hello, and welcome to "street signs. i'm karen cho. these are your headlines tumble has four quarter revenue growth comes in well below expectations, and the company blames a slowdown in u.s. and spending socgen, the bank's global market business suffers despite a beat on fourth quarter net profit >> we have to adjust our plan for the external environment

18 months ago we had in mind a better gdp rules of the worldwide basis. let's get you up to speed with some of the market action here in europe after a fairly

soggy handover from wall street. we're not seeing an appetite for stocks in europe we're down two-tenths of a wench mark a breakthrough between u.s. and china. yet, we have not managed get to anything tangible for investors, so some of the appetite starting to fade. earnings season here in europe also having a big impact on the direction of trade in many of the sessions we've seen recently let's switch over to the boards, and you can see how we're traveling on ftse. brexit a key concern here. we're at 71,77 on the index. big day around the bank of england as well. this is a signal it's going to send down around brexit and monetary policy as a result. watching very closely today, and any sterling movement that is could impact ftse so far we've seemed to have gone back to the negative correlation if you have a pound drop, it's positive for the ftse and vice versa. it's not always been the case, but we're back in that window of

time the rest of the markets, you can see trading waerk. the dax is traveling south about half of a percent. a real underperform eer of the core market. the french market down .2. let's switch over to some of the sectors. freedom beverages trades higher, defensive part of the market, and can you see health care, insurance, and go with the says household goods. the stocks that are falling. media down heavily 1.6%. some down to the earnings. the ad junct publicist hitting the numbers. that's not helping out the media basket, and auto trading down by 1.6% let's come back to the big news of the day around brexit u.k. prime minister theresa may has vowed to "do what it takes and work urgently to secure a change to the brexit withdrawal agreement when she travels to br brussels later today." may will attempt to secure legally binding changes to the ier irn backstop with number ten

keen to insure that britain avoids being trapped in the arrangement. the e.u. says it will not reopen the agreement. let's get out to wilham with more in brussels we've already seen europeans take aim at the brexiteers come up to a key negotiation around the backstop just set the scene for us. any success likely for may today? >>. >> the sun is out here at last it's not going to be a sunny welcome for the prime minister brussels seems to be her personal version of hell it may be that she needs some kind of divine interference to try and get some kind of concession from the europeans that she's essentially promised her own conservative back benches. she will try to get that if you listen to what mr. tusk, the counsel said after the meeting, it doesn't seem like she has much of a shot >> i strongly believe that the common solution is possible. i will do everything in my power to fight it.

a sense of responsibility also gets us to prepare for a possible fiasco. we have spoken about the necessary actions in case of no deal i know that you will also be discussing this with the european commission. by the way, i have been wondering what the special place in hell looks like for those who promoted brexit without even a sketch of a plan how to carry it safely >> seemed quite blunt language there from donald tusk, a man known for his ability to find consensus among the leaders as his role as counsel president. seemingly, not willing to pull punches. he has acknowledged that he thinks the dream he had of reversing brexit is now no longer possible because there's no leadership in the u.k. that would push that agenda forward

what he is hoping for, he said, from theresa may is a "realistic suggestion" about how they can solve this current deadlock. also saying that britain would remain as a trusted friend if it accepts this open-ended backstop as part of the current withdrawal agreement the other man, of course, faesing pressure along side theresa may is the irish prime minister he was here meeting with donald tusk, with jean claude junker and trying to insure their unity continues. listen to what he said about ireland stepping up preparations no no deal >> we don't want a no deal we think it can be avoided we have to prepare for it nonetheless, and we have taken measures to go through our parliament this month and also, we secure our ports and we'll put in place the necessary facilities to be ready on the 29th of march should we have to deal with the no deal brexit something we are increasingly prepared for we provided a letter of

guarantees, so i think we've been very creative all along, and perhaps it's for those that have created this problem to be creative now >> theresa may's own spokesperson questioned whether donald tusk's statements were helpful. we heard from the head of the cabinet in the united kingdom. he said he doesn't think those comments were directed at theresa may. tusk has said that he has no problem with the british voters' decision and much less the politicians that pushed brexit as a possibility we've heard that he has been described as a bully from one conservative lawmaker. he has been described as issuing outrageous insult from another the spokesperson for brexit from the dup, that's the northern ireland party that keeps theresa may in power, essentially, described him as a devilish euro maniac it's what leo said that's really interesting. the instability that's been seen in british politics over the last few weeks is the reason this backstop needs to be held on to, and it doesn't seem with theresa may traveling here today that we're going to have any end

to that political instability or indeed any end to the current backstop >> wilham, thank you very much for laying out some of the points that we discussed today and the likely reaction we're likely to have in brussels i want to come back to you later on around some of the economic forecast we'll be talking about, too, from brussels, but in the meantime, we, of course, have the bank of england on the agenda today it's on the radar for many investors. w widely expected to hold rates today. the bank also released its quarterly inflation forecast sterling is trading coming up to the central bank today 129 .08. we are on the back foot slieldig by .2. let's go to jumana it is super thursday i know you get very excited about super thursday the bank of england effectively gets to live in this very comfortable world where there's an orderly exit from europe. however, we know that may not be the case talk us through what investors need to watch out for today.

>> absolutely. you know, wilham has been using the weather analogies all morning, so i'm going to use one here yes, it is cold, but there is certainly a freezing wind chill factor as well to take into consideration rg and the wind chill factor for the bank of england are the external growth head winds it's not just on brexit, but it's about the growth macro backstop as well he spent time talking about the slow do you know of the european data, and also the pmi's on the u.k. have been disappointing as well the services numbers weakest since 2012 analyze growth right now in the u.k., we're looking at something closer to .4%, .5% if you take those numbers rather than the 1.7% forecast that the bank of england has. the first thing we're going to be watching out for is forecast on growth and whether they're revised down wards, whether they sound a little more cautious about the outlook, and what they point that down to is it external head winds coming from china, euro zone, from the rest of the world, or also is it

a reflection of a domestic slowdown as well we'll be looking out for that. second thing, as you mentioned, brexit uncertainty if you remember, back in november the last quarterly inflation report, they released a table that essentially said that the reaction function from bank of england in case of a disorderly brexit isn't set in stone. they could either hike rates or cut rates in case of a disorderly brexit. they fielded lots of questions about that box ever since then, and they've gone to lengths to explain why they think that way in the sense that in case of a disorderly brexit, you could see an inflation hit, higher tariff, currency depreciation, all the things that made the trade-off between hiking and cutting rates that would be finer. since then, in december what they said is there are heightened risks about brexit uncertainties. we know from the political back drop and from what wilham was just saying that we are no closer to a deal getting ratified, and the best case scenario for them is we will end

up in a transition deal. if that doesn't happen, likely they will have to change course. the big question, i think, is going to be what they will do in case we get to march 29, and there is no real deal on the table. disorderly brexit, no deal brexit, or even an extension of article 50 all of these different outcomes will have some form of an impact on the monetary policy decision. putting it all together, growth is weaker. still a lot of brexit uncertainty. it's going to be very difficult for mr. carney to sound anything but slightly cautious. >> my question is whether carney can avoid inflammatory remarks around brexit, whether he could escalate past donald tusk after his comments about the brexiteers we'll watch for those comments today. thank you for laying out decision time is also coming your way we will bothing on air at that time 12:55 cet. we'll be breaking down the boe for you. in the meantime, ecb out with information today for investors about the course of action here given the conditions on the ground.

in its bull ten they're saying headline deflation is supposed to go further on lower oil prices this is effective for the bank of england today as well the drop in energy prices and what that is doing to inflation. rising labor cost pressures did not translate into further increases and overall domestic price pressures according to the eb, and there wasn't a translation through the system because of a pick-up in labor prices in terms of foreign trade, that's likely to decline further in the fourth quarter. private consumption is expected to regain momentum one positive in this bulletin today in terms of short-term indicators, they point to continued employment growth, but at a slower pace in terms of euro zone activity information has surprised on the down side according to the ecb bulletin economic indicators signal a moderatoration in global growth momentum down side risk has been increasing there are concerns, again, about the global growth environment from another central bank. the ecb also going on to say we'll test adverse and extreme

hypothetical shocks in which banks have faced increasing liquidity outflows they are talking about the banking system, financial conditions, what they could look like this year in the meantime, all that's coming is the european commission will cut italy's growth forecast for 2019 to 0.2% aaccording to reuters, and the media agency the e.u. is due to unveil its latest forecast and block at 11 cet. italy has ended its third recession in a decade after data showed rome's economy contracted at the end of 2018 let's get out to willem for more on that. there are also growth concerns around the powerhouse of germany. talk us through what to expect >> well, we'll be getting these numbers in under an hour's time, karen, and what we're expecting to see based on those leaks to reuters, at least around italy, it's essentially an almost imperceptible amount of growth expected for this year for that economy that we've seen so many difficulties associated with, of course, and specifically when it

comes to a disagreement between the italian government and brussels, the commission specifically here. what we've seen over the last few months, of course, is the commission insisting again and again to the italian coalition government that they should reduce their deficit spending targets. they did that under a huge amount of duress and avoided the deficit procedure. without the growth that the italian government has predicted, if we end up with the much lower number in an hour's time being confirmed by the european commission, it will raise huge questions about how the italians are going to make this work, where they're going to find the necessary funds in order to prop up their spending plans. they've talked about vat rise in the next year or so, but, again, that's not going to be very popular, and it's something that one of the deputy prime ministers has already essentially ruled out. in terms of germany, we've seen that weaker manufacturing data the last few months. we saw that blip last year when it came to car production exports, and, of course, there's going to be lots of questions around china and the slowdown there and what that does to a

very export-driven economy like germany as well as some of the uncertainty around trade that we've seen between washington and beijing. karen. >> thank you very much already we've got here on the back foot this morning ahead of those forecasts, and we will have an exclusive interview with the e.u. commissioner valdis dombrovskis at 11:00 get socgen has cut its profit target on the medium term. the french bank now expects a return on tangible equity of 9% to 10% in 2020 that is down from its previous guidance of 11%. net profit in the fourth quarter of last year surged, but earnings in its corporate and investment banking business fell by more than half during the period the lender citing a disappointing performance in its market activities. speaking to cnbc socgen's deputy ceo cedric explained the revised targets. >> we have to adjust our plan for this evolution in the

external environment 18 months ago we had in mind better gdp growth on a worldwide basis. we had in mind a better interest rate situation in euro zone. today we have revisited our assumption mainly on the interest rate. the main difference is we had a positive interest rate of average in 2019. today with the ecb policy position it will remain in the negative territory on the short rate then it's where we think that interest rates will start to raise in europe, and this will have an impact of around 500 million euros on our revenues and many others returning today. certain things that have made a changing power plan -- adjusting your plan is a global environment. a geopolitical race today, and a chinese situation like slowdown have whoever visited our gdp

growth assumption for the next few years. still it's positive, but it's a slower pace than previously anticipated. the third question and the third dimension which made this adj t adjustment necessary for us is the requirement in term of capital consumption for our -- it's increasing. we are to anticipate also the rather poor implementation all that which was already the case one year ago, but the ecb capital has increased. >> speaking to our colleague juliana. unicredit has posted a better than expected net profit in the fourth quarter. the results were boosted by a one-off positive tax effect, but without it, the italian bank still would have beaten quarterly profit expectations. reporting a fourth quarter profit of 840 million yearos, well above the forecast of 693 million. zurich has posted a 24% rise

for net profit exceeding expectation. the swiss insurer also proposed raising its dividend to 19 swiss francs a share after achieving 1.1 billion dollars in cost savings over the financial year. coming up next, we're joined by hydro cfo after they missed their fourth quarter expectations this morning wrrks and later in the show we'll speak exclusively to the ceo of pernod richard for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.

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germany's anti-trust watchdog -- it marks the first ever anti-trust decision against facebook in the e.u. and comes on the back of a three-year investigation by germany's federal car tell office. facebook says it will appeal the decision net profit at french oil major totale raised 10% in the fourth quarter helping the company to report a 28% jump in four-year profit the strong results come as the

company shaved record oil and gas production in 2018 arcelormittal had a tax benefit. the woshld's largest steelmaker has launched a $113 million share buyback prap and will increase capex to just over $4 billion. the company expects steel demand to rise slightly this year hydrohas a lower than expected fourth quarter underlining operating profit and says it will miss its 2019 savings targets as output restrictions at its facility in brazil continue to buy norwegian metals producer had to reduce our profits at a refine ary by 50% firing an untreated water spill. the company sent higher raw material costs and an uncertain economic outlook hurt quarterly profits. ivan joins us again, the cfo of hydro. nice to have you back on board two big issues there

talk to us about the outlook and how concerned you might be at this point >> i think -- i mean, when you look at the raw material cost, there's been a significant increase here-over-year. the good thing is when we look into q1, we see raw material prices coming in, which gives us an earnings uplift in the first quarter. >> i want to ask you about brazil we've spoken about this in the past, but since those conversations, it feels as though risks have rizern we have a new government that is seen as very friendly to mining, but just as he returned from davos, talking about building partnerships to try maximize those resources, there is another major problem around mining another major disaster are you concerned about the business climate being impacted by that disaster >> it's, of course, a very unfortunate event, and our heart goes out to the people missing or found deceased already. that's devastating for us it's important to sort of

distinguish between our operations, which is quite different than the backstop we've had in brazil over the last few years, which means that we're quite comfortable with the situation that we have today >> what about the legal risk, because there is also a separate case, and this is a bhp story which is basically a sensitive part of negotiations taking place around settling a lawsuit. are you concerned the cost of litigation could rise, and that's something investors are worried about in terms of doing business on the ground in brazil >> i think every company operating in brazil probably has quite a number of lawsuits that they are dealing with. we have ours also following the event of february of 18, which we're dealing with through the legal systems. we do feel that we have good control of those >> do you want to give us a sense of when you might see capacity restored at the

brazilian operation, because 50% capacity means you have had impact on the numbers. what's the outlook in terms of returning to full capacity >> we have the very important development two weeks back when the state of our metal agency did issue technical note saying that it was fully safe to restore 100% of its production that document we gave to the judge and the court systems who are currently holding the embargoes on and who need to make their decision. the time span and time horizon for, one, the judge will make his decision is not clear, and he will take the time to he needs to make about his decision >> can i ask you the outlook for aluminum there are still tariffs in place, concerns are not global growth slowing how concerned are you these factors come together and present a negative picture for your industry this year? >> well, we look into 2019 we still see a good positive

growth both in u.s. and europe, which are our main markets they are at the slower rates compared to what we saw in 2018, but still good call. >> how are the tariffs impacting the industry because they have been in place for a while, and typically you see disruption took flows across different jurs dicks with tariffs. is that happening no any great extent still as it really moves around 2019? >> this is, in reality, very little direct impact on our financials the midwest premium rose to the extent that it covers the import tariffs we have to pay when we put metal into the u.s i think the bigger concern is more on the macrogeopolitical side whether will be a trade war and what that will do to gdp growth our time. not only in the u.s., but also in europe. >> does it mean you are looking forward to some form of a breakthrough between the u.s. and china and this could be positive for aluminum this year? >> i think all clarity helps in

terms of global trade. i think uncertainty over time is one of the most negative factors we can have for economic growth. >> ivan, thank you very much for joining us today ivan with the numbers that have trigger a negative performance in the stock price coming up on the show, from bricks to brexit we'll be joined by jim o'neill, former goldman sachs chief economist for the next half hour of the show. (danny) let me get this straight. 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!

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welcome to "street signs." i'm karen cho, and these are your headlines shares in french advertising and pi giant publicist tumble as fourth quarter revenue comes in lower than expectations, and the company bramz a slowdown in u.s. ad spending. socgen hands back early gaenz after the lender cuts its 2020 targets as the bank's global markets business suffers despite a beat on fourth quarter net profit >> we have to adjust our plan

for this evolution in the external environment 18 months ago when they were first planned, we had in mind a better gdp growth on a worldwide basis. >> shares in french spirits maker rise as the company raises its four-year guidance and announces a new strategy plan to improve its profit margins we're going to be speaking with the ceo shortly, so stay tuned for that u.k. prime minister theresa may returns to brussels in search of a brexit breakthrough as yourp even counsel president takes aim at the brexiteers. >> i have been wondering what that special place in hell looks like for those who promoted brexit without even a sketch of a plan how to carry it safely. >> let's take you to european markets this morning the action we've seen has been a little bit mixed at the start. the ftse is trying to travel

higher about .1%. some of that is because of weakness in sterling, and that's trying to hold on to the mark this morning patches of red across the board. the dax has been an underperformer down half a percent. the french market trades down by a quarter of a percent telemarket trimming some of the losses we checked in about half hour ago, but now currently on the flat line. a lot of earnings reaction driving these stock markets around this morning. lack of real news on the trade situation with u.s. and china. the markets really stopped trading on some of the enthusiasm as it waits for some tangibles, but earnings having a fairly significant impact this morning yet again. want to take you to what we're seeing on the currency front sterling, as i mentioned, has been weak, and you can see the trade is currently 128.98. broken through 129 down about a quarter of a percent. big day from the bank of england whether we're seeing any change to the economic forecast and also we're watching closely any breakthrough in brussels as theresa may speaks to her

european counterparts, but broadly, as you can see, dollar has been a stronger story. we've got euro trading weaker versus the dollar. dollar strength to the japanese yen, and also the dollar trading higher versus the swiss. the bank of england is widely expected to hold rates today amid brexit uncertainty. the central bank will also release its quarterly inflation forecast jim o'neill joins us nice to see you. >> nice to be here thanks for having me on. >> let me ask you about brexit are we leaving on the 29th of march? >> i think as each day goes by just the sheer technicality of the legislative procedures makes that increasingly unlikely even if it ends up being disorderly, i'm not sure the parliamentary process will allow us to get out on the 29th.

she has to get something agreed in the next fortnight at the absolute latest. otherwise, we won't be able to do it, i don't think, unless there's no sleep in parliament 4 hours a day. >> theresa may goes to brussels, and the message has been somewhat negative from europe about reopening the withdrawal agreement. suggestions are if we get something done, it will be through some side agreement to try and sort of manage the concerns around the backstop what message do you think that sends? do you think that will be enough for westminster and enough of the public to have faith that's not going to reignite the troubles >> so i wonder this morning whether our prime minister is playing some kind of very strange game that she's sort of trying to split the hard core brexiteers, and she's sort of dragged them to a slightly different position than they were before where now some of them are clearly saying they'll

support her bill if there's nice fuzzy words from brussels. i'm pretty sure she would have known all along that there's no way brussels is going to be open to the agreement, as they pointed out perhaps more brutally than they should have done yesterday it was her proposal that they all ended up agreeing to the idea that they have got to come up with some replacement for something that they had in their heads, she was proposing you know, that's not realistic i suspect she's not really expecting them to do that. nice fuzzy words, maybe, but i don't dismiss the possibility that it's, as i say, slightly more machiavellian, and she wants to split the hard core brexiteers, and now give something more to the left and particularly the labour party. it's very interesting to see corbin getting a little bit more

cooperative, and i wouldn't dismiss some further sort of, let's say by conventional standards, slightly unexpected things in the next few days. i have no insights, but that would be my suspicion. >> good explainer there. one idea is that theresa may might have the upper hand at this point because if you look at the mood in the voter community, it feels line there's growing anger. that's why it's between the remainors and the brexiteers that there's fighting that's happening at westminster, the personal ambition that is have soom to the fore, and the lack of agreement to make brexit happen, when voters gave a mandate to the deposit to insure brexit happens >> i think in that sense she's got quiet, let's call it, not a strategic, but she has a tactical strong hand that is quite clear that it's as closure as it can be that, anyway, the population is kind of annoyed with westminster

she does keep saying her job is to deliver brexit. it's not impossible that she could end up making some now surprising shift towards more permanent membership of customs union because there's a lot of labour figures that have pointed out overnight. actually, permanent backstop in a way is like permanent membership in the customs union. one way of getting over the problem is to become a bit cleaner about it, and you don't have the strange issue now, of course, the ardent brexiteers will go nuts about that, but the other side of the own party and the way the labour party seems to be sort of shifting, that could get a partly emtry deal would be my hunch. it would split the tory party, but, you know, she's already said she's going to not be around for that long, and if she sees her prime job is to deliver on that as opposed to rescue the tory party, that could be a twist that happens

or the more rationale brexiteers are happy with more fuzzy words from brussels, and that's getting voted through in the next week or so. >> not getting fuzzy words so far. >> it's not surprising >> rgt thatting the brexiteers how inflammatory is that when we're at this pointed time in negotiations where you are trying to get westminster to agree one position, and then have you the european just pouring more hot water on a situation? >> it's a bit surprising by brussels leadership standards. they're normally extremely diplomatic, even some of the toughest moments with rome and various other countries in the past you don't see that sort of thing. it was quite, quite tough. i can see their frustration and, again, for 48% of people voted to remain in the u.k. and many others, it doesn't look like the

brexiteers really thought about the irish border question at all. it's kind of not surprising. for them to feel their own general aggressiveness, it's -- you're not the only guys that could be mean and tough. some of them have been mean and tough for people it's life. it's a bit over the top by brussel standards. that's for sure. >> can i ask you quickly about the economy in which is stipulatically your bread and butter the bank of england meets today. we've had survey data that has been soggy so far. manufacturing companies stop compiling. employment growth fall to the lowest level since july 2016 services has also fallen to a two and a half year low. yet, the brexiteers say the data is okay. the dme is fine. what would you advise to the central bank that has opened the purse strings. how much stimulus does this economy need at this point >> i don't envy the bank in the

short-term i mean, i have two contradictory views. first of all, as -- i've got a couple of people currently pointing out, the pmi surveys right after the brexit vote, fell dramatically, and they weren't actually accurate. it's a little how it happened after the 2008 crisis. they then collapsed as well. of course, the economy did weaken dramatically, but not immediately. it might be this is the sentiment rather than the scale. here's the contradictory part. it wouldn't be that surprising if it was real i mean, you know, given all this hard brexit talk and, you know, obviously i speak to various business people in my life generally. you know, as we get closer and as the probabilities have got higher, my own pronlt of hard brexit would be 20%, which is lower than others. it's not immaterial.

if you are running a business, and you are looking at risk management issues, it's something you now have to treat -- you know, you can't just think about treating it you have to deal with it, and, of course, a lot of smaller businesses don't have the facilities to do that. it will almost definitely be effecting a lot of people in a negative way how can it be any other? this is going back to the unfortunate language of donald tusk this is the sort of thing a lot of brexiteers don't -- particularly the more ardent radical ones don't seem to even want to recognize as a reality if you have been stuck with the same rules of international trade engagement for 46 years and you got to fear that in another six weeks they don't expect, it's not the biggest surprise in life >> it's a big dose of uncertainty. >> you're staying with us. plenty more to discuss with you. coming up on the show, find out why former fed chair janet yellen says the central bank's next move could be to cut.

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zbloonch the u.s. trade deficit has narrowed imports led the declines, while exports dipped to just under $210 billion the overall deficit for november came in at $49.3 billion versus $54 billion expected by reuters. the decline sent several banks raising the forecast for fourth quarter gdp. treasury secretarystein mnuchin said he will travel to beijing next week and reiterated that trade tensions had not hurt the economy. >> i don't see the u.s. economy suffering a slowdown at this point at all matter of fact, the outlook is very strong as with a group of ceos yesterday they continue to have a very strong outlook on u.s. business. i think we've made a lot of progress already on trade, and i think the outlook for the economy this year is quite strong matter of fact, the u.s. is outperforming the rest of the

world, and we continue to see a lot of capital coming into the u.s., creating more u.s. jobs, building u.s. factories, so we're quite pleased with that. >> meantime, fed chair jerome powell seconded that sentiment saying the economy is "in a go ahead place. speaking to academics in d.c., powell said the u.s. has so far been resilient to external uncertainty, including brexit and global growth concerns powell's predecessor spoke to cnbc exclusively overnight janet yellen said there are still down side risks, and the fed's next move may well be an interest rate cut. >> if global growth really weakens, and that's also for the united states or financial conditions tighten more and we do sewe a weakening in the u.s. economy, it's certainly possible that the next move is a cut. >> let's bring jim o'neill in

again, chairman of chatham house. what do you make of those comments so far we are on the page the central banks are exiting, but to talk about rate cuts, and it's not just the u.s. australia, new zealand also a potential move lower what do you make of the uncertainty for investors around monetary policy this year? >> well, unless something has changed in the six years since i stopped doing this every minute of every day of my life, i mean, that's life. you know the uncertainty is part of what makes somebody that's trying to advise or invest better than somebody else if you can anticipate it better than somebody else. that's why you are getting page.

>> that makes it slightly different, but i'm also reminded just listening to that on the way you ask in the early days of the asian crisis, back in the late -- towards the he wanted of the 1990s, you know, the mood in the u.s. was, oh, yeah, we're resilient and robust and all the rest of it surprise, surprise, after some knock-on effect through financial conditions, the fed did end up cutting rates. my reaction is it's rather gratifying that they're sufficiently flexible. the thing i really took away from powell's comments last week linked to what that clip you had

of janet yellen, is that despite her going, he is just as focused on financial conditions as she was, and if financial conditions do tighten unexpectedly further in the u.s. and then we have a knock-on effect with the cyclical developments in the economy, it would be certainly rationale that they gain further signs of thinking that way, so it's kind of i admire that you know, i often look at it a bit more detached these days given my new life, and this sort of dramatic world that's supposed to be tightening, a good central bank should be one that is flexible to move in any direction next moving one way or another, but i think it's certainly important that the fed got off this we're on autopilot for tighterning whatever is going on, because that looked to me in the fourth quarter as, oh, it was stupid. >> let's flip the other side to china. of course, you coined that

phrase >> it's on my forehead >> it is, indeed china, very weak growth as we closed out last year 6.6% raise some suggesting we could go back to 6.3% this year. kwhaets the outlook of trade doesn't get solved or trade does get solved, which seems to be how the market is anticipating still feels like there's a fight over technology. what do you make of how china -- >> china, china. you know, you have to put it in my view, it has to be put in the right percent pengt. even though it was the slowest growth at 6.6 for 2 years, the change over the year before was still equivalent to creating another australia. >> right >> for a big presentation i'm doing in the next couple of weeks, i actually looked back at the whole profile that made the story adds well known as it was, and we said that the decade that is about to come up next in two years, china would grow by 5%. in the beg scheme of things of where china has come from, anybody like myself that's been looking at it for 20 to 30 or in

my case 30 years, it's not a surprise that china is slowing the fact that china is slowing shouldn't be freaking out people in the way that it is in my opinion. the demographics have turned it's just by definition harder to have the same growth. some of the slowdown is greatly because of what they're doing themselves all that said, there is one bit that does bother me, and it's not the trade thing. it's the fact that the chinese consumer is slowing. that isn't supposed to be happening. >> right >> and if that carries on, that would be worrying. i continue to think, as i have done for years, that the single most important thing in the world economy is the chinese consumer >> very mixed picture on the chinese consumer from apple and through louis vuitton. >> our own few companies that do business there apple, some of the big domestic chinese names. chinese policymakers have got to do something about that. >> jim, thank you so much for joining us today >> my pleasure >> jim o'neill with us, chair at

chatham house. french spirits maker posted its four-year profit, and raised the outlook for growth after strong chinese demand helped to boost first half operating profits above estimates. the firm also promised to lift margins and increase sales as part of a new three-year strategy the announcement comes as pernod feels pressure from firm elliott.paris. what lies ahead for the drinks company? >> well, karen, i'm very pleased to say that i am joined by the chairman and ceo of pernod ricard who can answer that question a lot better than i could. you reported today a very strong set of results and raised your guidance for 2019. a lot of strength coming from china. are you seeing any signs of change in behavior or impact of economic slowdown in your chinese business >> listen, growth came from basically very diversified

sources. of course, china, but also india, the u.s., eastern european markets that's what i call good very strong diversified growth. of course, china posted a very strong top line growth of 28% for our first half, which finished by december it was a strong first half generated by very strong consumer dynamics in china over the last six months. now, to be fair chinese new year is this week it happened two days ago on february 5th we'll have the real underlying consumer trends for chinese new year in a few weeks from now, but overall very strong results in china >> and in terms of your new 2019 guidan guidance, you have raised your profitability guidance as well as your margin guidance, and the activist investor elliott has been very vocal about pushing for margin improvement do you agree with them on their call for you to bring your margins more in line with diagio, or is there something that elliott don't understand?

>> it's all about -- we basically drafted a three-year strategic plan last year approximately 1,000 people across the group -- across all corners of the globe worked on that plan, and that plan was based on two things. what we've done over the last three years, which we've been building the foundations of our future growth, and, second, focussing on profitability as well what we announced today is a result of that strategic plan, which we worked on last year we're in the first year of the plan, and you already see the results. our guidance this year is we're already going to increase our profitability by 50 basis points, and we believe we can do so next year and the following year by roughly 50 to 60 basis points per annum provided the business grows anywhere between 4% to 7% >> now, it's not just margins that elliott has been harping on about also issues around governance and portfolio transformation they've been pushing for. how would you describe your dialogue with elliott at this point in time?

>> well, as normal, to be fair, elliott is one of our shareholders we like having an open and construct i dialogue with all our shareholders, including, of course, elliott, who is now a shareholder and has been for the last several months since november as far as i can tell. we have an open dialogue, of course, and so do we with our other shareholders >> excellent that was the chairman and ceo of pernod ricard here in paris after a very strong set of results. back to you in the studio. >> thank you very much for that, juliana. publicist shares are on track for their worst day since 1992, and weighing down rival wpp after the french firm missed fourth quarter revenue forecasts. it cited cost cuts and the streamlining of its structure. shares meantime have fallen to their lowest ins level since june 2009 after the german tour operator slashed its profit outlook. you can see the shares tanking by 15%, 16%.

coming your way still, stay tuned for our special coverage of the yurp even commission's latest economic forecast and an exclusive interview with valdis dombrovskis. don't forget about the concerns about the economic picture globally and europe is key to that we're looking forward to these forecasts today. in the meantime, u.s. futures and a quick check of how the market action is shaping up early on negative seems to be the course of trade this morning investors also seeing a reversal in some of the stock action from recent strong sessions that we've had. that is all for today's show i'm karen cho. for our u.s. viewers worldwide exchange is up next, but stay tuned for our ongoing coverage today.

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it is 5:00 a.m. here at headquarters and 6:00 a.m. in brazil the nation's opposition leader reportedly planning to replace u.s.-based citgo's board we're going to have more on this late-breaking story, and literally show you where the maduro money may be hiding gejerome powell, more on his comments last night. the burrito is back. chipolte shares shooting higher after they crushed earnings expectations apple reclaiming the poe as the worl