i'm natalie morales, thank you for watching. [music playing] welcome to "street signs." i'm joumanna bercetche these are your headlines european stocks stage a recovery as china/u.s. trade hopes. and we'll bring you more momently the british government said it would have been a waist of taxpayer money to save thomas cook assessing the impact of the tour

operator's collapse. the british supreme court prepares to rule on the lawfulness of the decision to suspend parliament he says he wants a fresh nuclear deal with iran and says donald trump is the guy to get it done. >> and saying the trade war is the biggest obstacle >> what scares me is that instead of trade buying the big window of opportunity, it weighs like a big dark cloud on the global economy >> good morning. welcome to "street signs." yesterday, about 24 hours ago, we had those extremely weak pmi numbers coming out of germany. we are just getting business numbers coming out now

it is saying german business moral has risen in september the climate index is at 94.6, slightly higher than the forecast of 94.4 current conditions come in at 98.5 better than the forecast. the forecast came in at 91.8 so it is interesting on current climate conditions came in higher than expectations the forward looking metrics actually fell to 90.8, that is lower than expectations of 91.8. slightly better than i would say putting it all together. we had very disappointing manufacturer data. this would come as some what of

a relief the german sentiment right now, still the early signs that could be perceived as green shoots >> the ecb president has warned of a prolonged down turn in a speech, the outgoing central bank head backed the measures to protect against economic uncertainties draghi approved the move to lower interest rates >> lowering the facility rate helps to further improve the borrowing conditions of households and businesses. negative rates also encourage banks to lend to the real economy instead of holding on to liquidity, thus supporting the rebalancing channel of the asset purchase program

the impact of the deposit facility rate is reinforced by the strengthen for guidance on the likely direction of our monetary policy in the future. >> meanwhile, incoming ecb chief lagarde spoke about rates. compared to how things are compared to her beginning in 2011 >> the situation has changed massively. when you look at financing costs, they are much, much lower now. when you look at the strength of the financial players and super vision, completely different much stronger, much better super vision and better equipped as well on that front, it is a lot, lot

better there is that risk apprehension, which can also comes into play what is not as good as it was is the fiscal and monetary space many of those help in those days, many finance ministers had space and room to inject stimulus. central bank governors had some leeway in interest rates and easing which was yet to be invented at the time different situation, we are probably better equipped on financial markets. risks will come from somewhere we don't anticipate. >> i wonder, do you think it is possible for another european sovereign debt crisis to happen? >> if the euro area can strengthen, and there are

indications that this could be on the short-term horizon. with a real banking union, with a better capital market, which has euro area dimension and good death and mo debt, i think that region will be in good shape >> negative rates were also major topic at the singapore summit where cnbc spoke to top financial figures. >> we are not convinced that the current efforts of the ecb will have the required effect what draghi has done in the current crisis was great, courageous and necessary it is our impression that using this instrument now, probably the negative effects out weigh

the positive >> the economy wouldn't be where we are today if through the crisis and through the eight last years, we have had many challenges, he was not there he has given a lot to europe whatever it takes. that's a great achievement >> lots to discuss in europe i want to bring in david owens it is great to have you with us. let me bring you back to the efo data we are getting some comments now saying the down turn seems to be taking a breather. >> it is interesting but not conclusive pmis have been unreliable to recovery

they exaggerated the slowdown we have seen. the concern yesterday was really that the weakness in manufacturing spreading to the service sector if you look at germany and x out manufacturing, which is less than 25% of the german economy, which always surprises people. the rest of the economy has been growing about 1.5% year on year. look at bank lending growing now 7% year on year. also house prices are picked up, commercial real estate and wage readings are the highest we've seen since the early 90s >> so let me switch that back. you say only about 25% of the german economy is manufacturing. many people are surprised to

hear that number if you flip it, isn't it worthwhile to say, in that case, germany may as well sit this one out and wait for the conditions to get better. if they sit this one out, hoping the trade wars or external factors will ease, they won't have to. >> i hope it washes. under their own fiscal break rule, they have run to ease the policy to them, as christine lagarde was suggesting, if there is a downturn, then what is next. germany should be taking much more of a lead on this on green investments. they've got incredibly low rates, negative rates. that's linked to the excess of

savings. you need to bring the two together and push the eurozone >> i was in munic yesterday. they are not doing a lot to that effect i want to take it to the ecb, the question i have here do you think the bar is a lot higher now given how much disagreement we got at the last meeting? >> it is still interesting looking at how they put through. it was interesting, in london beginning of last week where he intimated they could do really more the idea that the depo rate has hit the floor in their mind isn't true they are now thinking they are not going to be raising rates shortly after ending qe, which

means you may extend out longer than the markets are currently pricing in at that point, what should they day. at that point, they have to address the limit. did they start addressing equity or more climate issues deciding to buy more carbon-like companies or pushing politicians. the ecb is the only game in town and carrying on. >> and certainly draghi's patience seems to be running thin he's pushing for fiscal easing to be running hand in hand looking to the actions, the measures they announced. wasn't it undermined by the fact that the next day, you had the governor's of germany coming out

and saying, well, we disagreed on the front of things isn't that a problem, if the ecb aren't in front, why should the public set out for what they are set out to do? they gave the speech to address that we can do more. you don't see christine lagarde as a new person coming in. this will be a major review. if you are sitting there and see these negative rates bring major concerns in the moment, the europe ozozoe doesn't have a shored up policy. that is something they'll have to address as well the more they go negative, the morris being will come into the

system >> quick question, why was the take up so dismall in your view? >> that's not the big stair. the big stair is december. at the moment, germany is growing 7% year-on year. not fast enough but they are feeding through bringing stability down the line. >> thank you for joining us. chief europon economist. if you want to get involved in the conversation go to street signs a do you have concerns about mild memory loss related to aging? more on starbucks cracking down

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>> welcome back to "street signs. wall street saw a little lack

luster session with the dow in the green this after reversing losses earlier in the session. the dow and s&p are still within 2% of their all-time highs nasdaq within 3% overnight, better for asian equities the hand over for europe is positive as well the stoxx 600 is up. yesterday, we had that abism abismal pmi data the efo data this morning out of germany was a little more positive that's giving some what of a boost. let's get into these and break it down. the ftse 100 up.

big day for the uk we get the supreme court decision where the highest court will decide if the government's physician to suspend is lawful or not keep an eye out for that today big event. the dax is hovering around the flat line. cac up in france and in italy, trading slightly in the green too. let's talk about individual sectors. we are seeing a bit of an uplift for some chinese sectors household goods which is essentially luxury names and defense and health care up autos continue to be a drag and come under pressure down .7 of a

basis point. i want to point to travel and leisure. that has been a sector under a lot of focus under the pressure of thomas cook tui was up 8%. today, up about 1% travel and leisure continues to be supported donald trump continues to question mnuchin over a canceled chinese visit. the president seemed surprised when he said the cancellation was at america's request >> they are going to reschedule that that was truly our request >> why was that our request out of curiosity >> we don't want there to be

confusion. >> but we want them to buy farm products they've committed to buy agriculture. we should get them over there as soon as possible >> lagarde saying the u.s./china trade war is the biggest threat to the economy >> instead of trade being those big windows of opportunity for economies that want to compete with each other, it weighs like a big dark cloud on the global economy. based on the latest information, if the tariffs threatened to be applied were to apply. we are talking about reducing global growth by 8%. that's a massive number. growth forecast is 0.5%. that hurts it is it few jobs, less

business, less investment, more uncertainty. the french government wants to create a european version of the nasdaq for french unicorns and saying facebook's cryptocurrency libra creates significant concern. charlotte joins me you kwconducted the interview. i find this interesting. they want to create a tech hub but they are skeptical on new technologies like stable coin. >> i did ask you want to be a protect nation but leading the charge on tech tax. he said look, if we want tech, we need to be a tech leader but

act responsibly. he's 36 years old. very much the same generation. they worked together when macron was finance minister he's behind the whole tech for good meeting and the choose france meeting for the stop in versailles for a nice dinner before they said to dav 0 everyo davos. he was in london last week to pitch paris as a tech destination. we asked him how confident he was. have a listen. >> this is not the concern of france i've seen the report of the g 7. this is the concern of each

european developing countries. there is a lot of question a process led by the ecb and facebook they have to answer the question we would perceive and make based on the decision. i notice facebook already acknowledge that they would not go for libra if they don't have the state that they need in france we should continue the discussion but sure libra raises a lot of request >> so this was said of the french digital minister. his visit came on the back of the announcement extracting $5 billion extra funding. they want to consolidate they say, it is very much a

question of serve ty for france and europe to build this tech scene here >> that does need a bit of a boost, doesn't it? >> thank you from one tech story to another europe's second highest court has upheld another deal. the court dismissed an eu order that star backs pay that amount to the netherlands offered by eu companies. interesting. two opinions break it down for us >> let's rewind back to 2015 when the european commission under the arms there announced both companies, fiat and starbucks had received illegal

tax benefits in luxembourg and netherlands. after these two companies complained about that decision was that in the case of fiat, yes, the decision was right. on the other hand, on the starbucks case, the european commission was wrong we got in touch with both companies. we haven't heard from them just yet. we can look to the future a little bit these are two important investigations this could potentially open the door to further investigations into other tax cases we know they are investigating ikea and nike. perhaps we could see further developments on that front >> looking at these numbers, it is only about $30 million euros.

it sounds like more of the symbolism of the decision. >> the numbers are not that big. compared to the case involving apple and ireland. when the european commission announced back in 2015, it said both companies should pay between $20 million and $30 million euros. at the time, it was not so much about the number but making these big companies pay their fair share in the case of fiat, the company had paid not even, that is quoting her remarks, 0.4 million. so this was an advantage of the european commission back in 2014 was criticizing and when it comes to fiat, they support. >> really interesting. today, the eu top board issued

two separate decision. it shows they have a difference of thinking. it is not always going to be a slam dunk for the eu tax man >> that's very true. the eu general court has ruled on global finding that the right to be forgotten law does not have to be applied worldwide. a story written up by our very own silvia who is on top of all these different tax cases. coming up, johnson judged. the historic verdict on the suspension of parliament and hillary benn will be coming up later with us these folks don't have time to go to the post office

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recovery the german efo numbers just beat expectations the british government said it would have been a waist of taxpayer money to bail out thomas cook as the effort to bring home thousands of travelers. tui rises on the impact of the tour operator's collapse the british court set to rule on johnson. he says he wants to look at a freesh nuclear deal with iran and says trump is the guy to get it done. >> and christine lagarde says trade war is the biggest concern. >> instead of trade being the big window of opportunity, it weighs like a big dark cloud on the global economy

>> despite that big dark cloud, we are seeing european markets trade with a more positive tone. the ftse 100 trading up. decisions coming up in about an hour's time. on the heels of weak pmi data. the italian index leading the charge let me bring to you foreign exchange markets today, flattish 1.0990 is where we are at. we are seeing the dollar firmer against the yen. cable is trading 1.2425 is where they are

that could have serious implications for the government and whether parliament will return to session. let me take youto u.s. futures the three markets. s&p open about 10 points higher. dow about 90 points higher by the end of the session, three indices were up around flat. it looks as though today for the u.s. markets, the mood is a lot more positive. in the day ahead with the uk supreme court set to design whether the chinese decision was lawful but boris johnson says he will not resign even if they hand down the 11:30 cec finds with the queen. willem, break it down for us. what do we expect to hear out of the supreme court?

>> reporter: it is difficult to describe likelihood to any of these possible implied consequences if the court decides this is not something judges should decide upon at all, that is great news for the government if they decide this is not a matter for the courts, again a relatively good result for the johnson administration there are three possibilities if they decide this is unlawful the first could see parliament being recalled at the behest of the speaker. that is an argument made by one of the lawyers the other alternative that boris johnson might be relatively happy with, if this is an unlawful action but within

power, if he decides to suspend for better reasons, less controversial motives, he has not ruled out the possibility he would suspend for the second time it could be that the court was unlawful and requests the prime minister himself that current date it is scheduled to return. that will make it difficult for the prime minister and lawmakers across for maniembers for his on party. check out the rulings on the piece on our website at cnbc.com >> a lot to parse through when that decision comes out in an hour's time. we'll speak to you when it does. later mp hillary benn joins

us i want to talk to you about the supreme court decision the prime minister has said he would not resign what should be the response of the government >> i think we have to weight for the judgement at half past 10:00 this morning this is a case of enormous issues this first is, is this a case that they can hear. historically, the agreement has been parliament does not interfere in the courts. the courts does not interfere in the parliament that is the basis of our separation of powers however, i thought one of the most important arguments put is

this the government decided to send us away for five weeks supposing they decided to send us away for 11.5 months. the court would have to decide is that okay it would be very hard to sustain that decision. that would be the first decision the second is was it unlawful. i would say in the court of public opinion, it is pretty clear why boris johnson decided to send us away for five weeks he didn't want us sitting doing our job. because in this moment, we have a job as mps to do whether people vote remaining or leaving on this issue is secondary. do you want your mps doing their job or is it okay for the prime minister to say, it is okay. off you go

we don't want you making the decision difficult for us. we'll hear that decision in about an hour's time i'd like to switch to the labor party's confidence what do you make of the decision to make a neutral stance do you deem this to be a legit decision >> i was not in the hall at the time the decision has been made there is no point arguing about that at all. >> in the runnup to the vote, i don't think it is really credible for the labor party that seeks in the runnup of the country. that is a decision taken that was not made a year ago we make big progress

i welcome jeremy corbin's work on this. i don't think it is credible to say, in answer to the question, how will the labor party campaign we can't tell thau now the reason why i tell thau, the person that would be in the exchange would be the home secretary, brexit secretary, the mayor of london, first minister in wales the leader of the labor department a lot of mps have made it clear we'll be campaigning when it comes. i'm not sure as a policy, it will surprise interviews on television and on the doorstep when people say are you seriously telling me, if i vote labor, i don't know which side

i'll be on the idea for me that labor would decide in the end it would be on the same side of boris johnson and the brexit party, i just don't think it is going to happen in life and in politics, you should stand by your principals and say what you think >> absolutely. many analysts say yesterday's decision will backfire because the remain votes will go to the live dem party does that worry you? >> of course it does the think about brexit is it has divided the nation j jeremy corbin has been seeking to find a way to bring the country back together. on the one hand, you have boris johnson who is trying to inflict

more on the people it will be a disaster for the communities. parliament is legislated to say he can do that if he doesn't get a deal he has to ask for a further extension. the liberal democrats have decided to move from a secondary referendum they are saying to the people who voted to leave, your vote never counted. it doesn't mean anything i don't think either of those are sustainable decision it is by saying to people, look, this is what leaving actually means. the essential promise was, you can have all your sovereignty back but don't worry because

every single benefit can be preserved because we are going to get a great deal. it wasn't true then. it isn't true now. brexit involves choices and trade offs this is the kind of choice you have to make to confirm the decision to leave and here is remain it is up to the people to decide. >> that is the democratic way to end. the final way is this. we are three and a bit years on. parliament is dead locked. we cannot prolong the uncertainty and keep asking for an extension and there for a revere referendum is concluded. >> just picking up on the point of prolonging, you put forward a bill that would force the government to ask for an extension in the case of a no deal that can be passed through

parliament if the government should choose not to follow the directionives of that bill, how will you respond? >> it is extraordinary that there is any discussion that a government of the united kingdom might not follow the law the rule of law either means something or it does not if the government would say it would not do what is required. it is very clear if he hasn't got a deal on saturday, the 19th of october. he must write to done alald tus ask for an extension there is not a lot of trust in boris johnson. if the eu offers an extension, the law says johnson must accept

it the purpose is to ensure we do not leave without a deal there is no mandate for it if the government doesn't up hold the law and do what it required of it, then i suspect you and everyone else will be reporting on another court case. there is no doubt that the government would end up in court in a case seeking to tell it to do what the law requires i find it inconceivable the government would get into that decision the senior law officer would be bound to say to the prime minister, i'm orry, you cannot flout the law, you must uphold the law. they would respect it very soon. they ought to come forward and say, of course, we'll uphold the law in respect to the bill

parliament has passed. >> hillary benn, thank you for speaking to you. for more on the brexit stance and how it is dividing the party. head on line to cnbc.com britain's business secretary said it would have been a waist of taxpayer money to bail out thomas cook. the civil aviation authority has begun transporting the 150,000 stranded tourists abroad 1,000 planes in 80 countries tui finishes the summer in line. the german travel operator said the winter bookings were down. the average selling price had increased. tui also said it is assessing the impact of thomas book's

collapse and confirms any remaining flights would be replaced by tui flights. also coming up in the show, the second largest ipo of the year, ap inbev raises above sentiment. all the details next with tough food, your dentures may slip and fall. fixodent ultra-max hold

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welcome back to the show, ab inbev has priced the u nirt at 27 hong kong units per share. saying it raised $5 billion. all net proceeds will go to repay debts and inbev will retain ownership in the spinoff. >> and in the data group to acquire refinitiv will maintain

in trading defending the bid to buy the lse as the company undertakes a charm incentive. let's bring in analyst from united partners. that was a little awkward for both ceos. they are going on a charm offensive. they announced yesterday they are working with european banks. so they can convince them about the merits of the deal what do you make of this approach >> clearly the advantage of having gone directly to share holders, they went to the board of lse and to show there was directly a proposal. you are then able to speak to share holders directly they are saying a charm offensive, it is pretty hostile

to what you do you've seen the reaction on the back foot. people are wondering why they've done this. there is something else from behind share holders are due to vote in mid-november that is coming up quick. if you think about it, the main sort of condition for the proposed hong kong offer to go through is for lse share holders not to vote refinitv, they have to convince them and plead their case before that vote. we thought it went directly straight away. >> until the share holders have a chance to bit on that.

why does it make sense for share holders here >> if you step back and take a look, it has already created $6 billion a pound. 20% up it is a transform tiff deal you cannot layer in the leader of financial data or in the channels but there is somethingmore not many people think about this fixed income is 10 times the size compared to equity with now. it has been 20 years behind. so really lse is buying into the negative trend >> one of the reasons i left fixed income trading back in the

day. beyond scale and creating a very large combined stock exchange. >> they have announced around a million, if you look at the effects of that transaction, it is from year one, two and three. to your point, you can't look at the hong kong proposal without looking at the refinitv one. the board will have to ask themself, do we think share holders are a bit of owning lse share of refinitv, the issue to black stone as a share holder. headquartered in london.

we'll do the leading or do you want to perform the hong kong stock and review the government >> you've laid it out nicely for us so what investors have to make a decision on soon bruno, we'll leave it there. on this rainy day in london from united first partners. president trump dismissed claims he offered aid to the ukraine in exchange for information on joe biden and his family he did not commit to unveiling the document we know democrats are pushing for the publication of that transcript where do we go from here >> we wait to see if that transcript will be released.

president trump has admitted to talking to the ukraine leader about joe biden and his son. hunter biden got a seat on the board while his father was vice president. biden says release the transcript, so do democrats and some republicans saying we just need to see what was said. president trump admits he did talk about biden on this call. he sees a problem giving money to countries that may be involved in corruption but has not made the link to say he would threaten to withhold the funding if in fact the investigation on ukraine on the bidens didn't happen the wall street journal and washington post are both reporting their sourcing that in fact the president had asked

days before this phone call for the funding to be withheld in all of the funding in the united nations likely to discuss iran, china and religious freedom. >> thank you for bringing us the latest that was tracie potts. a quick look at u.s. futures before we head out for the day up in the green today. s&p, do yw and the nasdaq before we go, a quick reminder m.at the ruling will be at 11:30 a. ct. we'll bring you that verdict live "worldwide exchange" is coming up next. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.

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it is 5:00 a.m. here at cnbc headquarters mixed messages president trump and steven mnuchin apparently not on the same page. all caught on camera california opening a new criminal probe into juul the wework's saga apparently just getting started the company's founder and ceo weighs in tech under fire from coast to coast and across the atl