street signs >> it's tuesday morning near london and hire are some headlines. >> european stocks fall into the road with the footsy leading the loses after the italian sum submit forced to return early from the summer break to schedule a no-confidence vote in the government. and shares slide as the consumer goods slide and blames weakness in its beauty along with falling industrial demand.

>> the group reiterates it four-year guide answer despite higher cost from the continued grounding of the boeing 373 max. >> and hong kong has another day of protests at the airport carrie lamm warns the city is on a path of no return. good morning it's been a risk heavy 24 hours for equity markets you can see behind me in europe there's a lot of red on the screen but let me take you back to the price action in wall street yesterday the majors closed near the lose of the day. dow, s.a.p., nasdaq closing below. respectively down 1.5%, 1.2% you can see the redness in negativity is picking up and that continued into the asian

session overnight. there are a couple things that the market is dealing with here. number one, growth concerns. at no end in site to the trade narrative between china and the u.s. but yesterday we had an additional element to think about. that was the temporary shutdown of hong kong airport that sent shockwaves throughout the region and into the european session as well and then also big day for yesterday after the results of the primary election showed that the incumbent president did much worse than the market had expected that sparked a huge selloff, more than 10% or so for them for the end of the session so that again led to shockwaves throughout the financial system and we are seeing risk trade very, very heavy you can see behind me in europe a lot of red on the screen the stock here of six hundred is down about 4%. let's switch and talk about the

boises here. ftse 100 is trading down at .3 tenth of a point but also bear in mind we have data coming up in half an hour's time, unemployment data as well as the average earnings. watch out for that on the macro front. xetra dax is trading lower today. bankds coming under pressure deutsch bank down about 2.5% after a heavy session yesterday. this as we continue to see a rally in fixed income space continue with its omentum. tehran down about .4%. and italy, the focus, they will come back and decide when to hold a no confidenced could happen this week, could happen as soon as next week, but bottom line there's still a lot of

question about what's going to happen with the italian government and whether or not we're looking at elections in the next couple of months. the mood is quite heavy in europe for these first hours, first few minutes of the trading session. well, tui is trading at the top after the backed its guidance des spied the grounding of a crucial aircraft the company said it's, quote, robust business helped to yof set costs from the boeing's 737 max's suspension it estimates those costs could hit 300 million euros this year. the german travel firm recorded an 85% fall in its back around uncertainty of brexit and delayed customer bookings for the summer season. henkel put this down to a poor performance in its beauty business henkel ticked up a significant

brand drapd. the company said it no longer expected industrial demand to rise in the second half of this year and our colleague joins us live from frankfurt with more details on this story. what could be the reason the company shares are reacting so negatively this morning? >> reporter: i think a lot of people had expected that the industrial unit, the adhesive unit is actually performing very poorly because they are very much lever raged towards the automotive sector. we have seen with many other corporate rates that the weakness in the car space in germany is sort of triggering also weakness whereas corporate sectors because there's so much dependency or interdepend densesies in terms of the car sectors and suppliers. but what was not that much expected, they also have a clear weakness their beauty sector and that's more or less a

homemade problem because early on as soon as january they were saying that they're investing now or start to invest money to upgrade their brands, to digitalize the business but apparently that hasn't materialized in growing revenues so far and that's a huge disappointment having said that, the company is still valued at quite a high pe ratio if the was to the end of trading day yesterday valued at 7.4 pe, so that's clearly higher than the average stocks valuation currently. so that might also be a reason why the shares are sold so massively today. clearly bottom line, if you look at those numbers, it's that it's a perfect storm for henkel at the one side we have poor market performance also the outlook is not good because they don't expect industrial demand to resume in

the secretary half of this year. a lot of people had a lot of hopes for the second half of this year, but i guess the longer we look into those earnings this quarter and the longer the trade spat between the u.s. and china prevails, the less likelihood is that we'll see any economic uptick in the second half of this year and also any uptick in industrial production in the second half of this year. which is obviously crucial for a company like henkel and to perhaps broaden the perspective, crucial for a country like germany. so we have that and at the same time we have those homemade problems for henkel. for example, proctor and gamble and una lever performed better than the company here in germany. back to you. >> excellent thank you for breaking that down today. and of course it is one of the worst performing stocks on the stock 600, down 5% now, fed expectations have

shifted markedly in the last week as markets remained volatile analysts surveyed by thompson reuter has forecast a 100% chance of a 25 basis cut in september compared to a 74% chance just one week ago and the same survey indicates that the probability of action in both october and december has also risen as well morgan stanley has forecasted the fed could even cut rates back to crisis level lows, that the investment bank predicted cuts in september and october plus four more moves lower next year. that would take the feds fund rates close to about zero. and a quick look at the performance in u.s. treasuries yesterday, the bid for fixed income is relentless just to put it in contest. two had year is trading at 1.58. friday they were trading at 1.64 ten year at 1.63 friday they were trade agent

1.74 about 11 basis points low. and long bond 2.11, 14 basis points lower than friday we have a specialist with us who joins us now great to have you with us. in your words, what do you think is going non fixed income? why is this therethis relentless appetite to own u.s. treasuries? >> it's a cocktail of a number of factors, mostly stemming from the trade escalation and conflict not so long ago the talk was of a truce or even a trade agreement. but today we have a situation where that conflict is potentially escalating two years ago the average tariff on chinese goods was 3%. the september tariffs come in, the average tariff applying to 97% will be over 25% these have global spillovers,

it's not just the u.s. and china impacted and the expectation is that over time this will progressively impact economic activity as it is doing. >> do you see any end to the rally in sight so longs that trade war continues? >> there is a possibility that the market is overestimating the extent to which the federal reserve will cut rates and the fed is caught in a real dilemma because it doesn't have a huge amount of the policy room to cut rates it wants to use that sparingly yet, if the situation continues to deteriorate, it has to pull out all its bazookas and move quickly. from a narrow domestic perspective, the u.s. economy still holding up, just, but the rest of the world is not so it is difficult, but chances are the bond market will pull the fed into at least a couple more easing rounds whether it goes all the way to zero is very much a mute point i think that meets much or much

greater deterioration all around which we don't see that the time yet. >> how much do you ascribe this rally not just a concern about the continuing trade conflict between the u.s. and china, but also anticipator e tori fears between brussels and washington. >> i would say that's part of the furniture. there's a strong expectation the conflict will be broadened out to europe. and, again, conventional wisdom was you don't cut your nose off to spite your face because we know that ordinary americans will be impacted built tariffs, it's not that they won't be but in this instance, if you look at domestic politics in the u.s., there's huge support for the protectionist moves that have been taken. so even if there is some hurt coming through, it's actually quite popular. all goes to suggest that further escalation is more likely than

not. >> if that's the case and today you ascribe to the view that potentially a magic swawand is waves, tariffs removed and things go back to where they were, is there a point where three months, six months, 12 months from now that the damage we've seen from this trade conflict is irreparable. >> i think some of the damage is going to be hard to undo we know that the supply chains have been disrupted. if you look at the corporate news flow and in terms of corporate actions you can see that there's been considerable disruption already it's not terminal, but some damage has been done clearly trade escalations stopped completely, then we can -- we can try to claw back some ground. but unfortunately the reckoning is that quite a lot of the damage will be difficult to reverse. >> tapan, do you worry the central banks are losing control here >> i worry terribly about it, i do. >> but it goes back to a couple

weeks ago and the messaging from then is that it is a mid cycle adjustment the market has ignored what he said and said we don't want to listen to your communication here, we're going to push for the 75 basis points cuts by the end of the 2019. >> i think central banks -- i think maybe being cornered is too strong an stressing. but there's some logic to the argument that they are cornered by recent developments and the key aspect here is that the monetary policy room is very limit. so reaction by -- you can look at the stock market and you will see that there's a widespread expectation that fiscal policy and fiscal easing with some combination is what is already appearing on the scene in terms of measures to copy with the downturn as it develops over next couple of years. >> that's the hope that's the hope that there will

be some form of fiscal easing. >> absolutely. >> we'll pick up the second section in the next segment. come willing up, as italy hits the rocks, they must cut short the summer breaks to discuss the timing of a no confidence motion. we'll have details aft ts eak.erhi your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.

. welcome back to "street signs" italy's senate will convene later this toning decide the timetable to hold a vote of no confidence in the coalition government parliamentary party leaders yesterday failed to reach a consensus on when to debate the motion this prompted a recall from the entire summer break. they insisted the vote should happen last week, after he declared the partnership with the five-star movement to be over the mib is down 8% and yields slightly lower this morning as well, but we've been talking about the global context and i think that's significant when

you look at the numbers on the screen. >> behaving in opposite directions the hang sang has closed at its lowest level since january cafe pacific has told passengers to delay all nonessential travel out of the city both today and tomorrow we have this report from hong kong. >> hong kong international airport is back to business after yesterday's flight cancellations. flights that did resume tuesday morning, but hong kong flag carrier cafe pacific canceled some 200 flights in the aftermath. antigovernment protesters in hong kong have occupied the airport from friday while crippling airport operations as a result hong kong stocks have taken a hit too with the hang sang index erasing it's gains as the political unrest continue. back of communications research has downgraded cathay pacific

saying more will follow and eating into fares and inbound traffic. it warned of chinese restrictions on hong kong-based airlines the chief executive care ray lamm spoke to the press once again without offering any concessions. she reiterated her support for hong kong police and said that they would be responsible for rebuilding hong kong's economy ruling out the possibility of her resignation for now. >> i have said after the violence has been stopped and the chaotic situation that now we are seeing could subside, i wouldn't say it would be eradicated totally i, as the chief executive will be responsible to rebuild hong kong's economy, to engage as widely as possible, to listen as attentively as possible, so my

people's grievances and try to help hong kong to move on. >> she also added thatticing up t picking up the pieces and recovering from the process can take a long time let's. i out the discussion a little bit more. i want to bring in the chairman of the china team of ts lombard to joins us around the desk. jonathan, i want to take it back to you yesterday we all saw the airport was temporarily shut down. we've also saw images of police tanks amassing around the border between china and hong kong. things really seem to be heating up over there. how do you see things playing out from here? >> well, you essential have the escalation on both sides and there are more demonstrators returning to the airport this morning we're told so one doesn't see any deescalation setting in here and one the problems is nobody has anybody really to talk to.

the demonstrators are leaderless, officially, at any rate and so there's no one there with whom the government could negotiate if it so wished. but, as you saw from carrie lamm there, she's taking a pretty strong, harsh position. >> we've seen a strong selloff, down 2%, financial assets are getting hit. but one particular area that's of interest to markets is the u.s. has a prerferential tradin status for hong kong is there any chance that would be removed and how much of a downside risk would that pose to the economy? >> that would be a considerable downside risk but so far donald trump has taken a very much handsoff attitude. he's called the demonstrations riots. he said it's a matter between beijing and hong kong and at one point he said xi jinping had

handled the whole thing responsibly. you don't see donald trump getting involved there's some congress people who are more exercised over this. >> there's is one reason for that the fact that we haven't seen the chinese military in any way involved or even close to getting involved in this process? if you're the pentagon you look at the chinese military expansion, the increase spending year on year, and you reasonably or not say, this is a strategic threat to u.s. interests is hong konging so something yok down the vood a politicroad is political nuisance or something they should involve the military in >> it's a rotation, as it were danger is that this first of all spreads across the border into mainland china, this kind of protest. and secondly, that it shows the leadership in beijing as being unable to cope and there four, in quotes, weak. >> we were talking about the

trade war, does that disincentivize beijing from taking this to another level simply because they are pretty much suffering from a slowing economy back home as well as the risk of a further escalation of the trade war with the u.s. in they don't really have the capacity or the willingness right now to engage in a side conflict with hong kong. >> well, i think you've got to look also at the mindset in beijing at the moment of the leadership, which i think over the last month or two has become considerably tougher on lots of fronts on the south china sea, on the defense white paper which branded the u.s. as basically responsible for all the ills of the world. and so on which came out last month. so on and you've got a tougher position there with talk of weaker goes for a long march of an economic slowdown to rebuild our economy more independently of the west and the united states in particular. >> tapan mentioned this and

jonathan also mentioned it do you think from your perspective that the pboc is way out ahead of other central banks around the world >> well, they certainly started their easing earlier because their economy has been slowing for some time. question is whether it's done enough and i think without the latest round of tariffs, arguably things were starting to feel as though they might stabilize. but i suspect that the new round of tariffs will have to mean more easing down the road. they still have lots of policy levers they can pull, it's not exhausted by any means and i would expect more of that to try and stabilize the economy over the next six months. >> do you feel they have a lot more policy leaders than the ecb? >> well, the ecb and arguably the fed too. china still has much more armory to fight the slowdown. problems are deep seeded but it does have a bigger armory.

>> and talking about some of the tools that they could use, we spent time talking about the currency it's broken through that psychological seven -- perhaps it was more of a psychological level than anything else, jonathan but how do you think the chinese authorities are thinking about the currency trajectory and can they argue that the adjust memet was because the economy was slowing rather than the tariffs from the united states >> if we get new tariffs from the trump administration, then we will see more action on the currency front there are other domestic measures that can be taken of the course triple r cuts moving towards a renewed military sim mu lous, where it's been fiscal recently, pushing up infrastructure is on the one thing they seem anxious not to do is to reflate the property market. >> very quick question do you think we'll get any resolution by the end of this

year >> not for fundamental resolution at best it will be papering over a few cracks and that will last for as long as it zblafts thank you very much for joining you us the chairman of the china team at ts lombard's and tapa the head of global communication thank you for joining us. assets plum mate after blows are dealt. we'll have details for you after this break here's another cleaning tip from mr. clean. cleaning tough bathroom and kitchen messes with sprays and wipes can be a struggle. there's an easier way. try mr. clean magic eraser. just wet, squeeze and erase tough messes like bathtub soap scum and caked-on grease from oven doors. now mr. clean magic eraser comes in disposable sheets. they're perfect for icky messes on stovetops in microwaves and all over the house. for an amazing clean, try mr. clean magic eraser, and now, new mr. clean magic eraser sheets.

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welcome back to street signs. >> these are your headlines. >> european stocks fall into the red with the ftse leading the losses after the italian senate is forced to return early from its summer break to schedule a no-confidence vote in the government >> henkel shares slide as the consumer goods company slashes its full-year outlook and blames weakness its beauty along with falling industrial demand artht and tui takes off. it reiterates it's guidance on the back of robust third quarter

business despite higher cost from the continued grounding of the boeing 737 max. and the hang seng closes at its lowest level since early january as the protests at the airport stretch into a fifth day. carrie lam warns the city's on a badge of path of no return >> we've just got some data out of the uk when it comes to the unemployment rate. the months of june, the three months of june the unemployment support 31%. it'sat 3.9%. the rate, the average earnings "x" bonuses up 3.9% for the three months. >> wow. >> the earnings was forecast at 3.8% there, so a bit of a beat in terms of the count. it is up 28,000 month on month to 1.163 million so, you know, we were expecting

not such great numbers here. but, you know, staying at around 3.8 it's actually gone to 3.9, interesting just to see that slight -- slight change there in the weekly earnings, "x" bonuses as well. and the total weekly earnings, up and that's the highest since june 2016. >> this continues to speak of a very, very strong employment backdrop in the uk even the employment rose by 115,000 in the three months to june the poll was 65,000. so people continue to get employed and real wages continue to move up because obviously this average weekly earnings are coming at 3.9% year on year. but then you take cpi of close to about 2% and you're looking at very strong real wages. that's one of the reasons at services and consumption has held up pretty much okay it has remained relatively resilient in the first few

months the year. strong employment numbers coming out of the uk this morning so that is the picture in the uk but i want to take you to broader european markets you can see there's a lot of red on the screen this morning we were talking about henkel, down about 5%. tech down about 3 percentage points italy, a lot of focus on assets the last couple days as they've been talking about the senate are set to meet this afternoon to think about the timing of oldi holding a no confident vote. a lot going on in the background in addition to the macro developments globally. we mentioned it earlier at the beginning of the show with argentina as well as the developments between china and at u.s lots of fear still gripping markets. switching to foreign exchange, here you can see that the picture is one of dollar strength today versus the euro euro trading on the back foot

.2% weaker cable also holding instead did i at around 120.70 we broke 121 after they came out on friday weaker than expected for the uk we're seeing a bit of a safe haven bid into the yen this morning but nothing major. 105.20 sfwrooif we're at and that was on the back foot versus the u.s. dollar looking to future's head, yesterday we had a weak session with the three maj jorss breaking through the hundred day average to the down side today the picture looks grim as well we have three indexes opening up negative worth bearing in mind that later on we get cpi dating coming out as well. remember, it came in at 2.1% last month so it will be interesting to see where it comes out today. the mobile index had the worst day ever after they lost a primary election to the

opposition candidate who is running with the former president as his running mate. investors raised concerns that a fernandez-led government would lead to interventionist policies that would be a contrast to the more market friendly strategy. and intervention by the central bank pa bank peso gained some ground what's interesting to me, we have a few months between now and that re-election in october. and it seems just based on the comments from macri that he's going to put the economy at the front and center and the health of the market reaction to argentinean political actions. >> i think it will be very tricky reading through analysts notes and speaking to various people on the ground, people -- the extent of his defeat yesterday was much larger than anyone had anticipated he was slightly behind in the polls a couple of points, but he lost by i think, you know, a margin of about 15 points or so.

way bigger than anyone had anticipated. what we saw yesterday was that huge rerating and repricing across all argentinian prices. it was the worst day in argentina since the days of 2001, the last time they defaulted. the big question here is what the next government's policy, potentially if it is indeed the i impeer list party would be when we come in and how they with behave towards these imf loans the key to argentina is though have received the largest ever imf bailout package. we don't know who the next md of the imf will be. that's something to deal with. yesterday we saw bonds across the curve jump about 20 to 30 points even that one hundred-year bond that was launched in june of 2017 dropped about 20 points currency about 10% weaker. and the stock market was down

about 40%. shaved off half of its market value in one day you can imagine there was a lot of red for any investors in argentina but that will affect other emerging markets as well and so we'll have to see how things pan out going into october. but the mood coming from argentina is one of a lot of caution and certain as we get into those elections other than imaging markets, we've been looking at retail stocks with frerngs alibaba and jddom plus macy's and walmart in the u.s. it has been on a roller coaster ride since the latest round of tariffs was announced on august the 1st. elizabeth joins us in the studio and can give us more on what's going on will. >> we've seen a lot of volatility in the retail sector as investors try to digest what this latest round of tariffs would mean for companies this is the ebay's etf

this tracks names like ebay, way fair you can see when that announcement came out on august 1st it dropped but it's come back a bit as traders try to say we don't know exactly how serious this threat is the national retail federation saying it expects these tariffs could cost americans billions of dollars in apparel, household goods and toys and one sector that's getting hit is luxury online ecommerce this retailer went public in june, it's lost about 25% in the past few days. part of this is ahead of the erk earnings report. analyst wondering about some of the fundamentals of the company. but you can see similar peers in the online sector in luxury stocks were involved and we're seeing big losses in the last couple days the biggest battle is playing out between amazon and walmart

we know that amazon has been, of course are the leader in this sector in the past few years it's helped boost its share price well above walmart, but walmart is catching up currently morgan stanley estimates americans spend 50% of their online dollars on amazon but now 20% is going towards amazon and it's made key progress in categories like groceries. walmart said it would have to raise prices on consumers as a result of the trade war between the u.s. and china we will be listening closely to hear how exactly that will impact its outlook going forward and what goods are affected when they report their earnings on thursday, guys well, one former british boxing heavyweight champion will face-off with the other current champion andy ruiz in saudi arabia for an eagerly

heavyweight title rematch. the controversy to host of the fight has drawn some criticism but joshua's promoter defended the decision and told them both fighters are in line for the biggest pay day of their careers. we spoke with them in london about the rematch scheduled for december. >> we got there for a number of rnls one, every promotor in the world has been trying to land a mega fight, not just in saudi, in the middle east. the neutral venue was important. i think aj sort of felt like i don't want to be seen to just be bringing you to my backyard to beat you no excuses, neutral ground december the 7th in saudi arabia, the most amazing venue being purposely built for this event. this is going to be an iconic moment for the sport and a major change for the sport which is notoriously seen mega fights in britain, in the usa, now that changes with the middle

east picking up a mega fight that i feel will change boxing forever. >> you've made huge cards in cardiff and wembley stadium. does this one top financially for everyone >> yeah, it does there's not -- there's a lot of similarities in the numbers, but this was a decision that we didn't take lightly. we knew it would come with criticism. a lot of the criticism i've seen has been frustrating because a lot of them is just not true in terms of the event women, men, everybody welcome. visas automatically issue with the ticket we need to make sure fans are aware of that. logistically we're following with the footsteps of the wwe, the european tour, the world boxing super series, formula one, organizations that unfortunately for us are much bigger than us, but we've spoken to them about their experiences. they've all signed multi-year deals. we'd be naive if we didn't look at that territory of 17 million people -- sorry, 14 million people, 17% under the age of 24 pay the massive opportunity to

grow the sport and we've already seen the excitement from the way that they've dipped their toes in with other boxing. >> interesting so a boxing match in saudi arabia for, well, anyone -- >> it's inside. >> hopefully will be inside indeed something to watch out for in the near future. also coming up, our coverage of the global food industry continues. today's focus is food sure the so stay with us, we're going to get more into that right after this break ru trehe so stay with us, we're going to get more into that right after this break vuure the. so stay with us, we're going to get more into that right after this break so stay with us, we'r get more into that right after this break the. so stay with us, we're going to get more into that right after this break so stay with us, we'r get more into that right after this break the. so stay with us, we're going to get more into that right after this break so stay with us, we'r get more into that right after this break

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welcome back we've got a week of special programming liebd up f programming lined up for you here on cnbc focussed on what we eat. we'll give you food for thought as we look at issues such as farming, sustainability, and the future of food today we explored the issues that threaten the world's food security such as climate change, water scarcity and population groaning we beg growth in china they have seen pork

prices soar. authorities are now looking to stem the disease's impact by upscaling away from smaller pig farms to laerth pork production. our colleague eunice filed this report >> chinese agricultural companies like the one i'm at right now are preparing for a greater push towards large-scale farms similar to the united states swine fever has ravaged the industry wiping out a quarter of china's 4-million pigs and that sparked a call for change according to top feed producer new hope. >> translator: china can purchase globally but stuch a purchase will be far from enough it has raised pig prices to a relatively higher level now to the solve the problem, we have to rely on our own ability inside the chinese system. >> to beijing, that means professionally farming practices. currently the industry is largely made up of smaller backyard farms given china's tradition of having pigs at

home but the government is now requiring bigger control and waste management measures and it's offering financial incentives like subsidies and land to get them to scale up. >> translator: once they smaller ones drop out of the market we can scale dund more. we can do more to meet demand of china these consumers. >> they are putting money in genetic growth china lacks experienced workers and animal husbandry and china is home to many diseases that have been eradicated in other countries, so the risk of contamination remains high cnbc business news, beijing. so from pigs in china to ham in italy, we're going to palmer. and we have bernhard url thanks so much for joining put

you have independence advice across institutions, members european union and others. what are you telling them is the greatest threat to food safety in europe? >> well, thanks, first of all and good morning we would like to say that food -- i think we can say food has never been as safe as it is now thanks to many efforts by the member states, by food business, also by law enforcement and still there's nothing thing risk so we still have threats to food safety which are bacteria, viruses, micro toxins, which is toxins produced by funggy. but also antimicrobial resistance, which means the they're getting resistance to antibiotics which is big globally not just in europe.

>> we've seen 28 different countries sharing information and best practices and you've end upped with this relative consistency across the entire trading bloc how can those lessons of cooperation do you think get expanded globally? how account eu take some of these best practices and force them to be shared with other regions of the world >> well, i think there's no way to force it that they would take over our european approach but i think what we saw in europe over the last 15 years is that the separation, the strict separation of the scientific risk assessment which we do here from the political risk management is really a recipe for success. so we can do here the best possible science without political interference and then only later based on our advice risk managers make political decisions about the level of safety or the level of

risk we want to have in europe what we do and what we try to increase is to bring this on a global base by building partnerships with the u.s., with china, with japan, with australia, new zealand, to have a common understanding of how we do science for public health. >> you say that food has never been as safe as it is right now. i just want to take you back to what you said about some of the threats to the food industry and of course the mostpressing one one of the most pressing ones, is climate change. how do you think about that in terms of the risk to overall food sanitation and what -- what the food nutrition composition could look like in, say, ten, 15, 20 years time? >> well, we are all aware that climate change say big driver which impacts food safety, not only food security so it's not only about what we can grow and what we will eat in the future, but it's also about the safety of food

if we think, for example, that insects that were not common in europe are now because of climate change coming from africa to europe and they bring with them also diseases for our livestock. or if we think of the protection of micro toxins in food due to heavy rains and changing climate. so obviously climate change has a big impact on food safety. and, well, we will have to meet -- we will have to use all the options of technology, of science to, yes, again in a way to collaborate on a global basis to mitigate that risk. >> what you're saying is you're right in the cross-section between science on one hand and nutrition on the other and clearly people are using science to become more efficient in terms of extracting the most nutritional value per unit of

food available but then also there's the question of standards. so how do you square the two up, the drive for efficiency and reliance on science versus not allowing for slippage in overall standards while that process is taking place >> well, the setting of standards is a question of political negotiation within trade blocs, but also on a global level so that's something society has to decide what level of protection for human health and for environment society wants to have on the other hand, the scientific question on how can we produce more calories per square meter of land while at the same time maintaining or even restore by diversity with the prospect of having to produce food for ten billion people in 30 years, that, from my point of view, is one of the biggest challenges for science but also for food business and

trade. >> all right sir, thank you very much for your time today. the executive director from fsa talk through some of the challenges on food safety there. changing consumer tastes and disruptive technology are transforming the food retail space as well. according to black crow, consumers want know what they're eating and where their food comes from, and this presents a massive opportunity for those companies quickest to adopt. tom say portfolio manager. is it fair to say people are changing not only what they eat but how they get access to that food >> absolutely. we're seeing some really exciting changes not only in what people are eating, but how they're choosing to consume it, where they're choosing to consume it this is really having an impact in how companies and farmers are choosing to grow their food as well i think there's many trends here that are resulting in investment opportunities that we see as a true structural change rather than just a fad.

and this is going to drive higher earnings growth for many of these companies we think for many years to come. >> the earth has finite resources and if you go back a couple of decades from an investor perspective that meant talking about concepts like peak oil. is there a moment that you think investors need to focus on how units and nutrition per unit, how you can efficiently create food, produce food, and that will see potential pore opportunities there? >> absolutely. some of the most exciting opportunities we're seeing are in companies that are going to improve resource efficiency in a significant way in agriculture people talk about the concept precision agriculture. and what's really exciting here is that in many sectors when you hear the word technology you think the silicon valley startups but in agriculture, some of the companies that are winning out of these technology changes are some of the largest, most established companies that have seen this trend early and have

made significant investments and we'll see their franchise and brand value combined with this technology to lead to greater than average earnings growth for many years to come. >> you look at brazil today, let's say, and you've got an area the size of manhattan being cut down in rainforest every week largely to allow for cattle and that, of course, produces beef which itself creates more problems for the ozone layer and the atmosphere when you look at the way the world is changing, do you think that there's going to be a massive difficulty for some of these newer firms to scale up in the way that cattle farmers in brazil there are scaling up? >> absolutely. you've highlighted one really interesting challenge here and one trend that we're seeing is that consumers are increasingly aware of the impact that their food sources are having on the environment. and it's these consumer changes that are driving some of the changes and patterns we're seeing in consumption of food.

and so the shift away from animal-based protein to plant-based protein will create new challenges in the supply chain. but the resource intensity of some of these alternative protein sources is significantly lower. whether you're talking about units of land use or units of water consumed, it's something that a lot of people are yet to focus on. >> i want to ask you very quickly about market developments this year we had the ipo of beyond meats was launched at $25 when north of $200 now trading around 150 or so but still multiples of where it was issued and launched a few months ago are you expecting to see more and more of these types of companies, the plant-based meats, alternative products come to the market and do you see that as a big area of growth >> i think from a consumer point of view we're already seeing this establishes a trend rather than a fad and so it is not just startups and new companies that are taking advantage of this many of the ingredients companies, for example,

companies with very long track records, innovating very highly in this area and you've already got some of the established protein companies looking to diversify into this area think you'll see a variety of winners here i think that's exciting for consumer choice and investors to look across that multi-cap spectrum. >> thank you very much for joining us today on the show and. and a quick look at u.s. futures before we head out we've moved upwards. dow seen opening up in the green, this off all three majors closed in the red yesterday. you'll want to watch out for cpi data coming out later in the u.s. that's it for our show these folks don't have time to go to the post office

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it is 5:00 a.m. and here is your top five at five. futures are flat right now one day after the dow dropped 389 more points. the dow now nearly 6% off its record high. which way will we go today we're going to find out. red flag, though, the bond market close to sending a big recession signal or is it the key things that you need to know today global hot spot, antigovernment protesters are flooding the streets of hong kong and the airport yet again. and now china is sharpening its rhetoric we'll give you a live report from the ground coming up. uber