unlikely to continue as a theme? >> i think that's more of a case that's very valuable for apple because apple products, you know, they're very, very expensive, and you're not going to have apple in everywhere, and it's at the end of the day apple want to focus on a relatively smaller number of devices that they can execute on very well. putting apple services on many, many more devices makes a lot of sense for apple. particularly when we're in this new world where apple are going to have to rely on the services and much, much more because as we've heard in the past few

days, smartphone sales are struggling >> one more final question you mentioned apple services there. with some of the smart home products, is there a potential not only for the initial purchase to make money for the company, but also for there to be ancillary services associated with a smart frig, a smart oven that continue to bring in revenue? >> well, definitely. it's a big thing for security, smart security services that we'll have a premium option where they'll give you alerts when they see certain things going on. >> well, thank you very much really interesting conversation.

daniel gleason, senior analyst, consumer technology at ovum. i want to bring you to one last story before we leave you. italy's government has approved a bill to offer a bank access to several state support measures including guarantees for new bonds and funding from the bank of italy last week the ecb appointed three special administrators to take charge of the bank after its largest shareholder blocked a $400 million rights issue. the ecb also urged the new management to shore up the bank's capital and seek a merger with a stronger lender taking a look at italian banks, they have turned lower in the last minutes >> the excngisomg very soon. hey, batter, batter, batter, batter.

[ crowd cheers ] like everyone, i lead a busy life. but i know the importance of having time to do what you love. at comcast we know our customers' time is valuable. that's why we have 2-hour appointment windows, including nights and weekends. so you can do more of what you love. my name is tito, and i'm a tech-house manager at comcast. we're working to make things simple, easy and awesome.

it is 5:00 a.m. and a snowy cnbc here's your top five at 5:00 it's not just apple now. samsung spooking the market. we'll tell you what they said, and the market fallout ahead ousted auto legend and nissan charge carlos ghosn speaking for the first time since his november arrest. get ready. president trump pushes the border wall tonight on national tv as the government shutdown enters its 18th day. could it really finally be the end of the line for sears? why today could be the real make or break moment for the iconic american brand and whoa nelly clemson tigers making history last night