welcome to "street signs." auto stocks accelerate in europe fired up by opt mihm of the says u.s.-china trade talks after president trump says negotiations are going well. apple suppliers feel the crunch as the nikkei asian review reports the tech titan will cut production for some i phones, but ceo tim cook tells cnbc in an exclusive interview that fears are overblown no safe harbor in the italian market fairs in the chip maker

fincantieri after it reveals plans to buy a frerchl rival drawing heavy criticism from the government in rome the uae energy minister tells cnbc exclusively that the balance in 2018 was counter productive as he seeks to strike a balanced feeling for the year ahead. >> placing yet at where it's supposed to be at the five-year -- european markets have been trading now for just over an hour, and as can you see behind me, it is another positive day here in europe the stock 600 up about 85 basis points that's about the same gains that we saw yesterday in europe the overall market narrative continues to be dominated by u.s.-china trade talks with optimism that we will see a resolution after the conclusion of those talks of course, they ran through

three full days of negotiations. the third day today was unscheduled. this morning we heard from the china foreign ministry that the length of the talks should send a signal around how serious they are about coming to an agreement. the sector has hit its highest level since early december on the back of this trade deal optimism. some pretty hefty gains by far the best performing sector today. well, trade talks between the u.s. is and china have wrapped up in beijing according to the chinese foreign ministry. a ministry spokesman says the serious nature of the negotiations meant that they had continued into that extra day.

both sides appear to be much more comfortable at another round of talks among cabinet level officials sometime later this month in washington last night president trump tweeted "talks with china are going very well, but they are still at odds over the tougher longer term structural issues that are important to the more hawkish u.s. trade representatives office which is leading the delegation are. trade representative wants some issues such as chinese subsidies to nestic companies, forced technology transfers, as well as ipr or intellectual rights -- one challenge is figuring out how to get banaling to hold to the commitments. the chinese have been criticized in the past for not adhering to the spirit of agreements, even if they follow the letter of the law. there are reports of the u.s.

wants to maintain tariffs until the chinese deliver their promises or reserve the right to reimpose tariffs if the chinese don't make good on those pledges. what the chinese have said in the past that they don't negotiate with a gun to their head in what is widely seen as a goodwill gesture, china approved the import of five gmo crops paving the way for more u.s. companies to sell biotech seas to china, but some say the approvals should have been done years ago. the u.s. trade representatives office expects a statement later today. u.s. president donald trump has used a televised address to urge congressional approval of his $5.7 billion request to pay for enpansed security on the u.s. border with mexico. his proposed measures had included a wall, but democrats continue to call it unnecessary. >> at the request of democrats, it will be a steel barrier rather than a concrete wall. this barrier is absolutely critical to border security.

it's also what our professionals at the border want and need. this is just commonsense the border wall would very quickly pay for itself the cost of illegal drugs exceeds $500 billion a year. vastly more than the $5.7 billion we have requested from congress the wall will also be paid for indirectly by the great new trade deal we have made with mexico in a televised response, congressional democratic leaders, including chuck schumer and nancy pelosi, denounced trump's demands and accused of president of stoking fear. >> women and children at the border are not a security threat they are a humanitarian challenge. a challenge that president trump's own cruel and counter productive policies have only deepened the fact is president trump must stop holding american people

hostage and stop manufacturing a crisis and must reopen the government >> there's an obvious solution separate the shutdown from arguments over border security there is bipartisan legislation supported by democrats and republicans to reopen government while allowing debate over border security to continue. >> we're joined by peter, the department head of international relations and the director of the united states center at the london school of economics and physical science peter, who was the target audience for the president's speech last night? >> i would say middle american voters independent voters. he needed to change the political dynamic by turning it

into a national emergency, awe humanitarian crisis, a national security crisis. that's what he tried to do is for reframe it i think to kind of broaden the appeal of his position i don't think he moved the political needle very much democrats picked up dozens of seats in thehouse >> 40. >> 40. they clearly feel like this is an issue that they have got significant national support over why would nancy pelosi, why would chuck schumer, why would they bend? >> they won't. they'll only, i think, make a deal if there is a very big concession on the other side i could imagine a grand bargain where they provide some additional funding for a wall in return for serious immigration reform to deal with the

dreamers that's something they could take back to their political base and middle america basically to independent voters and say, look, this is something we've been pushing for for some time, and we've gotten it. that will be a very hard concession for trump to make, but, i mean, at this point it really only has three options. he can concede he can rachet things up by declaring a national emergency or he can cut some kind of grand bargain. >> at what point do the republicans step in and say enough is enough, reopen the government, and put the funding for the border wall aside? >> they're already doing it. they're doing it publicly, and they're really doing it privately. i think that explains a lot of why the speech occurred last night, because what they're hearing from their constituents, many of them, not in kind of hard-core trump districts or states, but in those that are kind of more middle of the road where there's more moderate

voters, that they're uncomfortable with the idea of a shutdown, especially once it begins to take a bite out of average americans, which should begin happening later this week when paychecks are not cut in early next week. >> these are sort of people -- what people call vulnerable republicans. susan collins of maine, cory garden of colorado those kind of senators is in a possibility, you outline three scenarios. is there a possibility where some of the senate republicans died to publicly side with democrats, they sign some of the proposed lej proposed legislation the house is putting forward, and it does, therefore, end up on the desk of the president? does that put him in a very difficult situation? >> then he would have to veto it the difficulty here for democrats is that they would need two-thirds to be able to override a veto. i think the first step here is for democrats to get enough republican support to close down the possibility of a filibuster on this to get clochure in the

senate they need 60 votes if you count up the republicans in the senate who havealigned with the democratic position effectively, they're at 55 they're short of what they need. that puts pressure on the house, on the republican leadership, the minority leader mcconnell, and i think it also puts some pressure on trump. we were a long ways before you would get to a veto and a voeto override i think for trump to own a veto on this, the politics of it are just -- they're just not good for him. >> in terms of declaring a state of emergency, how unprecedented would this be to step in and use funds from the pentagon to fund a border wall? >> it would be -- well, it's -- i think it would be unprecedented to call a national emergency without there being a crisis that most americans

considered credible, so that's a problem right there. it would not be the first time that government funds were redirected, but trump is already experiencing problem within his own caucus because republicans hammered obama for moving unilaterally, using too much executive authority, and that's what this would be what they basically want is they would like a congressional vote on it. many >> a lot of people we have on this program, on cnbc, and you hear on other tv networks and quoted in newspapers, whether they're fans of president trump or not, they acknowledge that his approach to trade talks has reopened issues that previous administrations have struggled to contend with. do you think this stand-off over the border wall is the first good example of a president who is repeatedly stolen -- who has talked about his ability to make big bets, to gamble? is in a man who finally is being

revealed as unable to negotiate successfully, do you think >> yeah, i think this is -- this was his signature issue in the 2016 campaign. if he goes into 2020 without being able to deliver on it, he is going to get hammered >> that bad, you think >> i just think, you know -- i mean, it opens up the possibility of a challenge inside the party i'm not predicting that, but it creates space for people to maneuver, but i also think unless there are some really counter balancing things, perhaps serious concessions by the chinese on trade, that he can points to and kind of redirect the conversation i think that this is going to be a real outstanding issue for if he wasn't able to make good on the one thing that he had identified over and over on the campaign. >> thank you so much this morning. really appreciate you comingin that was peter, department head

of -- the united states center at the london school of economics and fiscal science germany's trade surplus widened further in november on the back of a surprising drop in imports. official data shows the country posted a 1.6% drop in imports on the month, while exports are down just 0.4% it means germany's trade surplus stands at $19 billion euros. one of the corporate stories we are watching, doouv bank, the bank will reportedly slash bonuses in its struggling investment banking business. that's according to the financial times. they say the lender is planning to reduce its budget pool by double digits. that's after the division posted one of its worst performances since the financial crisis and shares hit a record low in november deutsche famously cut pay-outs by more than 80% in 2017, but reversed the measure last year now, morgan stanley is also slightly downgrading the price targets for several major

european banks, including bnp and santandar. we are seeing a modest bounce across the banking space no major movers. the biggest of the bufrm, about 1.3% higher on the day >> bp has discovered a fresh one billion barrels of oil in the gulf of mexico it's also made two new off shore discoveries and a major new investment nearby. the british embassy giant said it made the find thanks to new seismic technology that speeds up its ability to -- bp is already the largest oil producer in the region and expects fossil fuel output for the region to reach 400,000 barrels of oil per day by the middle of next decade separately, morgan stanley, as we've talked about there, downgrading on banks thief also downgraded price target of several major oil producers, including bp, shell, and totale analysts have slashed bp's price

target from 650 to 595 pence while reducing shells from 2580 to 2,180 pence the oil majors there, all of them performing relatively well so far today with bp up nearly .4 of 1% and shell higher by three-fifths of 1% manager on oil coming up operator in the show uae energy ministers says his country isn't in the business of trusting or not trusting u.s. presidents stay tuned for our clus interview 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?

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we're working to make things simple, easy and awesome. iszbliefrmgt our colleague conducted that interview she joins us live now from abu

dhabi, and it seems like it was a wide-ranging conversation, hadley what did he have to say about the subject of geopolitics on the oil price. >> absolutely. i thought it was really interesting that amongst the things that we did discuss, whether or not there was a major impact, for example, on opec with the departure of qatar just a few days ago, january 1st, he did say to me, you know, there are things that we are worried about that are on the horizon. one, of course, is this continuing dispute between the skpus china. you know, how will that go as well as these talks could potentially go in the next day or so, there are still worries on down the line, whether it's about security or geopolitics. listen in to what he had to say. >> trusting or not trusting presidents, we are in the business of watching the market and correcting it every time the geopolitics as a factor are affecting them when something happens, a war, a sanction, and, again, it's are

not only that's under sanction there's venezuela and others many opec countries, non-opec countries, even outside the -- we're always historically dealt with those with adjusting the production and making sure that we keep the balance of supply and demand >> tell me what are some of the specific concerns that you have in terms of the geopolitical headwinds for 2019 specifically. >> one is the potential of heated war talk between china and united states. i think this is one fundamental. not only affecting us, but the whole economics of the world i think we have discussion in the morning. i tend to be more optimistic that we are not going to see a war. it's a negotiation tactic. we will land -- they will land on a resolution, whether it

takes this yoer or part of next year this is one thing. how much is coming from the shale oil production, that's another factor that we need to watch, and we need to advise that it has to be reasonable >> so he is just finishing up, of course, his year as president of opec. he said he continues to be optimistic about the future of opec he says opec is still a relevant organization, and they're going to have to continue to lean on opec in the future, but at the same point they're not going to be led around by the nose by the trump administration or any administration, according to him, and also, of course, the fact that he is concerned about what's going to happen in the next few days, and also, on down the road between the united states and china and how economic growth and trips to china and potential recession in the united states will impact the market, but he says we're going to continue to adjust through 2019 guys >> hadley, thanks so much.

for more detail from hadley's exclusive interview, including why he thinks opec always "does the right thing," head to cnbc.com now, shifting goers to tech. apple has planned production cuts for its three new iphones by around 10% for the first quarter. according to the nikkei asian review mikiku joins us from tokyo more bad news around apple is there any other way to look at >> yes the report says that late last month apple asked its suppliers to produce fewer of its new i phones than planned for the january-march quarter. this is the second time in two months that apple trimmed its planned production, which applies to all new iphone models the request was made before apple warned it would miss forecasts for the end of 2018, and the report says under the revised plan, planned production volume of all iphones will be

reduced to about 40 million to 43 million units for the january-march quarter. down around 10% from an earlier project recollection the decline will mean a critics of 20% from the units apple sold in the same period last year now, apple is suffering from a maturing smartphone market and the impact of the u.s.-china trade war, and its troubles will continue to impact its wide-reaching supply chain that's all from the nikkei back to you. >> thank you very much with us from the nikkei live in tokyo, let's take a look at the european chip makers and see how they are fairing this morning. ams, the worst performer of the bunch down about 3%. they supply into apple, so taking a bit of a hit on the back of this, but beyond that, the rest of the supply chain seems to be holding up okay this morning. now, moving on overnight apple chip supplier skyworks lowered its first quarter guidance it blamed it on the weakness in our largest smartphone customer. once again, not naming apple

specifically, but investors tend to draw the conclusion themselves in an exclusive interview with cnbc's jim cramer, apple ceo tim cook tried to ease investor concerns about apple's future he insisted that future is not in doubt >> i'm never surprised by the market, because i think the market is quite emotional in the short-term, and we sort of look through all of that. we think about the long-term, and so when i look at the long-term health of the company, it has never been better the product pipeline has never been better. the ecosystem has never been stronger the services are on a tear >> meanwhile, apple has raised tim cook's pay for the 2018 fiscal year. security filings show cook was given a 22% boost to his total compensation he is now close to $16 million a year, and it's the second straight annual pay raise. meanwhile, a tokyo court has

reportedly rejected the intention to end the -- of carlos ghosn nbc news has learned the foreign press in japan, an organization within the foreign correspondents club has been notified that ghosn's request has been denied, but has not received independent confirmation he has been in detention since the arrest last november daimler has report sales helped by double digit growth in the chinese market the german carmaker sold 11% more cars in china compared to last year offsetting a dip in demand in north america and europe and coming up, the polish prime minister tells cnbc there needs to be a compromise on brexit that will benefit both the u.k. and the e.u we'll have more from our exclusive interview after this break.

president trump says negotiations are going well. apple suppliers feel the

krufrm as t crunch as the nikkei asian review says it will cut production of some i phones. tim cook says that's overblown shares in ship maker fincantieri trade lower after the probe is opened over its plan to buy a french rival, drawing heavy criticism from the government in rome and the polish prime minister tells me exclusively that brussels is using poland as a scapegoat and that it descriminates against some of the smaller member states. >> different country, different member states are treated quite differently in very similar situations this is probably a different issue of discrimination. this has to be really explained to the public. european markets are trading higher this morning amid

confidence that beijing and washington have come to some sort of resolution or at least are working towards one as we await a statement around what came of the three-day talks between the two nations. the stock 600 is trading up nearly 1% this morning, and as you can see, in terms of the regional split, pretty strong gains across the board italian stocks up 1.3% the ax and the cac up hovering around 1.2%, and the ftse 100 just behind them as we highlighted earlier in the show, one of the big movers thork has been the auto sector the most trade sensitive of the bunch seemed very strong gains there reflecting this optimism among investors. let's get into currency markets and check in on fx this morning. we are seeing some strength versus the dollar in sterling as well as in the euro. the euro is currently hovering just below that 1.15 mark. sterling, meanwhile, is 1.27 of course, investors are starting to turn their attention

to brexit as we head towards next week's parliament vote. let's finally have a look at u.s. futures we're still a few hours away from the open there. it is shaping up to be a positive day stateside the s&p, dow, and nasdaq all are poised for a strong open pretty marginal in terms of the absolute numbers, but the direction certainly looks higher from here. the u.k. government, meanwhile, has suffered a defeat in parliament last night after mp's voted in favor of an amendment that could lower the risk of a no deal brexit lawmakers backed the cross-party amendment to a finance bill that radio he strict the government's power to exchange tax law in the event of a no deal scenario. it represents another blow to theresa may ahead of next tuesday's vote on her own brexit proposals. the prime minister of poland has accused the e.u. of "discriminating between member states." he told cnbc in an exclusive secretary of that some people in brussels want to treat poland as

a scapegoat. our colleague jeff conducted that interview he joins us now from warsaw. what else did he have to say, jeff >> well, it's interesting. the relationship between the polish government and brussels over the last 18 months or so has been fairly fracturous, and key to that a decision made by the government to drop the retirement age for judges here from 70 to 65, and that saw about two dozen justices removed from their benches the polish government said that was about removing some of the legacy from the old soviet days, but, of course, brussels took a different view on that and suggested it was more about the government tightening its grip on the judiciary that's not the only issue that they've been divided over. questions about poland as dependence on coal and meeting some of the e.u. guidelines on

energy policy, and, of course, there have been a whole host of other issues related to migration and immigration into eastern european countries that are e.u. members let's just have a listen to how the polish prime minister phrased his answers to my questions about what he sees as different treatment for different countries. >> the conflict is now being politicized by some people in brussels even more because some people want to make poland a scapegoat for their, you know, to to say imagination of vision of how the relationship between the central institutions in brussels and member states should look like we emphasize our goodwill. can you imagine how many aspects

of this judiciary reform has been changed so far. we have introduced dozens of changes. all after consultations and after negotiations and discussions with the european commission i will always advocate for a dialogue, and i was leading this dialogue with our counterparts, and i can only regret that my hand, which i have actually offered to my partners in brussels has not been accepted and even the opposite was the case because we have done so much to actually agree on a solution and we have actually -- the recent changes which we've introduced in the supreme court we have reverted them just to show to our partners in brussels that we are ready for a wide -- for a wide and deep compromise

this has been rejected i'm emphasizing now i can see that the whole process is taking -- is taken hostage by some people who use it as their political tool >> who are those individuals, and what are they doing this for? >> i still believe that there will be a day of reckoning and i give, you know, time for, you know, another rethinking of what has happened i won't name anybody precisely, but i hope that, you know, coming to the european elections, there will be voices calling for stability and coming down the whole situation we'll see over the next couple of weeks >> it doesn't feel like that from your government, though, the foreign minister has constantly criticized the french

president over recent weeks. i think you have been on the record as expressing frustration that brussels may allow the french to get away from reaching budget deficit guidelines this year do you feel that when it comes to certain countries, brussels behaves in an exceptional way, and it's not fair treatment for everybody? why do you single out the french >> different countries, different member states are treated differently in different situations this is probably a definition of discrimination, isn't it while one country has a budget deficit of 2.4%, another country has a deficit exceeding 3%, which is the mast are criteria, and they are treated differently

because of some, you know, other aspects. this has to be really explained to the public because i talked to my italian friends, and they are, you know, very upset about this treatment, and people in poland and in czech republic and in slovak republic and other countries say what does this mean there are two categories or different categories of countries. this is not justice or equality. >> i have to tell you that the leader is due in warsaw today to hold talks with the government raising the idea that there is a euro skeptic coalition coming together with these two governments certainly as the prime minister pointed out to me in that interview they have great hopes of making gains in may's european parliamentary elections, and should they and

their italian friends be able to do that, their hope is that they will be able to use that power to make changes to the way brussels operates. changes that they feel are somewhat different to the direction of travel that the current coalition around missure macron would like to see they have clearly a very different idea about where this european project should be headed back to you, guys. >> thank you so much for bringing us that interview, and we're joined by michael kopinski, president of the second largest bank in poland, i believe. thanks for being with us in the studio jeff was talking about the european elections in may. there's also polish elections at some point this year i wonder based on what you have seen as someone involved in the polish economy very intricately, do you think the ruling party, lauren justice, has a good shot of holding on to power in these elections? >> i think when you look at the polls, they still enjoy quite a

bit of support almost 40% it's been quite stable support i think what was well received are the public social spending programs, including so-called 500 plus program which has actually worked out and been even praised by the world bank recently as one of a very good program. i think giving the gdp growth, which will slow down this year, but it will still be up to 4% growth in fdi. i expect polish economy to flourish this year, which, of course, supports any government. >> before those european elections in may, there's a deadline set by the european commission for poland to skplie with a bunch of measures under article 7 of the lisbon treaty, and when you talk about economic growth in poland, how badly impacted, if at all, do you think it would beif article 7 was successfully triggered >> so far international investors have not noticed, in

my mind when i talk to investors, that anything has changed in the way they can operate in the country i think the facts are a business relationship of poland in the e.u. has been a great success story. we have tripled our experts since we joined the e.u. 82% of polish experts go into the e.u. number two, poll abandon has been always very observant of the e.u. rules it is a very open economy. as a foreign investor in poland, you will not face any obstacles or any discrimination. when i talk to ceos of international countries, they say we want to be in polan because we know everything is open in the sense of the government elizabeth create any measures i think this is -- this relates to the brexit discussion, and this relates to the future of the e.u. discussion because what politicians and also business people in poland are afraid of is, you know, after brexit, we will lose the british vote, and the british have always been prom ownent of free market and structural reforms in the e.u.,

and we will be faced with topics like present mac roen chasing polish truck drivers in france and the freedom of services and this is not the world that poland wants to be in. is poland wants to be the big supporter, and the society is fourth largest support in the e.u. for the european project, because this means jobs, this means stability, this means efrmt u. funding it also gives a chance for plenty of polish competitive companies to export, and poland is an expert-driven economy. experts into the u.k. have tripled since ten years. $13 billion euros this year. we don't want to lose it >> i have a political question for you, forgive me, but you talk about the openness of poland for business and that is something that international ceos tell you is very attractive >> it's in the end, though it's most recently ceo poll, among the ceo's poll and second most attractive destination for investments in the world it is also when you do the polling. >> sure.

one thing that companies also want is to know that contracts will be respect and what underpins that is always rule of law. the european commission says its big concern around what's been going on in terms of alleged government intervention and the judiciary in poland is that it undermines the concept of rule of law in poland do you have absolute faith in the rule of law there? >> so far when we discuss with investors and, you know, we do -- we are the largest for many of the investments and m&a deals, we have noticed that investors lake-effect skeptical around the courts will work under the new law. on the contrary. i do agree here with the fact that courts have been a little bit too slow maybe not as slow with some, so there was quite a bit of expectation, in fact, this reform will mean that the courts will would operate quicker i think the government realized a little to the extreme. it's all matter of perception, and that's why there was a big

attempt to ease the relationship with e.u., withdraw some of the changes particularly in regards to the supreme court, but from the business perspective, i think there's still a lot that can be done in terms of how quickly the courts operate i haven't got any sense from international investors if people will say, oh, now that the new law is in place, we do question the independence. i think this is want the case. >> one other question about international investors' views of poland. a couple of months ago there was a pretty substantial scandal around the financial regulator there in poland. the knf. they had a pretty major impact, that scandal, on share prices of polish banks one of your former colleagues, i understand, one of your senior legal officials at your bank is now in charge of that same regulator. do you now have confidence, should investors now have confidence in the way the financial sector in poland is regulated? >> you know, the head of the regulator stepped down, and the government took very tough or prosecutors office took very

tough measures in order to bring more transparency to the system. i think we have a very tough regulator, and i think measures that have been put in place with the spirit of bringing in more transparency should work there's always -- there's always a risk of human errors here or some -- i think what it showed you is that the regulator is independent, and they actually -- the judiciary system with the prosecutor's office has worked in trying to resolve the matter >> just picking up on that point in terms of private equity interests in poland, is your sense that they are waiting for more confidence, more clarity on what is going on in terms of the financial regulator before they step in, and really accelerate or start doing deals in poland is there a big pipeline waiting to happen? >> we've seen the number of deals. of course, they're not the size of western europe or america, but we do have a very strong pipe looirn. we as a bank find the 12 ldo's

last year. we had the largest finisher of leverage buy-outs in poland, and we have a very strong pipeline we do see pick-up in private investment, and the m&a market is actually booming. i think plenty of interesting deals coming to the market, consolidation stories, cross-border deals between western europe and poland, so i don't think the ma & a market has to any degree been affected. >> thank you >> thank you very much >> appreciate seeing you here. that's mike, the ceo of bank pakao. you can get more from our colleague's exclusive interview with the polish prime minister. the economic spokesman for the labour party has kwended the government and rome's decision to support the -- he said it would help avoid the risk of a bank run rome approved the legislation to bolster the capital levels it also offered the bank a number of state support options. the italian treasury has set up a 1.3 billion euro fund to cover

the cost of any emergency measures a mernler is also one option on the table. shares are trading lower after the commission announced it would examine the italian ship maker's acquisition of the french rival the german and french governments have raised concerns that the deal could hurt competition in the ship building sector the italian prime minister has expressed surprise about the european commission's decision meanwhile, one of his deputies, mateo, has said france and germany are behaving wrongly with their intervention. >> and that just shows, juliana, quite how politicized this entire keel has become this was something that was negotiated directly between the former prime minister and emmanuel mac roen's government, and the key point there is who owns these two companies, and ultimately, the majority shareholders in both are the states both italian and french states what you had was a deal worked out between them

part of that deal allowed the french a significant amount of leverage they essentially said we will loan you the necessary 1 % for you to have a majority, and in order for you to hold on to that 1%, you will have to meet certain thresholds when it comes to jobs being maintained, economic output from this company, and specifically, ship building yard being maintained if you don't do that, we have the right, reserve the right to take that 1% back, and what's really interesting here is whether it's political or whether the business case has collapsed from the french and jrman perspective, they are now deciding that although we struck that deal last year, we're going to now question this with european commission. we think there's the potential to undermine macron has been under a huge amount of pressure over the last 24 months about this deal because a lot of critics in france said this undermines the french ability to maintain a strong industrial base, to maintain the ability to build ships, which is crucial.

especially when you are looking at it from a military perspecti perspective, when your navy requires those kind of skills. you're now going to be reliant, potentially, on italian ship builders to service, to improve, to upgrade french naval vessels, let alone the commercial side, which is a lot more to do, of course, with cruises different sector there's >> it also raises the question around whether cross-border mergers really can work, and my understanding and based on what you have just explained, the -- part of the aim of this was to overcome national rivalries, but now it raises the question, can they you know, you think about deals like siemens, what are the implications of this for those or cross-border deals? >> there's a long history of french governments not loving to give up national infrastructure they consider to be important. coming up, who is winning the smartphone speaker wars? find out after the break

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sfliefrmt the contest between amazon and google over the future of smart speakers elizabeth schulte has more >> we are calling it the battle of smart speakers as the race heats up between amazon and google to get the biggest share of smart speakers in your homes. you can see that this is a market that's growing very quickly. in the u.s. in 2016 just 9% of households had a smart speaker that number all the way up to 16% just in one year similar growth almost double in france, in germany, in the u.k., and now 11% of households here in the u.k. have a smart speaker in their home. what this is trying to tell you is not only that we're seeing big growth in this industry, but that there's a lot of room to grow when it comes to home devices. companies from amazon to google to apple see this as a way to control the entire ecosystem of your home. this week at ces amazon releasing a bunch of new

products that are compatible with alexa particularly home devices. more than 28,000 home devices now work with the amazon alexa anything from a washing machine to a bike, to a toilet am zwlon is the leader in this space with 50% of market share, and part of the reason for that is because it was the first one to get in. amazon's echo and echo dot really taking an early portion from those customers that wanted to get in on voice of course, amazon's other advantage is that it's linked to your amazon account, which means it makes voice shopping pretty easy the other competitor in this space is google, and google's assistant has about 35% of global market share. gaining traction on amazon, however, as it continues to put its efforts into linking with apps for example, google announcing

yesterday it can now have your assistant communicate with google maps so that you can keep your friends informed in real-time where you are as you are driving along to your destination. google is not supported on as many home devices, but it does have that advantage of being the leader in search and in ai, so that could be one way that it sort of continues to dip into amazon's market share. there is, of course, a third player that we hear about, which is apple, but apple only has about 5% of market share it was a little late to get into this space with its home pod in 2007 our cnbc's john forte is at ces, and he had a chance to speak to amazon's vp of voice services all about this competition take a listen. >> it's probably one of the biggest cases is timers and alarms people love to use timers. in their kitchen for cook and stuff, and it's something i don't think we expected and just seeing that, so we've spent a lot of time making that really useful and powerful for the people outside of the home, what we're seeing is obviously in cars

that's going to be the big next wave we're investing heavily in the auto category. >> why obviously in cars >> because people want to be able to -- they hands-free, work really well if you are in a car, and second of all, you need information that might be local to where you are or you remember things at the moment, and you can't write it down. those are times where a voice assistant could be really helpful. >> for more coverage from ces, including a look at a google roller skoeser and the $7,000 smart toilet elizabeth just mentioned, head to our website, cnbc.com just getting some updates from fitch, the credit rating agency, saying u.s. debt ceiling is more important than the shutdown when it comes to the u.s. rating. if the u.s. debt ceiling becomes a problem, fitch would have to ask whether that was kiconsistet for maintaining a triple-a rating for the united states pretty significant news there out of the rating agency fitch let's take a look at u.s. futures. we are seeing a positive signal

from all three major indexes s&p 500, dow jones, and nasdaq indicating higher at the open. obviously, that fitch news just hitting the headlines, so we'll see how u.s. investors digest that along side, of course, news that u.s. and china have concluded their trade negotiations after three days. that third day that was an unscheduled day took place today, and we heard some positive signals this morning from the china foreign ministry and, of course, last night from president trump saying that trade negotiations were going well well, that's it for today's show i'm juliana. >> i'm glen. we're both here in london. global exchange is coming up on the other side of the atlantic the other side of the atlantic right about now. hey, darryl. would you choose the network rated #1 in the nation by the experts, 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.

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>> the federal government remains shut down for one reason and one reason only. because democrats will not fund border security. the government shutdown enters its 19th day. that's topping your five at 5:00 here's what else is happening out there. apple, reportedly, planning mar major iphone production cuts we will hear from tim cook coming up. u.s. trade talks with china just wrapped up from beijing we will take you there live going four for four. the dow looking to lock in four straight days of gains that's the longest win streak since novemb