happy tuesday. welcome to "street signs." the vice premier will visit washington d.c >> bmw shares trade lower as the jermtan carmaker is hit by a $1.4 billion charge linked to an e.u. investigation shares sync as the belgium

chemical group cuts its full-year outlook from the cuts in the oil and gas industries. a strong signal for telecos. ilead and selner shares after they strike a $2 billion euro deal to sell mobile towers to its spanish pier helping to lift the entire sector. a roller coaster session with the dow swinging more than 400 points intraday. all the majors from .2 to .3% weaker after being down at one point. overnight equities are also recovering a little bit. up about 1% to 1.5%. yesterday was the worst trading day in three years for chinese equity markets we are seeing others come back into play. japanese markets back from the holiday paying a little bit of

catchup there. sentiment is a little bit better as you can see it's up .1%. that's -- they will be attending trade talks earlier this week, even though the threat of extra tariffs is still very much real and is hanging over discussions to begin with. the picture for europe is slightly better, of course, than what we had yesterday. up about .1% let's get into some of the individual forces. break it down in a little more detail for you yesterday a weak session for the other three european indexes today we're trading about 16 points lower to put into context, though, not so bad relatively given some of the losses we had on the other indexes yesterday. dax trading up .1% marnl naturally firmer

cac marginally weaker. ftse mib up 6.6% one thing to watch out for from a macroperspective later on this morning we'll be getting the european commission's updated gdp forecast for the e.u. economy later this year. all eyes, of course, will be on italy. that's one to watch out for insofar as it's going to affect the budget forecast, and germany as well given the weakness in that economy over the last six months telecoms also 1% some positive news out of vodafone there utilities, we had performing quite well on the down side we've got banks down .8% also, autos, i think this one is interesting because not only do we have a slightly weaker earnings from bmw dote, but this industry as a whole is really clouded under the threat of section 232 tariffs.

it's but reasons why perhaps other china-related sectors in europe are recovering today, but autos not so much. there's still that threat of section 232 tariffs. oil and gas also underperforming a little today down .3% in line with some of the weakness we've had over the last couple of sessions.

with that let's get comment e expert commentary on this. we're joined on the show it's great to have you with us >> pleasure. >> you know, how are you thinking about the developments over the last 24, 48 hours as i mentioned, it has been a roller coaster for stock markets, but are you working on the assumption that at least some form of a trade deal will be reached >> well, it's a good sign that the vice premier is traveling to washington to head up that delegation obviously, had there been a complete breakdown in the talks, one wouldn't have thought that would happen the markets, of course, have responded accordingly with the bounceback you mentioned this is, however, really important. it's important not in its own right because of what we saw, for example, on monday, but for the equity market to continue to make gains this year, we do need to see a rotation into more cyclical sectors those that are likely beneficiaries of improving growth they overhang of trade tensions has been probably the single biggest reason why parts of the world economy emerge in germany.

cyclicals more generally hav lagged getting a deal done this week or at least signs that we'll get one done before long is very important for the overall tenor of the market. not just for this week, but beyond that as well. what do you think that telds you? >> it's true china has outperformed it preceded it let's not forget, the u.s. market opened significantly lower and then made its way back once the news and the discussions began that there was going to be high-level meetings tend of this week. i don't know that we can read too much into that i do think the market is a little on tender hooks around that it does matter for rotation and for growth expectationed this year

skblienchts moving from market to macroeconomics. if you look at the underlying data for the last six months or so, you could make the case that the end of fourth quarter last year, first quarter this year represented a low point in the current cycle. we saw that trend start to change in recent months. if these talks do break down is that at risk, do you think >> i think it's an excellent question, and it begs perhaps one other, which is why did, in fact, the world economy slow late last year fiscal policy was, if anything, easy the major reason why, in my view, the world economy slowed last year was because of the slowdown in trade, which itself is linked to some of the uncertainties around u.s. trade negotiations with china, brexit and a few others therefore, that nation rebound that you alluded to is very much linked to the improving prospects that were in place, that we would avoid hard brexit,

that we would avoid a trade war between these two major economies, so if we call that into question, we, i think, begin to call into question this idea that the green chutes have some sort of better prognosis for the world economy and can, in fact, be realized as we move forward in 2019. >> how significant do you think the apparent resilience of u.s. consumers was to that? >> it helped it was a stabilizer. and, by the way, we now know looking at q1 european data that the resilience of final domestic demand in europe also provided a cushion. particularly since and somewhat surprisingly outside of germany that is another economy. the health of the household sector globally which ichts i is a function of robust jobs growth and some income growth for that sector definitely helped cushion the downturn that we saw in world trade and manufacturing last year, but it alone is probably not enough to maintain the kind of positive tenor of capital markets. we need that second source of

support, which is lirnged to trade production and the cyclicals that do respond from that >> and equally, talking about sources of support, central bank dovishness where, that has been the very big development for this year. the fed have completed u-turns the market has gone from expecting rate hikes to rate cuts now do you think that would be another major risk to markets and the tragedy accountry from here, if the fed, for whatever reason, starts sounding a little bit more hawkish or at least not as dovish as what the market is expecting. >> the willingness, yes, of the fed and also i suppose we should throw the ecb into the equation to accommodate, let's say, the disrupgs in capital markets, helped also to ease those tensions no doubt about it. that's probably had a saluatory effect the fed was probably never going to be quite as accommodative as the forward curve suggested. that is, the idea that the next move of the fed would be a rate cut.

generating jobs twice the growth of the labor force with inflation generally speaking more likely to rise than to fall the next move of the fed probably is a further snuging of monetary policy, but the fed has time on its side because inflation is not yet at target if you look at the picture painted today, bond markets are a lot more negative about the u.s. growth prospects and what the fed may do from here where. >> it's easier to see in the bond market or more specifically in the forward curve, which, again, priced a higher probability of a rate cut than it did of a further rate increase from the fed. all markets, of course, responded to that, so some of the uplifting global equities was surely due to that stance that was perceived to be in place from the fed.

>> if we actually have a trade war, it will be bad for the whole world, and could be very bad depending on the extent of the war. there's times in negotiations when you talk tough. the one thing you can't do, though, is you can't shake your fist first and then shake your finger later on. i mean, that is not a technique that works well. if we ended up with some trade settlement that involved tariffs on both sides, i don't get excited about it at all. i view it as part of normal life generally speak, i think a good settlement is better than a world war. >> i think good trade relations are incredible win-win for both

countries. i understand why market are a little bit worried that these tariffs are going to get higher and higher >> bill gates, the founder of microsoft speaking there to becky quick. 0.6% in march after two months of rather steep declines that rebound fell short of analyst expectations for an increase of 1.5% during the month. >> more negative data out germany. the european union is set to release its spring forecast later on today the european commission is expected to confirm its estimate of 1.5% brsh snoo dutch science

company dsm has hiked its full year guidance after it posted better than expected first quarter core earnings, but weakness in some of the firm's asian markets meant that sales figures came in below estimates. cfo geraldine told cnbc her company's performance was encouraging despite the difficult macroeconomic environment. nas very much tlaings to the very good performance of our nutrition business, but also actually the resilience of our materials business that was able to retain stable earnings despite the current climate environment. now, looking back to these numbers, that puts us in a confident position to be able to raise our outlook for 2019 to a high single digit ebida growth for 2019 >> that was one chemicals company, dsm, posting good numbers. however, belgian chemicals company sulva has a decline in

demand in several markets for a decision to lower its full year outlook. if you want to get involved in the conversation, you can you can do that by tweeting us @street signs.cnbc or tweet us directly that is with a w not a v. >> indeed. well, coming up on the show, the u.s. warns of a credible threat by iran as it deploys a carrier to the middle east - i love my grandma.

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welcome back i'm going to bring you more details on european corporate earnings this morning. ab imbev has reported a rise in

profits. the revenue for the period rose 5.9%, but those numbers still missed expectations. the world's largest brewer reported that overall beer volumes have grown 1.3%, and the volumes in brazil had seen double digit growth. the firm also confirmed it could list a minority stake in its asian business >> and switching over to autos, first quarter profit at bmw fell 78%. a 1.4 billion euro legal provision related to an e.u. probe into emissions technology offset higher delivery numbers on the firm's luxury vehicles. the company also spent 36 poerz more during the period to refit its factories for electric vehicles and this also impacted profits as well. you can see the stock is down about 1%, but in general autos is one of the sectors lagging in europe today >> meanwhile, french transport giant alstom has raised its full year dividend on the back of a strong auto book european authorities blocked the merger with siemens earlier this

year you may remember seem ernz posted stronger than expected profits while adjusted earnings there rose 44% from a year earlier. >> ilead says it's in talks to sell its mobile tower assets in france and italy to cellnex as part of a 2 billion euro deal. they say they expect both transactions to clouds by the end of the fourth quarter. they post a rise in fourth quarter sales as they return to growth in france >> the board of anadarko has reversed course and has backed houston-based objection dental petroleum's 38 billion dollar bid. occidental had scrapped a shareholder vote that would have taken place yesterday. in a statement occidental said it's pleased the board had decided its offer was superior to a separate 33 billion dollar bid from chevron, the world's

second largest oil and gas company. chevron has four days to respond itself patrick shanahan -- adding owe we will hold the regime accountable for any attacks on the u.s. or our interests. >> imf managing director christine lagarde says it is imperative that trade tensions between the u.s. and china are resolved lagarde warned the dispute between the super powers is a threat to the global economy take a look at what it's doing to the mining sector, which, of course, is largely reopen here in the u.k. after yesterday's bank holiday you can see angelo america, and glen corps, they are slightly below the flat line. all trading lower so far this morning. meanwhile, bhp, rio tinto

trading higher that is one of the sectors with a lot of exposure to global trade, and in particular chinese demand let's talk to daniel, the analyst at commerzbank thanks for being with us we've had ten rounds of these talks between the u.s. and china now, and i'm just wondering what do you think the comments from president trump over the course of the weekend, those tweets on sunday morning, did to the area of your own focus? >> well, obviously after the first knee jerk reactions the markets have called down, again, somewhat because it seems that many market players seem to be relieved that the trade talks are continuing at all. the prices, in particular the metals, report to some extent because the u.s. stock markets

recovered in the late afternoon yesterday and china's markets are not falling any further. >> do you think it's the central focus of metal chapg changers? >> no, after trump's tweet, so this will definitely be the center of the focus on the metals markets before the weekend i would have said let's have a look at the spring meetings of the international study groups because there's demand estimates for the metals markets after the weekend i think it's all looking at -- all are looking to washington to see what's happening there >> and, sir, beyond the immediate news surely one of the more important drivers is the state of the chinese economy

i'm curious to hear how you see chinese demand for steel, iron ore, mining products are panning out the says rest of this year, particularly in light of the most recent stimulus that the authorities applied there. >> in particular due to the stimulus measures implemented by the chinese government and the central bank, so we expect quite robust demand for the industrial commodities, and if the trade talks really collapse and the trade dispute escalates further, i think then the chinese government will step in and implement even further stimulus measures which, in turn, should support demand for metals going forward. >> industrial metals should have a natural floor because the authorities will be incentiveized. let's switch and talk about precious metals. were you surprised yesterday on such a big down day, gold wasn't doing better

>>. >> it's motors a riddle for quite some weeks now not only given the rising geopolitical tensions, but the very loose monetary policy of many western central banks it actually showed some trade much hire, but obviously, it doesn't. you would i this on a day when equities were being hit, chinese equities, traditional safe havens like dollar-yen, like gold, would perform better what is it about gold that has lost its -- so to speak? >> well, we are still seeing many etf investors selling holdings for whatever reasons. we don't know, which & we don't have an explanation, to be honest in general i think many market participants still have hopes

that -- sooner or later and that's various flash points that do not flare up further. that's probably keeping them in check at the moment. >> when it comes to oil, do you think in the minds of energy traders that the threat to demand represented by this dispute between the u.s. and china outweighs some of the supply issues we've seen in recent months. >> thanks for your time. he is joining us life at commerzbank. >> moving to central banks, my favorite, the rba has left rates unchanged despite a series of weak data readings for the auts

raelian economy. retail sales came in at their worst level in seven years, and first quarter inflation was 0%. >> they're playing wolfer hatchton >> u.s. president donald trump, he is awarded tiger woods the presidential metal e medal of freedom. that is, of course, the highest civilian honor in the united states.

it's a happy story i think we can agree >> all right the owner of maximum security, the first ever horse to be disqualified at the condition ken derby, has lost his appeal to overturn the decision the kentucky horseracing commission said it made the decision after a thorough review of the race, but owner gary west has promised to fight a lawsuit in due course. he has also his race horse out of the upcoming preakness competition. the plot thickens. also coming up on the show, talks between the u.k.'s major parties resume today to break the brexit impasse we'll get the view of the former trade minister that is lortd maude. that is coming up.

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is. welcome back to street signs. these are your headlines this morning. >> chinese's economy minister provided that.

shares slide as the belgium chemicals group cuts its full year outlook due to declining demand from the auto and oil and gas industries helping to lift the sector >> the move salgts positive, or less negative compared to the trading we had in yesterday's session. you can see right behind me moderately apart from the u.k., i'll get there in a second,

central dax is slightly up >> the threat of extra tariffs is hanging over the complex, and it was the major reason why equity markets did so badly yesterday. playing a bit of catchup here. 20 points lower on the session today is the day that brexit discussions will resume cross-party talks between the labour and conservative parties. we'll have to see how things evolve there >> switching on, let's take a look at foreign exchange today, and the theme is of moderate

dollar weakness. dollar is beginning to pick up speed. dollar-yen, the yen trading one-tenth of a percentage point firmer we see japan is back from golden week now. the three majors ened the day .2%, .3% weaker. looks as though all three of them are going to open up in the red yet again today. why we about from here will be a function of how the trade talks

progress bleks it talks are due to resume today and to discuss this we're joined by fran sir, a senior advisor to covington and a former trade secretary as well as a host of other former titled inside the conservative party. >> well, it hasn't done a lot of good, but it's not over yet. it needs to be dealt with and resolved and finality. there's not going to be complete finality, but, you know, i always remember the -- in the days just after the referendum, someone saying, well, of course,

there's less unsesht than there was because we know that brexit is going to happen now nearly three years after the referendum, we don't know that, and, of course, in normal circumstances, a normal process by the time you get towards the end the options have narrowed down this is unique in that we're right at the end, past what should have been the final point and as far as i can see, every single combination of substantive outcome and timetable remains open, and that means maximum uncertainty for business. even if there is a vote, there is a deal, and it looks to me like that is possible, there's i don't feel a further process of

reaching a final trade deal that will take two to three years, i would guess. i think we do need absolutely to get on with it. >> if there is a big defeat, what does that mean is this. >> on one level it doesn't mean very much. if we do leave the european union, either the mep's won't take their seats, or they'll only take their seats for a short period on one level it doesn't really matter, and it's not at all certain that the elections will actually happen. is it damaging to our

reputation yes, i mean, this is such a wholly unique set of circumstances that i don't think that damages lasting as long as we sought ourselves out. this is a party with a vision and the ability to act competent tily to deliver, to execute the mission and the vision >> can i ask you to consider the political landscape beyond the conservative party when you consider the corrosive impact of this very olarizing issue, brexit, on both major parties, and certainly the local elections we saw last week, the strengthening of some of the smaller parties, do you have concerns and should businesses have concerns that long-term woel see a lot more legislative

gridlock because there won't be such easy absolute majorities in the lower house of commons >> everyone has been talking for decades about the grip of the two-party system being wree dusd, but then in the 2017 general election the two major parties got their biggest combined share of the votes since, i don't know, 1960, i think, which was surprising. they've been rebuilding. the impact of the brexit party, well, if brexit happens, then the reason for the brexit party disappears, although i doubt whether nigel will politely leave the stage at that point. it's really hard to predict.

i think it could be that this damages fundamentally damages both major parties. change u.k. hasn't had that impact, but in early days i've given up predicting what's going to happen. >> sir, i want to bring it back to markets, and you probably heard me talking about sterling a little earlier there's some hope where expectations that potentially these cross-party talks could yield a positive outcome and some form of middle ground is agreed on the tune of some form of a customs union headed in that direction that obviously would be a

positive thing for markets my question is there any guarantee that will get passed through parliament >> no. no guarantees at all i mean, it looks to me that the -- and i have lived and breathed european matters for much of my political career. i have given up in the prediction game. >> if you don't mind given your role as former trade minister. if you look at the sunday morning tweets from the u.s. president about u.s. and china, do you really think in your heart of hearts that the u.k. post-brexit is going to find it easier to strike an advantageous trade deal especially on southwests under this current administration >> no, not easy, but not impossible either.

it doesn't have to be completely comprehensive, and i was doing the negotiations in the trans-atlantic trait and investment partnership, which could and should have been done under the balm administration. snoo this is after lufthansa has said they would make a non-binding offer for the airline. this is news that has just broke. you can see a sharp reaction in

thomas cook now up about 7%. at one point we were about 8% higher when the news just broke. >> the vote was narrowly won by the opposition chp in march. the first time president erdowan's party has lost the city in 25 years the lira has fallen 10% since just before the elections over concerns the uncertainty would delay economic reforms we're also trading about 1% weaker today as well on reports that thattist an buhl mayoral election will be contested.

>> they were released under a presidential amnesty program their case had sparked international outcry about the state of democracy in myanmar. reuters said the pair had not committed any crime. >> in other very positive news, at the duchess of sussex has given birth to a baby boy. the highly anticipated birth was announced on the couple's instagram account, and the duke of sussex spoke to reporters shortly after prince harry said the baby was a little bit overdue, but that mother and child are doing well the royal baby who is seventh in line to the british throne has yet to be named and yet, there were reports yesterday suggesting that they were going to choose an unusual name that would bind both the u.s. and the u.k. your guess is mine >> i make no predictions if you want to get in touch with us on twitter at street signs cnbc you can tweet us directly.

i'm at willem marks and jumana is @cnbc. a chinese tech stock struggles amid renewed trade tensions we'll get the latest that is coming up next

sfleenchts u.s. trade policy is around a quarter of international chief financial officers surveyed by cnbc highlighted the tensions created by president trump's tariffs threat as a top risk for the year ahead consumer demand also featured prominently. european korpts are most worried about trade. more than half of the respondents labelled trade tensions as negative u.s. cfo's are less kerntd about the issue, but only 15% see the policy as positive, and asia pacific-based companies seem to take a more measured view. up to 30% consider the developments to be positive for their businesses despite those trade and consumer concerns, the cfo council are positive about the u.s. economy. they believe it will improve

quarter-on-quarter the euro zone remains stable in their eyes, but the u.k. is expected to decline for another quarter. brexit is, in part, to blame, they say cfos are divided on what could happen next. the majority anticipate another extension to the divorce talks while 20%, that's one-fifth, think there will be another referendum another one-fifth of those surveyed expect westminster to reach a deal by the e.u. by that new october 31st deadline. only 2% think the u.k. will actually leave the european union without a deal for more from the global cfo council and that survey, you can head to our website. that's cfo council.cnbc.com. >> interesting that only 2% of people think the u.k. will leave the union without a deal all right. renewed trade tensions have platsd fresh pressure on chinese tech stocks with e-commerce giants alibaba and social media company leading losses on the cnbc china trade index that's ahead of another

potential tech flash point the extradition hearing of huawei cfo in canada tomorrow. what i have seen this year is a recovery in a lot of those stocks, and that's why you have seen big rises these blips in the market seem to be just that because what these companies have demonstrated this year is that they continue to grow. the likes of 10 cent and alibaba

have huge audiences in china they're trying to spread into internationally. they have little exposure to the u.s. particularly in says case of 10 cent alibaba more it does rely heavily on importing and exporting of goods, but it still managed to weather some of that and continue to grow in other areas. these are still very solid businesses with huge audiences growing quickly. we know that this trade battle between the u.s. and china very much is about technology as well where. technology is a very key area of dispute. we see that with companies like huawei dragged into the mix, and it's not just the chinese tech stocks that we've seen some of the price action on. over in the u.s. as well, some of those companies that are more exposed to china were hit yesterday in the market. the likes of apple, of course, china is a key market, but it also relies on the supply chain in china qualcomm, a huge chip provider to many of the chinese

smartphone makers. its share declined yesterday in u.s. trade it does seem to be, u know, effects both in the u.s. and in china. one name in particular is zedte was down yesterday today only down relatively for .1%. that was archent giving us the color on chinese tech stocks i want to bring in daniel, the managing director from equity research at web bush securities to give us the u.s. angle, sir thank you very much for waking up early to chat to us we had a tech analyst come on the show about a week ago, and we were asking about what could potentially gowrong to the tec outlook from here.

>> no doubt this is the biggest risk on tech stocks, and it's been an overhang in the market, but ultimately really comes down to what the street needs to see is a deal. that's why in terms of trump's tweet on sunday night, it sent a ripple effect across the industry i think investors are looking at it as the bark is worse than the bite it's key that a deal does get reached. especially for nams like apple and semistocks those are the ones front and center that are most impacted in this deal. >> i just want to ask, in termsz of the imports, those coming from china to the u.s. that have not yet faced tariffs that mr. president trump has now talked about facing tariffs, how significant a chunk of those imports relate to the tech sector >> well, it's really right now i think the fear is that if a deal was not reached, what this could do to the smartphone industry,

and we'll call it the whole sort of food chain in terms of asia right now it's been, you know, i would say, tepid in terms of the impact i think it's more on consumer electronics in terms of where some of the impacts could be felt, but the broader fear, what's really sort of the -- what keeps investors up at night is the shadow of a broader trade deal, not happening, and that could affect smartphone. that would be the whole tech food chain remember, that also impacts even software companies that import chinese tech stocks. how does that relate to the conversations have you with those in the tech sector how positive are they about the long-term potential outcomes from these discussions

>> i think there's definitely, like, two sides. i mean, one in terms of from an ip perspective this continues to be a hot button issue in the valley companies like microsoft and just how impacted they've been among many others in terms of piracy and other issues. in china it's viewed as this is the time to draw a line in the sand, where you could actually reach some sort of agreement that would put away issues and really enable software companies to sell into chooirn no doubt, look, a trade war is something no one wants to see here. that's why yesterday you saw the knee jerk reaction the stocks were down significantly, and then you saw

them come back throughout the day. i think right now everyone is realizing there's a game of high stakes poker, and i think there's a view that maybe trump is playing with house money. >> right >> in terms of the market being at all-time highs. >> talking about this game of high stakes poker, this is a story that has been ongoing for more than 12 months now. it's not a new development to the market my question is whether or not you have seen companies alter some part of the way they deal with their supply chains or even geographic jurisdiction based on the fact that it's unpredictable what could happen with these trade talks. >> yeah, it's a great point. we've seen about 10% to 15% maybe potential impact in terms of, you know, smartphone companies and manufacturers looking at india i think that's probably the biggest area we've seen more looking at india for potentially moving into manufacturing there if it a trade deal is not reached and this thing gets draconian going into the summer.

that's the biggest impact in terms of india and potential area if china continues to be an issue. i think right now it's a wait and see attitude, and i think there is strong hope that a deal does get reached, but if not, that's where i think the biggest beneficiary could be india in terms of that market, especially on the smartphone side >> excellent daniel, i'm going to leave it there. thank you for ag the time to chat to us daniel, deputy -- now, speaking of the tech sector, let's take a quick look at u.s. futures before we head out dow and nasdaq, s&p, all seen lower at the open. that's it for the show >> worldwide exchange is coming up in just a few moments time.

>> it is 5:00 a.m. here at cnbc. breaking trade news. china is coming. their top negotiator will be in d.c. for this week's trade talks. we will take you live to beijing with reaction. the comeback kid wall street staging a remarkable recovery despite the ongoing trade tensions, but what's in store for today? all you history buffs need to listen up. japan's stock market has done something it has not done since world war ii we'll bring you that incredible stat chevron, you were are on the clock. a major update to the friday night fights taking place in oil in the permian basin and a big bet on your pet.