craig melvin: that's all for this edition of dateline. i'm craig melvin. thank you for watching. [music playing] good morning welcome to "street signs." i'm joumanna bercetche >> and i'm julianna tatelbaum. these are your headlines >> brent crude eases in the wake of an attack on the saudi oil supply president trump points his finger at iran >> we have the best equipment and missiles you just bought the patriot system i don't want war with anybody but we are prepared. >> oil and gas continue to power

higher outperforming broader european equities >> investors await the fed's latest interest rate decision as president trump ratchets up the pressure on powell following the recent oil shock >> uk supreme court prepares to hear claims that the parliament suspension is illegal. after a trip to luxemberg. >> good morning and welcome to "street signs. all the happenings around oil and saudi arabia crude prices have eased. brent posted its best day on record after an attack removed half of the kingdom's daily

output president trump said it looked like iran was behind the strike. u.s. intelligences indicate the attack originated from iran. officials say iranian weapons were used in the attack. they have denied involvement in the incident looking at oil stocks. we have seen oil majors and prices pulling back slightly >> bringing you comments we got just now out of the energy sector he said we are confident markets are well supplied. remember, one of the original nam tweets refer to the possibility of the u.s. being able to tap those reserves with you saying now that he is confident the market is

oversupplied, so perhaps they might need to go and the u.s. is taking a wait and see approach pretty flexible. might not happen we'll continue to monitor the situation on oil markets very closely in the days ahead. those are comments we are just getting now. >> very important in terms of the supply moving forward given the situation in saudi let's bring in our first guest on this coppic thank you for joining us this morning. if we just take a look at the oil price, it has retreated slightly after yesterday's historic surge do you think markets are appreciating from this appreciatation >> that is a very good question. what we are seeing is the effect

of the relative markets. i guess, there for the transmission mechanism between the geopolitical event is a little less than it might have been these sort of events five or so years ago, would have had a different order of magnitude what we are seeing is also the effect of this being a series of events having come effectively from iran since the u.s. reimposed sanctions. i guess the market has taken each owe veevent and reacted to. the temptation on hard liners in particular to make events more spectacular and try and achieve a higher impact. >> it sounds like you think this is a game changer for the market in terms of disruption and geopolitics. what about the motivation behind

such an attack what about the motivation pointing at iran for an attack of this magnitude? >> as i said, i think iranians are seeking to put pressure on saudi arabia and the united states they signed a nuclear deal with obama some years ago the trump administration signaled that they would withdraw and they did. they reimposed sanctions it is clear those sanctions have had an impact on iran. that impact is used in terms of managing and this content. the impact is than the less significant. what we are seeing is iran pushing back and trying to put pressure back on the saudis and the u.s. when the president says he doesn't want a war and others

do, we are in a situation where iran has a tactical advantage. >> yes you say that but there is not enough prove on the ground that show the attack came from iranian soil does this tie the u.s.'s hands if they don't have actual evidence that cruz mis missilesr the drone came from iran directly >> other countries that are allies will be providing forensic support and pouring through the debris that will be conclusive evidence everything we have seen so far in terms of where these attacks occurred, the distance from the

border and their effectiveness because this was a highly successful attack point to a military behind this we wait for the evidence to be conclusive i think everything so far points towards iran the game changer would be if there were missiles launched from iranian territory, then we are in an entirely new ballpark. the ability of saudi arabia with u.s. support to defend itself. >> given the u.s. has such a high degree of independence, can't you make the argument that china should care more about what is going on here? we see more of a reaction from china moving forward >> i think everybody should be concerned about this what we are seeing are a series of attacks almost undetected

only two have had any significant market impact. in terms of ships and the shooting down of a drone in the straight of hormuz initially on the u.s the failure to respond to the shooting down of a drone should the iranian show liners that an attack in the shipping lanes where 20% of the shipping have passed would not meet a response and i think in some ways that emboldened them. in terms of other countries, you are absolutely right what china and other members of the p 5 would say. the iran nuclear deal was an international attempt to stop iran's nuclear ambitions

it did not address the ambitions. it didn't address the missile capability and behavior in the region others in the region mightsay to the u.s., we should have addressed the feelings there and not walked away from it. >> i want to ask you, where are the europeans in all of this they've been behind the scenes trying to keep the jcpoa deal alive. and yet iran getting bold with these attacks. they are really pushing europeans to take a decision of whetherthey want to stay in or stay out how are they likely to react >> i think we are seeing europe caught in the middle i'm afraid europe doesn't really do the policy, they see

everything through a trading lens europe saw the jcpoa as one of the greatest successes they were intending to attend recently and provide a funding line in order to try and bring the u.s. and iranians back together again offering waivers on oil sanctions the problem is, in this environment dealing against iran's hard liners and military, european military are not up to this what i'm afraid, we are going to see the u.s. and the uk support and combined maritime forces and

those countries willing to work with the u.s. to deal with a highly sophisticated threat where those forces are in close proximity, which is too demanding for many and most european militaries. >> all right, sir. thank you for taking the time to chat with us kne neil brown from cqs. let me take you back to the price action on wall street yesterday. we had u.s. equities gripped s&p and dow snapped an eight-day winning streak ending about half a percentage point weaker we also saw energy spike yesterday. wti and brent shut about 14% all of this shock is coming at a time we are talking about a

global manufacturing slow down an oil spike doesn't really bode well for the economic world of fortune, that's one of the reasons why we saw these indicators get hit you can see the stoxx 600. yesterday was an extremely strong day for oil that was one of the few sectors in europe trading in green today, leading this morning, up 1.1% that continues to do well. we saw yesterday, health care also having good session food and beverages right at the bottom. basically down in the midst of all the news, we have weak data coming out of

china. that is helping with banks and auto is pretty weak too. quite a bit of red at the bottom today. >> we've got a few corporate stories i want to highlight for you. zaland o's shares topped the investment firm said it divested the shares for $558 million euros meaning the stock was sold at a 6% discount to monday's close remaining the biggest share holder in the on line retailer sainsbury sales slipped with declines of 1.4% at tesco. all of the uk's big four super

markets lost to german chains. and reporting that ocad o's market shares rose the on line groesher reported a rise in retail sales ocado said growth was boosted from the fourth automated warehouse and added that the first home deliveries could start before september 2020. we'll take a quick break coming up on the show, chemical producers warn of lowering supplies following attacks on two saudi aramco facilities. more, when we come back. nning to overthrow me. they're tired of working weekends to maintain our aging infrastructure. at cdw we get the pain of outdated technology. that's why we'd assess your needs then design a secure infrastructure to make you more agile and efficient. hey guys. oh hey, boss.

no more weekends. no more weekends? let's do this! mutiny's off ted. what? for infrastructure solutions you need it orchestration by cdw.

some of the following has spoiling this is us for the few who haven't seen it. season 4 of this is us is almost here. to catch every past episode, just say "this is us" into your xfinity voice remote. like the one where i... [ buzzer ] or the one where we show... [ buzzer ] when he was a... [ buzzer ] plus you can watch this is us anywhere with xfinity stream app. especially the... [ buzzer ] episode. awww, that one's my favorite. catch every episode of this is us with xfinity.

>> welcome back to "street signs. saudi arabia's rabigh warns of supply shortages a string of warnings after the production was severely hit by the weekend strikes.

others have said they expect feed stock supplies to be curtailed by 16% they've had to cancel polymer orders david begleiter joins us now from new york. thank you for joining us we ran through some of the impacts for chemical producers out of saudi this means supply is going to take a hit on the back of this attack what does this mean in terms of supply, and then pricing and margins. >> saudi arabia is a very important chemical producer. they are about 10% of chemical supply and roughly 50% of the chemical feed stock production due to this weekend's attack. we are talking up to 5% of the

supply that could be curtailed in the short term. they'll have an impact on boosting prices. also, it will increase the cost of oil based chemical producers as they see the main feed stock move higher as well. it will tighten up markets and boost chemical prices. >> in terms of the net, net impact the price for european producers in particular, net net given that they'll take market share what do you think the impact will be for the u.s. and european chemical producers? >> in the short term, positive u.s. producers are in the best position due to the fact that they use lowcost natural gas feed stock versus oil producers in europe and asia

they have extra capacity in the wake of new bills as we speak. with the benefit to reduced supply that's how we are entering into the weak period and demand in march and april. the world should be okay tighter over the next four to six months any large impact will be modest along the region >> i just want to pick up on something there. you said the higher oil price will give these companies a higher advantage is your expectation that the full cost increase will be passed on to consumers rather than absorbed by companies >> correct if the demand is strong enough, it does take three to six months with the advantage and oil based

chemicals and u.s. and gas based regions. as oil prices rise places like do yw chemical do benefit on the back of rising oil prices >> david, we did mention the curtailment of their feed stock. what does this incident mean for western chemical producers that have looked to expand in the region if that will serve as a risk of doing business in this region >> definitely. it cost $20 billion to build it has not worked out as expected given lower oil production it is losing money

so they will not be helped by this activity. the overall dow chemical entity should be helped by the rise in oil prices and the balances posted this weekend. >> we are going to leave it there. thank you for giving us time to chat we've seen big moves in the chemical space, oil space. let's talk about effects as well and take a look at how some of those fair at the moment on the margin, we are seeing the trade firmer the dollar is trading on the back versus the euro sterling, we are also seeing come off here. the dollar is trading firmer a bit of a mixed bag for euro and sterling we did see a flight to quality

bid yesterday. some of that is unwound. some of that strength is coming off a little bit stronger versus the swiss bank as equities attempt to trade with a risk on tone >> i want to bring in david pierce great to have you with us. we've talked a lot about the impact on commodities right now. what do you think about the move are there any currencies you are looking at in particular >> this is a broad topic right now. it is not only the commodity currencies that are composed the canadian dollar and norway but it is really impacting worldwide. when you look at countries that really don't produce oil, like china, which is a major consumer it really impacts the currency

pair there becauses it is costg them more to buy oil it makes real movements you wouldn't normally expect it is not just the commodity producing countries. it is a worldwide impact with this we saw that yesterday with the overall strength of the dollar there is really more demand for the dollar because it costs more for oil. >> interesting what you say about china. what juliana was speaking about. because they are a net importer of oil and they've been devaluing the oil. surely now, they may have to put a stop to that to keep the currency under control >> maybe i really am not sure that is what they are going to do. if you look at the chinese

government it is really trump that they are battling against and his tariffs against their products the chinese government has a lot more power than a u.s. president or any president in the world because it is much more centrally organized and much less dependent upon the individual people and the political process is really very top down i think they have got a lot more ability and capability to drag this thing out a lot longer than most countries do. we've got an election coming up in the united states that really impacts candidates' ability to play hard ball. in other words, the chinese government can continue to devalue their currency a lot longer than the u.s. can really play >> in terms of china's moves

here and absorbing the cost of higher oil, you make the very fair point they have a centralized government and can control things much more than the u.s. can surely this has ripple effects that do impact the chinese economy. how do you see them actually absorbing these higher costs >> the chinese government still has a lot of money they still have a lot of u.s. bonds. they can sell a lot of those things i think the chinese government has a lot more problems than this their biggest problem is what is going on in hong kong right now. if you look at the demonstrates that continue day after day and the fight for more democracy there and the begging and pleading to help them out because they used to be part of the uk that is something i think that china really doesn't understand

how to deal with they can understand, you know what, we are going to devalue the currency the idea that people are protesting who they are and how they government or how they manage, that is something they struggle with more so than the trade issues that is the one thing we can really see as the biggest impact >> thank you for joining us director gps capital markets coming up, we'll cross live to westminster. as the leg at of the suspension begin. >> cracks appear as the prime minister looks to launch a breakaway party. more on both of those stories when we rerntu they use stamps.com all the services of the post office only cheaper get a 4-week trial plus postage and a digital scale go to stamps.com/tv and never go to the post office again.

get a 4-week trial plus postage and a digital scale take prilosec otc and take control of heartburn. so you don't have to stash antacids here... here... or, here. kick your antacid habit with prilosec otc. one pill a day, 24 hours, zero heartburn.

>> welcome back to "street signs. these are your headlines this morning. >> brent crude eases in the wake of an attack on the saudi oil

supply president trump points the finger at iran >> we have the best equipment in the world and the best systems i don't want war with anybody but we are preparing more than anybody. >> oil and gas stocks continue to power higher. outperforming broader european equities as the energy minister says they are prepared to tap oil reserves if needed >> president trump ratchets up pressure on jerome powell. >> and the supreme court appears to hear claims that boris johnson's suspension is illegal. after a trip where a press conference goes awry amid a chore us of boos iran's supreme leader has warned the u.s. that its policy

of maximum pressure will fail. he's also rejected any talks with washington. president trump said it looks like iran was behind the weekend attacks on the processing attacks. going live, what is the latest from saudi arabia? >> reporter: at the moment, we are awaiting a press conference that should take place at 8:00 local time where we'll hear more information about what is going on exactly right now at those two facilities i'm interesting to hear what we'll be hearing from saudi arabia many speculate we might not even see the saudi government coming out strongly in terms of implicating iran

that seems to be what we are seeing possibly one of the big ones is saudi arabia, the uae really watched and waited over the summer with those tanker attacks for the united states to walk the walk and talk the talk when they didn't see that, they really took a step back. interestingly enough, what we've heard so far they said they do know it was iranian weapons involved in those terror attacks they did stop short, unlike the president, in terms of blaming tehran directly for what happened they said this needs further investigation. we'll hear more about that tonight at this press conference when we hear from some aramco officials about what has been going on in terms of their attempts to clean up the mess following the terror attacks and get output and production back

on line. so many rumors have been circulating here in the kingdom and about how much damage was done and whether there was more damage than initially suspected. that seems to be the narrative all eyes will be on the press conference taking place at 8:00 p.m. local time. i'll be bringing you the latest. >> certainly the markets are not giving the disruption the benefit of the doubt oil prizes up to $9. we look close to that conference with the minister there. juliana will bring us the latest >> european equities are really trading mixed this morning with major divergence we are seeing some cyclical names underperform and more alongside those defensive names. this is along the reaction we

saw yesterday where global stocks slide on the back of those attacks in is saudi. italian and german stocks underperforming. french and uk stocks outperforming. the stoxx 600 really flat lining this morning looking at the fx, it is easy to forget we have a fed meeting kicking off today. keeping a close eye on the dollar we saw the index rally at 0.3% this morning, pretty much flat around the 98.6 level. the euro trading higher to the dollar sterling with brexit firmly in focus adding to what is going on the sterling is down 0.1%. still above the 1.4 mark looking at futures, we saw

global stocks retreat. wall street was no exception sector performance really varied there with energy seeing its best day since january we are looking at more losses but modest investors pausing for breath to digest what comes next and how the u.s. responds. let me take you to the uk. this is the scene outside britain's supreme court. we'll bring that up in a moment where appeals are being hear to boris johnson's decision to suspend parliament you can see a handful of people outside there. there was actually a man dressed in an incredible hulk mask in reference to boris johnson's comments that he likened himself to the incredible hulk

taking the shackles off. unfortunately that man has not showed up in those recent pictures spe speaking of the supreme court, boris johnson insists that a brexit deal is beginning to emerge after his meetings with leaders. said it is still yet to receive any concrete proposals on irish back stock willem is live with us walk us through what happened yesterday. a bit of a contentious press conference there >> reporter: that's right. we had a meeting over lunch there as you mentioned from there, mr. johnson wept to meet his counter part at his

official residence there were hundreds of protests. they were very loud. there was a decision made by the british people, members there. holding that press conference outside would not be a graeat idea as a consequence, the prime minister would give a press conference on his own. he left the podium there empty without the british flag behind it he continues to talk and answer questions from the media very critical stance on the british government's failure to provide new concrete, written proposals that would prevent the need for irish back stock that will be worked on more quickly now to happen between now and the end of october when that

deal, in theory, needs to be closed what is happening here relates to that. the supreme court, 11 justices will be addressing some really thorny, politically charged issues around boris johnson's decision to suspend parliament, his advice to the queen to suspend parliament we'll have discussion for three days over the decision in the scottish court and the london high court at heart of this will be whether courts can rule on something that is a political decision for parliament if they decide boris johnson has acted in an unlawful manner, a big question of what would happen next. could they recall the parliament

under queen elizabeth's jurisdiction and give lawmakers more time to frustrate the brexit strategy. that's what a lot of people will be watching closely. >> you talk about the government of recalling government if deemed unlawful. what are the repercussions on the prime minister himself >> recalling parliament rather than government. government is still operational. his critics, men like former attorney general, if his advice is found to be unlawful, we could get a decision by friday or early next week, then the prime minister would have to resign his post. his supporters say that is not necessarily the case in an interview this morning, they did say the government would honor whatever discussion

came out of this review in the next few days. >> willem, we are getting very close to the official brexit date or what boris johnson is calling a do or die brexit day of october 31. about exactly a month away from that october eu summit what should we watch out for in terms of more information of potentially closing the gap between the brits and the eu on a deal >> the challenge will be understanding what the language you hear from european leaders means and the language you hear from british government ministers mean the british government negotiates with the european commission they get their mandate what the british government has tried in the past and seems to be doing now is to sound out these various leaders.

to understand how comfortable they are with potential changes they are looking to propose to the alternative without that backstop, they think this legislation and parliament with a deal can happen. there is a lot of opposition across europe to a deal. they agreed with theresa may it will be a bit of a climb down from them if they are to accept these alternatives and insisting that these be operable is a key phrase if the british government come forward with propositions and do so in a manor of writing if those are deemed legal, that will be something that investors can dive into and understand exactly what the implications of that will be >> thank you for giving us the

latest outside the supreme court in westminster today. shifting gears, let's look at what is going on in israel. polls have opened for the second time in less than six months the prime minister netanyahu cast his vote. the race is tight with netanyahu facing possible indictment for corruption his party is neck and neck with the blue and white party he could escape charges if his right wing block wins 61 seats as always, you can get in touch with us on twitter tweet us directly at cnbcjulianna >> looking forward to the feedback on the dancing video. >> the u.s. strikes a deal with japan as it warms up for fresh

negotiations with china. >> time to get in the game president trump launches against the fed ahead of the two-day meeting this week. more after this break. 300 miles an hour, that's where i feel normal. having an annuity tells me my retirement is protected. learn more at retire your risk dot org. my teeth have been feeling really sensitive lately. well 80% of sensitivity starts at the gum line, so treat sensitivity at the source. new crest gum and sensitivity starts treating sensitivity immediately, at the gum line, for relief within days and wraps your teeth in sensitivity protection. crest.

welcome back to the program, the head of atlantia could step down today he's lost the support of the top share holder and will resign at a board meeting today. that comes amid a growing scandal over the genoa bridge disaster they found evidence that safety reports had been falsified in order to mislead transport ministry officials shared are higher this morning, following a slide of some 16% over the last two sessions >> italy's new government is

undergoing a test. i sat down with the leader at the end of august in the mist of the meetings and i asked him about creating a spin off party. >> anything is possible in the crazy italian politics before to discuss about my party, about the last in italy, also the uk and usa, everywhere there is a discussion about the future of the left my opinion is first we have to block and the very dangerous idea about relation with russia and relation with anti-european parties, hate speech about women and black men. then we will discuss about the

internal division of my party. first priority, salvini please come back to home or beach or all the dancing which is his dream. second, we'll discuss about politics >> that was renzi responding to me now we have confirmation he may go ahead and pull the plug as soon as today. claudia, i think the timing of this is sooner than anticipated in italy >> it is seen by some as sort of an ambush. the way he defends himself is that this is the only time, this is the right time because you can start the new government with clarity it is quite complex.

as he said, anything is possible in this crazy italian politics it changes the landscape of the situation for the pd for that party, it takes away possible support for the party with followers going with renzi and removes the big fracture within the party. so then the pd can restructure and form its new identity. as far as the coalition is concerned, it becomes more fragmented, yes. but it becomes bad but then again, the clarity. the coalition goes forward with a clear idea things won't be happening within the scene but will be happening outright the good part is that the coalition is fragmented. this could be positive the bad part is that renzi could be the one true strong opponent.

the one that could face salvini going forward. this comes months and years after the establishment is taking hold here these parties are having to refind their new identity. this could be the very first step of what the future italian political scenario will look like today is the day in which he is expected to make an official statement. he needs 20 upper house parliame parliaments. and the details still need to come out it's not yet obvious of how the outcome will be. for the government, he has a new scenario in front of him ranzi has said he will support this government. >> claudy, thank you for giving

us the breakdown from italy. the ipo must go on that's the view of the wework parent they said they will strive to go public by the end of the year. this comes after the group abandoned its plans amid funding and investor appetite. the report suggests softbank was prepared to buy up to $1 billion worth of shares but wework is concerned it would still miss its target for more, head to cnbc.com >> moving on, deputy trade negotiators from u.s. and china will hold talks on thursday in an attempt to resolve the 14-month trade war coming amid high-level discussions in october the two have not met

face-to-face since july. president trump said they have reached an initial tariff deal with japan trump says the two countries have inked a deal on digital trade. neither of which require congressional approval in japan, the minister will reconfirm no new auto tariffs in the u.s. deal. donald trump has again hit at the federal reserve in a tweet, the u.s. president requested whether the fed would get into the game following the recent stimulus in china saying, quote, dollar strongest ever really bad for exports adding, they can't believe how lucky they are that jay powell and the fed don't have a include before that interest rate drop and stimulus is needed

>> trump interventions is among the factors involved u.s. reserve is expected to cut rates. changes to language and the number of decenters against a back drop of an ongoing trade dispute with china and surprise oil shock. it is important to note while the markets are expected to improve, chances are rising of no move with markets assigning a 34% probability of the fed staying put. >> the other way to look at that is that is almost more than 60/65% of that market point. that does tell you the market has pulled back a lot. on the back of better data even yesterday, looking at the university of michigan, we had capex fall by 19 points.

employment painted a strong picture in the u.s it is a fine balance now, mid-august, every analyst was concerned about the imminent recession. now people have dialled back their discussion of that they are looking to get ahead of the curve if things do slow down further and the recent oil spike as well. >> you mentioned wages back last week, when we were covering the ecb meeting we get the eci data. you can't ignore the fact that core cpi rose for a third month. it was the highest pace of inflation in 11 years. >> also one of the reasons fixed income is coming under pressure. since mid-august, we've seen a turnaround that has reflected in fixed

income and what the market is pricing in in terms of what the feds can do next step. even though president trump is putting a lot of pressure on, a lot of questions about whether a big cut or series of cuts is warranted. we'll have to see the language that comes out of the fed. before we head out, let's get a quick look at u.s. futures they are seen pointing slightly in the red slightly tilted better than we were yesterday that is it for our show today. i'm joumanna bercetche >> and i'm julianna tatelbaum. "worldwide exchange" is coming up next.

a lot of folks ask me why their dishwasher doesn't get everything clean. i tell them, it may be your detergent... that's why more dishwasher brands recommend cascade platinum. it's specially-designed with the soaking, scrubbing and rinsing built right in. cascade platinum's unique actionpacs dissolve quickly... ...to remove stuck-on food. . . for sparkling-clean dishes, the first time. choose the detergent that lets your dishwasher do the dishes! cascade platinum. the number one recommended brand in north america.

they use stamps.com all the services of the post office only cheaper get a 4-week trial plus postage and a digital scale go to stamps.com/tv and never go to the post office again. get a 4-week trial plus postage and a digital scale cake in the conference room! showing 'em you're ready... to be your own boss. that's the beauty of your smile. crest's three dimensional whitening... ...removes stains,... ...whitens in-between teeth... ...and protects from future stains. crest. healthy, beautiful smiles for life.

. it is 5:00 people at cnbc global headquarters. this is your five at 5:00. tensions mounting. new reports iran played a key role on attacks at two of the world's largest oil refineries in saudi arabia. a yellow flag. the dow snapping an eight-day win streak and opening another lower day. pressure on powell the federal reserve is kicking off the two- day policy meeting as president trump continues to call on the central bank to act. not working, wework's pare