welcome. >> these are your headlines in london >> european echo feeds break a three-day losing streak. and sets the stage for an insurance cut later this month >> based on incoming data it appears uncertainties around trade tensions and strength on the global economy continue to egg on the u.s. economic outlook. while stocks lead gains after crude prices hate six-week

high ahead of what could be a major storm of america's hurricane season $1.4 million on the table, which also races its guidance, sending shares to a three-month high >> and three shares sink after they cancelled the $4 billion listing for its uk live business from institutional investors. big news out of waux d.c. where federal reserve chair has said cross currents have reemerged. and that they will quote act appropriate.

there will be a rate cut july meeting minutes from the june meeting, they showed there was an increasingly strong case for rate cut in his testimony in congress powell said issues may negatively impact future growth. >> we see the economy as being in a good place and we're commit ood cruising our tools to keep it it there. as we discussed the overall economy is performing reasonably well but what we call cross current currents principally trade developments and we see these and sniffinant partis it.ssaw that as weighing on the it outlook and calling for posabl more accommodated policy >> the fed chair was also asked

about the pay roll figures >> the straightancer answer to question is no we did get a chair that was positive u.s. data came in about as expected had it bought ttom line for me continue to weigh on the outlook. in addition inflation continues to be muted. and those things are still in place. there you have it. the fed chair essentially cementing the case for a cut at the end of this month. the question is how big of a cut are they going to go for and is this the beginning of a full rate can cutting cycle just to tell you what the market is pricing in, the basis for a cut have gone up from 3% to 27% post toum. so there are a few people out there expecting the feds to go for the 50 basis point cut

and it did vindicate some of that expectation with some members of the committee judging they would be warranted in the near term. so all of that has been very positive for stocks. and we saw the s&p break through 10,000 and the tech index overnight, asian equities seeing a bit off light in them on top of optimism in the u.s. coming nothing to these world economies. and the picture. while we're trading in the green, perhaps not as positive so this is the picture for europe er the good news is we 're bucking the negative trend let's talk about the breakdown per country.

as i mention every single one of these entities is up you're seeing a big risk for home builders today. some positive numbers coming out of the grade housing survey. they're trading quite nicely today and oil clubs seeing a bit of mix in the early hours of trading. and 1/10 of a percentage point you want to look for indications off that and the index continues its performance over the last couple of days, particularly after the positive development in the political front last week. so let's talk about sectorers and the composition where some of the leadership is coming from oil and gas up 1.3%. and the beginning of the hurricane season and another big draw down in u.s. inventory.

so that's boosting the stock price higher for oil and gas stocks are doing well. and on the down side we've got chemicals down about 2/10 off a percentage point dsaf with the profit warning for the year so ever since we've seen that te tech underperform. let's talk about the reaction here we've got trading at 180 now and as i started off the commentary hot the marked issing in terms of rate cuts. so naturally you are going to see some reaction in the two-year notes here. we have rallied a couple of basis points to give you a little more contact. last friday, the two-year also trading at 182

we valued about two basis points from then. we have trading at 205 what's interesting is last week weerb rr trading at 204. so we've actually come up a little bit since that. so the curve is twerking a little bit and intermediate going up a little bit that's healthy that's what the market wants and the fed wants. well, it's no secret president trump has increasingly called for an interest rate cut. asked jerome powell about that criticism. >> you got a call from the president today or tomorrow and said i'm firing you. pack up. it's time to go. what would you do? >> of course i would not do that

>> i can't hear you. >> my answer would be no >> and you would not pack up and you would not leave? >> no, ma'am >> because you think the president does not have the authority? is that why you would not leave? >> i kind of said what i intended to say on the subject and what i said is that the law clearly gives me a four-year urm it and i fully intend to serve it >> here with us in the studio. if chairman powell communicated anything to participants like you, what would it be? >> we look at it from a european perspective. the first is that the euro is likely to stay under down withward pressure. the fed indicated they're only likely to cut by 25 basis points the second implication is that

the market is going to respond to lower rates in a positive way and we expect the same in europe expect a valuation argument with lower rates. had it third indication is that the fed is looking at the data and the data is getting p progressively more negative. data watching. watching the trade outlook and we think they will also pivot and become more dovish and as a consequence when they have their meeting the 25th of this month, we think they will make further comdative measures and the final implications we think is the out flk equities needs to be shifted within portfolios what you've got with a slower trade environment is the likelihood they'll begin to underperform and value will

begin to out perform growth. >> i just want to it pick up on these points i want to pick up on your second point. the feds looking at the data and we're playing a series of from yesterday where i think the fed chair mentions the word uncertainty many times how much of of that is actually felt and the reason i'm asking that question is because you could make a case that a lot of the it uncertainty that the feds are fighting right now is clearly on back of the so-called trade war between the u.s. and china so it's reducing resolution on that front >> on the trade war where you're not expecting an imminent resolution and there was some progress in the talks between the u.s. and chinese. and you think those trade

escalation issues will progresses to the eu as well but do think there is an element in what you say boss the fed, at the end of of last year we hot was overly hawkish and expectations were overly hawkish and now there's a pivot the other way. >> see down side the rest of the year which is interesting because they've been in a tight range. and you look at again -- this is a game of expectations, right? i was saying by the end of 2020, the market is pricing at let's say 20 basis points at most. so on a rate cutting cycle competition, the fed are winning. >> we think they're going to do more than rate can cutting so specifically they're go itting to announce, we think a second round not of the july meeting.

mor morer likely in september. in addition they're going to mention the positive rates for banks. and they've already anounlszed a program third oo give cheap loans to corporates. they do more on a broader scale than what the fed is doing therefore we think the impact on the euro we think is going to be negative >> obviously the focus has been hon u.s. and china you have a british newspaper reporting that they have a deal in shambles. french and 301 investigations. and i'm just wondering do you think the european investors are sufficient n sufficiently priced in the mix >> no. and specifically think risks upcoming the first has been commented on

and that's the u.s. two,,er 22 investigation we think is going to result in europeans being found guilty and the tariffs being suspend said and the u.s. using them as a broader investigation and the other areas they're looking to make progress is agriculture. they want the eu to import more of their liquefied natural gas that's prob rumatic because the eu a year ago said they would. but now they have them on stream had it third area that's going to be contentious is airplane to what extent they should be subsidized so the answer is no, the market has not discounted further trade issues with europe >> so how do they make money your first trade is towards euro and where you want to be in terms of value growth in europe. >> well, we think expensive

forms will get more expensive. not on a long-term basis because we think on a long-term basis the 10-year german fund will go from minus 30 to -- butted if you look at part of that, we think some of the european high yield bonds move dramatically. and we ecan go lower still and that's because we have the it bank buying sovereign funds and fire in investment and turn to high yields. so that's one area of an opportunity. within equity we think what you'll see is a more -- and we think that's the way investors should proceed we like sectors like oil and gas.

banks and car sector we also think you should look at high dividend yielders the average is close to 4% that's even higher when you pay it at 5% and deequitiesation. so a mixed approach is what we would recommend. >> thank you so much for taking time chat with us. now 4.1 billion pound listing off the uk life insurance business they said the company decided to post pone the ipo just to reach demands. but insisted they intend to cut their ownership.

reckitt has announced it will give $1.4 billion the british consumer company has denied accusations from the department of justice about marketing practices around an opioid addiction treatment they say it's in the best interest of the shareholders they've hate three-month high after they raised the full year profit, after the glagship opioid drug lost market share at a slower rate and the company did not mention it in the earnings release today coming up on the show u.s. authoritiesinvestigate deutsch bank dealings with malaysia's fund morer when we come back. fun fact:

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welcome back to the program. after the royal institute

surveyors shows interest for the it first time since the brexit referendum and sales in june rose prices in london continue to fall but they am creased across the rest off the uk. meanwhile deutsche bank says it has fully cooperated with law enforcement agencies that have made inquiries about the mulaegz investment fund. the lenders statement fall oed multiple reports that u.s. authorities are investigating deutsche's work. it centers around a corner employee it sames to see if they violated corruption or money laundering laws goldman currently faces charges for its role in the it $4.5 billion corruption scandal

that brought down -- and they have said they will not back von der leyen the they will vote and great to have you with us. and let's talk about next week talking about the break down socialists, liberals as they need 376 votes for it to get through. in theory it should be a shoe in why are there so many questions about whether or not it's going to happen? >> there's a section off the center right that is annoys they urwith killed in this process,

didn't ultimately make the presidency and a section that's very frustrated and then vow the socialists they've now been given to lesser posts. high rptsives. and they're signaling their opposition she cannot count on the three groups and that's why it's quite important to her ability to win. >> you have the center right and the socialists working together. what does this mean for the government do you have a lot of people who are going to be disappointed and you have people in potentially theperc du and don't like her as an alternative >> i think ult mtdly the recognition is another massive blow to the personal authority

she's had to abstain possibly germany will lose the kan candidate for the commissions. and as you said the social democrats need to be careful as they precipitate a crisis and if there were an early election, the social democrats would be obliterate in that contest i think she does get through next week. i want to ask you about the french president because many people have potentially -- as to the head of the european commissions as a victory for mr. macron

how he says germany has a lot of its own problems domestically now. >> i agree it's a big win by macro. gone very wrong. and we could end up with a set completely inspiring and not a real mandate he's got a fresh team and i think hay want to do things and address migragsz, move on to the climate. so macron has emerged as a big winner extremely dovish in term it oz of cont new eta. she's on a monetary parliament but as long as she has good advisors aher, she has important political relationships in the capitol. this i think is rel itatively bullish for europe >> if you forgive me i want to talk about brexit.

boris johnson has said he won't agree to a deal that includes the irish pop. and said it represents britain as a battle state for prime minister >> he deliver majority and they're facing election and the election will force him because otherwise he can't deliver a majority for the it outcome is highly uncertain. and that can work for europe or he's facing an election so the question is what's the -- you have a limited window within which he can strike a deal

this notion of the time limit is unbelievable i don't think it's time limited. the northern ireland daily solution so there is some discussion now about the implementation period and quote quote not my words at the ends of the long transition. frfrtsz >> back to a whole host of problems however, this is close to labor party policy but it's a more comprehensive customs unit it's unioness. the it back stop is not. and it delivers the large section of the kprurb earlier. and there was a new former section.

inate ha-- >> something you did a very good job of and managing director for europe that the eura-asia group. (client's voice) remember that degree you got in taxation? (danny) of course you don't because you didn't!

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welcome back to "street signess. >> and these are your headlines. >> european equities break a three-day losing streak after chair chief sets a stage for an insurance cut this month >> based on incometic data and other developments, it appears unsur uncertainties around trade tension continue to weigh on the outlook. a six-week high ahead off what could be the first major storm of america's hurricane season

>> $1.4 billion to end all u.s. investigationinize to the formerror pharma business which separately raise its profit guidance, sending share three-month tie. >> after the reassure cancelled the listing for the uk light business on weak demand from individual investors well, you can see right behind me old european industries is trading well this morning. and after zack -- and really cementing the case for a cut coming at the end of this months kw suggesting the cases that furtherer accommodation would be necessary.

the market has gone from 25 basis points cut and a 25% at the it ends of july. so that's are been verierger for equity markets and european industries are a little buoyant on that as well. es forrer >> up about 1/4 of a percentage point. and a survey report are the month of june. some pause itative it sentiment there. oil recovery that's one of the reason the 5100 is doing so well. relative languid performance against other industries make sure because it you're going to see their numbers coming out as well

>> up about 1/4 off a point and girl up about half a percentage points as well the dollar has been trading on the back foot. you can see europe, once called saevltd 70 is where earer are at we continue see it strength and get more and more dovish er the dlr to begin this morning and then weir are back through 125 level. we've been hovering around the it 125 for the last couple of days now year about 310th its of a -- and investor sentiments has taken a shift to the down side and let's talk about u.s. futures though because us are argoing to be

owning up >> remember yesterday briefly thought she made a letter. it looks as though these will continue that trend and pub luicist momentum on renewed expectations of fed cuts and perhaps more aggressive fed cuts in coming time wti is the highest in over a month after gulf of mexico braced for the largest hurricane. they smashed almost 1/3 of oil data showed u.s. crude investries by 9 ask$9 ask a hal million sending july pgt he says it will be replaced quote subsangsally he claimed iran has secretly

enrich youranium they have not discovered any such activity. after they took to irather than, and called the sanctions kwoetd economic terrorism and added that iran's activities are open and transparent. >> you know the issue is not to repeat the numbers this is a right of every member and this is iran's life. what we're can doing is in a transparent manner is under surveillance, the inspectors of everything single activity is on the monitoring we have nothing to hide. >> and three iranian boats ait e. itted to block a british commercial ship in the streets

a royal mavy ship intervened teheran rejects. last week persons were on marines near jubraulter on suspicion of violating sangszs by bringing money to me. >> he did not follow instructions that's what governors are supposed to do ard wan says he did not conform to policy. quote you soon see how our interittest rate policies are form because they're the mother of inflation >> inflation is eval >> air go. >> exactly

>> activism out performed and it's headed by billionaire paul singer it's the latest example of the increased interest in german corporates and someone who knew about increased interest is rich thomas thanks so much for coming in why are activists putting more skin in the game at the moment >> they're looking for ways they can deploy capitol into value opportunity. i think that's the spread actively one from a dominant trend we've seen now it's extenting globally for the last two or three years. and now we're seeing an increased rate of campaigns as well >> it's changing

and elliott, as one example. sd leading the way, more aggressive style, more strategic in their orientation can be effective, not just in the u.s. but in europe as well. globally this first half of the year, 46% of campaigns were about strategy, this isn't the old world of of activism where it was levered up your balance sheet and return cash. this is going after the fundamentals of who they are >> encouraging staff boss if you look at the lvl of deal making in europe, if anything he tries out for various reasons. is there a correlation between actual deal making and the incentive to ingrj that.

>> and that's right word isn't it courageal frequently, especially on a large cap, it's about sfreem that lining up. i'm more on the smaller and midcalf. obply it's about putting a company up sail. er >> hisz oreck. if you're sitting in the seats, you consider these people raiders, hostile, barbarians at the gate was the one to some extent do you see this move where you're havic state fraught yums there managers out there saying this to is a good thing. we need rething the way we run ourt our business. but even more importantly, it's

not just theb activists the one withes we all know and it's vardane amic that we're underpinning the activism. >> maybe in some ways replicating what we call is vocalism we see from our own shareholdards. it's their support that enables the activist they're under 234 trees said pressure to beat the industry. after that, i saw them putting a different catilous in placeory peress into good -- and when we talk about activists, there's been a diversification in europe tin first half of the year, they were condicted by 15

what wout performance? companies who have been -- or where activists have acquired. it's several people on the board. how have those companies gone on to do subsequently >> i think what most shareholder seeing is at least in the near term what vkts do encourages pulling forward long-term value ziegs and that's preferable than nor of of the status foe what that means that's yet to be seen. is this all driven ultimately by the argument do you think people looking to make money are thinking we can no longer jief the fees we pay

some of these managers unless they go above and beyond and to go above and baurntd you to have get involved >> and a little over $1.5 trill drfr has come out and get yourself cereal. they need something to step that tide so you know you have to go one of two directions. either vow to create more alpha, justify your fees or you let him go outside drive alpha creation or you're go having to to go the other way and that means lower fees, less funds on my factive madgeagement >> we'll leave the there i would viced you

now the uk ambas dhoor u can k has rekwien. both crazy and inept it comes after conservative leadership candidate refused to confirm when he was ambaxderrer to leave the job johnson praised the diplomat and criticized the person who leakhead mem eo. >> i think he's a superb -- he is a superb diplomat ien the whoever leemed his details has done a great disservice to our civil servance, to people who frl -- gak and it is not right.

advice to ministers. should be leaked and it'ser matter right that civil serve ntsz' careers and prospects should be dragged am to political agenda. >> coming up on the show, someone else in president trump's fight. the the details next you might take something for your heart... or joints. but do you take something for 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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>> exciting. it's women semifinal day at wimbledon. serena lost her ix ammed can doubles mamp with andy murray and number eight, alena will play number seven seat so good save coming up wimbledon. >> when is it not a good day at wimbledon? it's no wire near the end but he's done steak five the 160 kilometer stage six starts the day in moor house will riders will take on the hardest part of the tour it's grueling 4,000 meters vertical offense of of the moupten. using a car is our colleague, adam rooetd and just filed this report

>> it's stij 6 and we're in the it department. and to their toughest test see far. 160 kilometer its with an it increasably steep finish and for a thurtd day and peter had his first stage victory after a thrilling sprint finish yesterday. now the tour defrance, 21 stages, working its way all over this country and it's aer a huge operation can day after day. i whuved on to location and a whole new sesz of sfabs. get to enjoy the it. every vantage point to catch a sight off the pelicans and leaders.

that the end of it all >> now his is a huge event and it's got can companies hoping to be part of it. publicity caravan will cost just over $550,000 for stay but sdwrou to be that awesome. so a huge sense off occasion, amount of oopportunity to get their lands out there. who look into it aspect of a rider's outfit as they try to grab the separate second erse ahead of stage six of the 20 nane tour de france >> more about his prospec-- to .

some of the world's biggest gather said. this after a, it t and, t announces it's belging tv and ice. >> disney,er apple and nbc are exkekted to launch disny when you're connecting qc >> arriving in sun val ey. one is how the media and tech giant are battling for content from diz apple, and net net universal. er >> nobody's going to compete no subscribers. there's nothing i can see that would dits large them. among them is video in televisions.

>> disney has the best chance because of his pop krler talk about. completing for shows fr movies like discoveries building on his county while leading a wlesz on. >> they are kind of like the game it great company frrg i think all it's great for kern surers bp jtsz and sherry phone along with first century foxy and come will come out on top. >> netflix has dpaut the most extrollinary head node sdaes disney's put together a phenomenal group off fans.

and warners got some record over the years. and hul crow out thejulio. and every with within is watching to see how pill will respond julia, there, bc a proposed sanctionau and he targed early to say. as we've seen elsewhere in tariffs or other trade restriction. he's talking to the french senate and said the tax proposal was justice, givingal. here's something he's clicked through.

ats that's not so high see what'ser the back gor aand we had dus thig matterer >> so we're not seeing globally is efforts to say how can we with taken more control over big companies and the other is a way to rebuild you your track it and 24 krd of a digital pack was being piegsed by lumare. it's a 3%er taxes on the revenues if they have global rev mews of 750 million euros a year and the thresh hold is pretty high by nachful and you coo etear forer there has been an overall and even through a digital tax but weave are seen this drama

play out that has not reached a consensus on that front and that it was going to forge ahead its own, for her hey traction. >> we're seeing strong statements amazon essentially praising the trumped a nin stragz saying the tax is not the right way to go we aunt a multiple lalt rlg verses can decision. and some can tuesday to stay >> krrm cure krsz from a revenue perspective how much they're looking to race, given a big part is prague it hopes to raise 500 mill yrnl a year and it's a sliver of these company's revenues the idea that if other court

like this. if each country vings files on and one push across the board. >> what we're seeing this morning is the political defend is about to begin. thank you for breaking it down for us >> let's take a quick look at how futures are shaping up and can you can see they're setting up s&p 500 up six points. all right. that's it. (danny) let me get this straight.

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it's 5:00 a.m. at your cnbc global head quarters fed juicing the markets. we're digging in ahead and oil on edge as the big easy braces for its first major storm of the season brewing in the gulf and tech under fire in france president trump ordering an investigation into the planned tax on big tech. with we're going to take you live to europe and talk about that >> mideast tension