ic plangyi] that's all for this edition of "dateline." i'm natalie morales. thank you for watching. [music playing] ji i'm joumanna bercetche >> and i'm willem marx >> on course for the worse days after the hong kong stock exchange drops the $39 billion take overbid >> u.s. china trade war keeps stocks on edge as washington black lists more chinese firms >> another flash point between the two countries. chinese statd television

suspends the broadcast of nba games after a houston owner backs protesters >> strikes at rival airlines will help to boost revenue >> good morning. welcome to "street signs." one of the top stories is lse. you can see a big move in the shares down 6%. on course for the worse day since 2016 after the hong kong stock exchange dropped the bid for the lse group. saying it continues to blee the tiup is compelling but it

acknowledged it was unable to compel management. big move in the shares down 6% joining us live from the london stock exchange you've been following the story closely. yesterday, we were talking about the charm offensive that the london stock exchange share holders had been subjected to and now this abrupt decision can you give us more detail on what happened? >> reporter: absolutely. you can say it was a bit of a surprise hong kong decided to walk away and not proceed to put forward a formal offer for the lse to put that move into perspective, we did see shares trade at 16.04

we have rallied from there the move we are seeing there sets them back a bit lse has had an incredibly strong run after they announced the refinitiv deal hong kong exchange has decided to walk away after the lse management didn't want to engage they said it was in the best interest of share holders for them to put this to rest given that management was going to entertain the proposal. it would have been an up hill and costly battle. in terms of where things stand now for hong kong exchange we heard from the chief earlier on overnight saying that the vision of the business looking forward is to build on the role we already have in hong kong, china and asia more widely they are going to focus their

efforts on the asia region it is going to come to a share holder vote by the end of the year and it will close in the first half of 2020 this has implications, this decision to walk away from lse for china as well and its future in terms of how investors access the region there has been increased competition between shanghai and hong kong with shanghai forming a relationship already earlier this summer. we have heard earlier on in september that their preferred way to access china was through shanghai today, you could say works in the favor of shanghai and away from hong kong the question for exchange investors is lse

refinitv is next on the agenda moving on to carrie lam, her government says they have no plans to legislate new powers. as you know, they banned the wearing of face masks. this provoked a fresh round of protests from activists. earlier today, lam said it was possible she might request help 23r beijing. >> at this point in time, i strongly feel we should find the solutions ourselves. that is also the position of the central government that hong kong should tackle the problem on her own if the situation becomes so bad, then no options could be ruled out. if we want hong kong to have another chance >> let's talk about the reaction in the global markets. you can see a lot of red as

markets are feeling a lot of tension ahead of the upcoming trade talks set to take place later this week. things have escalated. the trump administration has added 28 organizations to their black list over their role in human rights abuses. no progress will be made twreen the two sides later this week. certainly, raising the antics there a little bit and not really setting forth a tone. most tladirading in the red. stoxx 600 opening there in the red. we have tipped southwards frmt really risk is the theme of the day. let's not talk about the individually european indices. starting with the german index,

it had better industrial outputs. better than expectation. a little positive sign out of that industrial sector we have autos and chemicals trading. cac around 5,500 italian index down as well the uk index the ftse 100, the relative outperformer dipping a little bit. almost .1 of a percentage point weaker negotiations are continuing this week the uk government published a list of a proposed tariff and what would happen on a no-deal brexit we are getting closer and closer remember lse is one of the names we are focusing on down 6% in trading

china services sector grew higher operating expenses drove up cost and this had a negative impact on those companies. the pmi fell to 51.3 but that is still above that 50 point mark wednesday, we'll see the release of the fomc recent meeting remember policy members voted to cut interest rates but they diverged over the central bank's interest rate path on thursday, we'll see high-level talks on friday, we'll look at u.s. import and export prices during september. >> a lot to watch out for. the u.s. has added 28 companies over a black list saying

treatment of muslim workers precipitated the move. including hick vision, the world's largest manufacturer of surveillance manufacturers >> reporter: china's vice premier is headed to washington for discussions with his u.s. counter part, u.s. secretary and trade commissioner the talks will likely be complicated by the decision to black list 28 chinese entities for human rights violations of the muslim minorities, the uighurs in the west. saying it opposes the move arguing is will hamper efforts since it would detour international firms with communicating with the u.s. government prog rels already appear dim after weekend report suggest

that china would take subsidies off the table. overnight, president trump said he wants a big deal. however, analysts are skeptical and believe the two sides might only agree to meet again at the apex submit in november. showing growth in the services sector fell to a seven-month low. they didn't disappoint, recovering in a surge to travel and movie going. the general manager of the houston rockets, the nba team that made the chinese player a star unleashed a toernt criticism. there are third-rail issues for beijing such as hong kong's

protest movement the general manager deleted the tweet and the nba has distanced itself the fall outhas been swift the nba has canceled all four overseas trips to the area and houston rockets is no longer searchable on ali baba site. >> the chinese broadcaster says it will immediately suspend its broadcasting deal with the nba and, quote, investigate all exchanges involved with the american basketball league after adam silva defended and backed freedom of skpengs. the chinese channel said any statement that, quote, challenges national security

does not qualify as free speech. welcome, joining us in the studio let's talk about the chinese economy. efforts to slow the downward trend, are they running out of steam themselves >> certainly diminishing returns, to most, it is largely a carbon copy of what was implaymented in 2016 what it has done is slow the rate of decline in industrial output in the broader indicators what you had not seen was the upswing of supply and margins generated as a result. there is much less evidence of that as generated that kind of bounce back. >> is that because policymakers

there have their hands tied to some extent? >> i think it is the latter. the reason is because what has crystallized or what crystallized the 2015, 2016 down turn is what would maek thke th less reliant this is a less external force as a result of the trade war. the same precipitation but against a different disease. whether it is well enough targeted >> do you think the chinese authorities are comfortable growing at 6% possibly even lower given that they are squarely focused and wanting to

prop up and in the deleveraging as well. >> this is a different balancing act. you are right. those levels are possible over the last couple of decades as the demographics in china change they go through their development journey. it is weather that management level. going from 7 to 6 to levels we are more familiar with being able to do that is the delicate balancing act here. that is what chinese authorities are going to try to pull off it is a hard thing to do looking at other countries, there have been significant slow downs as they attempt to recalibrate. >> we had analysts who say at

this point, we are a year away, he reckons the leverage is still with china still with more and more in the u.s.'s favor china don't feel a particular need to make concessions to the u.s. their economy is growing not showing a lot of inclinations >> two justifications for the await and see approach what will the political side in the u.s. unearth in terms of a potential relations. the wait and see based on political change, it isn't necessarily keeping its ears open some very hawkish commentary

especially elizabeth warren. unclear when you change the dynamic, the second thing authorities need to take into account. as china itself tries to hold this line of foreign powers are not good to intervene, they need to recognize thats that not the way the global economy works you cann you cannot say as they said in the last week during the golden week, the new wide paper coming out of china the domestic affairs are not the concern of the government. that line cannot be held in a fully globalized economy which is the trajectory china is headed in. >> the first time the u.s. is bringing in human rights abuses

in as well >> part of that is designed clearly to ramp up pressure ahead of negotiations. you are right. you'll see the trade department using various issues to justify a more hawkish stance. >> all right we'll pick up the conversation chief economist. also coming up, more up heaval as the new ceo announces the latest restructuring plan. we'll be right back. (danny) let me get this straight.

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previous expectations. the firm also said its bookings for the first quarter of 2020 are at a similar level >> thyssenkrupp is ready to

unveil a new plan that could affect one in four workers cutting costs while two divisions are expected to be closed down. another restructuring plan is yet to come. what does this mean for them in the future >> if you really shed all these assets solutions and the component solutions. the various industries with their products, then what remains is the steel business. they are also trying to sell the elevator business, which is highly profitable. the price tag could be as much as $18 billion euros for that.

they are sitting on a very high debt pile. at the same time, they had difficulties raising revenues. that is crucial when it comes to the new plan the new interim ceo who pledged not to stay longer than 12 months comes up with that bold plan after she got the job. p parachuted in to replace the old ceo because there was some disagreement about the future of the company. it tells us that the situation is really tense. bold steps are needed. the fact that one-third of the 160,000 could be effected. it doesn't mean we'll see that much layoffs

they'll be perhaps sold or partnered with others. we'll see a lot of industrial action going forward when it comes to thyssenkrupp. shares trading lower back to you. >> ireland outlining a detailed extra funding to curb the impact prime minister boris johnson told the eu 245 his offer is on the table. he's awaiting the response we spoke to the irish manager back in september and asked then how effectively this upcoming budget could handle a no-deal brexit >> our point of view is to look at what plans and strategies i

could put into place that would protect to such change i believe because of the strengths and all that we've gone through, we'll be able to do this. >> the uk says 88% of imports will be duty free. the scenario revises the scheme. the arrangement provides for 12 months and a full term in january. that full report is released >> how do you see the distribution of risk in terms of the outcome of a no-deal brexit, or an extension at this point? >> in terms of what has changed there is a slight possibility. i don't think that is the base

case that is required to request the extension. the marginal change since those have been published is that this is potentially some common ground to be found on the block and assembly to have a full-year cycle. also on being outside the customs solution not just the alignment but the movement on what free trade arrangement may come subsequent that may mean the whole of the uk in the relationship with the remainder of the union >> for those thinking about vesting in the uk, what is your best-cased scenario for political outcome or asset

performances >> the problem with uk assets is there has been the date of june 16 where a mandate has become etched in the siekyle politicians from a binary vote of yes or no now providing a new point in time to check that we can move forward. in terms of asset class performance, oir estimated those are valued below where they should be if we hadn't had the vote in 2016 if you get some political clarity, some of that is what we've seen emerge since 1989, 1990, so we are talking about a gap. some of that should close. and the moment they'll stop

picking but buy into the market on the clarities subsequent upside to the double digits >> on a no-deal scenario some time has passed businesses have used that time to beef up or cushion the no-deal exit even the bank of england has updated the forecast still contrasting but not as much as some of these had recently envisioned. what do you think now as time has passed is not as bad as it looked say, 12 months ago. >> so, the time, i felt the 7 to 9% of gdp over the 15-year window was about twice our estimates would be because they received the response on the fiscal side.

we are starting to see the government, the public sector start to use its balance sheet to lean in the impact that will happen in the event of the no deal plus they've had more time when they get close to the deadline, they are going to ramp up the expectations. still a problem but probably not to the scale originally envisioned >> chief economist coming up, sampson says it expects operating profits to tumble but still expects to beat estimates. miey think a turnaround is cong for the smartphone maker.

welcome back to "street signs. >> these are your headlines. >> a failed exchange after the hong kong stock exchange drops its $39 billion bit. >> european trade war as

washington black lists more chinese firms ahead of talks >> another flash point chinese state television suspends the broadcast of nba games after an executive from houston rockets back chinese protesters in hong kong. easy jet says strikes at rival airlines will help boost revenue. >> the hand overfr from chinese marks was pretty high. a lot of green on asian equities nikkei up. the tone is subdued. trading caution ahead of the trade talks and some of the

stories we are focused on. the only patch of green is the ftse 100 up .1% point one stock there, lse is down 6%. the dax is down. cac is down and the italian index also in the red. a lot of nervousness after the set up between china and washington have turned a little sour after the u.s. administration decided to impose and add 28 companies to their black list that has not been a positive development. as for foreign exchange, we are seeing a little bit of movements here slightly firmer. the dollar is trading on the back there we are seeing a little bit of a

bid. the nikkei was actually up 1%. we are seeing a little bid sterling pound trading down about a quarter of a percentage point but has been relatively stable as we've been talking about. we are getting into crunch time in those discussions over the potenti potential of the deal for summit the picture today is some what mixed and caution. opening up lower the dow is on the flat line. hovering around and some cautiousness failing a lot of the trade sectors are coming under pressure like basic resources. we'll have to see how things pair up. all eyes focused on those trade

talks. we've had a statement out saying they note the enhancement made it does not intend to make an offer and the company intends to remain committed regular processes are on the way. the approval is expected to be at that meeting in 2019. the transaction will remain on tract for the second half of next year. let's talk about big picture stuff now. trust and growth that goes hand in hand. a modest slow down could pave for the way for strong leaders joining us now in the studio expand on that idea. >> sort of word for me to be

talking politics and such but it is what the market wants at the moment most people's instincts will say we can do better than this and get growth back on track but at the same time, we've seen a shift towards deleveraging in the long term, i thinks that what we need to be doing the big term in the markets is the japan fication across the board. if you vote for me, it will be better for your children in the future you lose to making america great or taking control in the uk. there is this cycle whereby leaders promise things and are unable to deliver. there is a funny parallel in that market valuations are distorted. the concept of trustor truth is

distorted. they have putting their faith in the central banks to prop everything up. on one hand, that is a powerful force. >> doesn't lower growth mean, we just have to get used to this concept? everything is growing at a slower pace. there for the investment return will be lower in the future as well >> ideally yes, a lot of cycles which ran in the previous direction, so investment and trade is capable of running in reverse. that is towards the way. the debt raises all of these

concerns that start to become an issue. it is hard to unwind what it is we have been doing that's why for us, doing a japan and deleveraging is kind of a best case but there is a lot of reasons we'll be able to doubt that >> any reason why you look at the behavior of consumers, they are not spending more freely and in fact saving more cash than you would expect in the past >> one of the central banks doing lower rates. as you say, it is not working. you get these relationships and look around the world. the more money people set aside in cash rather than going out and standing we are seeing real signs of what you are able to do and as opposed to nervousness of debtor the weirdness of negative interest rates consumers and on the corporate

side it is all for refinancing. none is for investment and rehiring the sort of distortions and the fact that everyone feels the markets haven't been following the fundamentals has become an issue. >> something interesting is that despite the bank putting this into the system, ironically, the system is becoming less liquid and trading is subject to wilder swings and more gappy movement because a lot of it are owned directly or indirectly by the strong man or what you call the central banks. >> not just because of the markets but this break down. what is the receipt for diversity and stability, it's investors buying and selling if you were a bottom up valuer,

you went out of business everyone is following the central banks and reaching for you. that is one factor driving the market it is this herding >> and it is a small window to get out. thank you for taking the time to chat with us the global head ever growth at citi group netflix expec netflix -- samsung expected to see growth if you look at samsung, their two main business, you've got their smartphone business and chip business. it looks as though they came through on the smartphone side of things. >> we are continuing to see the

business which is the global story. supply, overall weakness in demand trade tensions we've seen the chip operating profit has declined. other segments, as you mentioned, consumer electronics has stayed steady. what this is showing is strength in that smartphone segment partly because they released the galaxy note 10 it released that new lineup? augu -- in august some concern this is taking away from huawei partially in europe due to that huawei phone not having the google apps we have that galaxy fold finally on sale. that is a $2,000 device. that could be good for samsung

too. >> one of the biggest semiconductor firms by revenue in the world what are the results for this quarter tell you about the industry as a whole? are they sort of a bell weather. >> samsung is the leader in this space. >> what many analysts are hoping is that they are seeing a bottoming out. part of that is led by smartphones and by this broader demand example for 5g. this could boost chip makers like samsung the other business is telecommunications equipment it still has less than 5% but it is trying to position itself in position in terms of huawei, ericson and nokia.

>> people weren't upgrading smartphones as frequency as they had in the past. with the 5g, is that set to change >> it looks like the demand for the 5g phone is strong in south korea, there are reports the 5g phone is the best selling phone there. we don't have a lot of word yet. apple hasn't even released a 5g device but if it looks like consumers are lining up to buy 5g, that will be interesting for apple as it doesn't have that device especially going into the holiday season >> coming up on the show, the nba is caught in the crosshairs of tensions between protests in china. more on that when we come back

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>> welcome back to "street signs. one of the top stories has to do with the london stock exchange

they have released an announcement where they reiterated their decision to move forward to buy refinitv and expect it to pass. the approval expected at a meeting set to take place next month. juliana has dashed back from the london stock exchange and joining us now probably a little warmer here than out on the road lse shares are down about 6% how much premium was baked in to begin with once this story emerged? >> before the hong kong exchange offer came through, we were trading around 68 pounds per share. we are still above that. we are above that level.

it is important to think about where we've come since august when the deal was announced. so going the route of hong kong exchange would have introduced significant down side risk it would meet they would have dropped the refin tiff deal going back to pre-august yes, we are retreating a little bit but still hanging on to those gains since august >> what was the terms of these attempted business models. >> it would have been an east, meets west exchange. this is the direction a lot of analysts and management are going. we are going to see consolidation of the global exchange this would have created an

18-hour trading zone offering a way to be the gateway to china and back and forth. now that that has fallen away, refintiv offers a different path that can compete with the likes of bloomberg >> is it true they have their sights on another market in the time zone or is it a case of just sitting back given how many challenges and obstacles they face >> management says they are going to focus on asia, china, hong kong and asia more broadly. i wouldn't rule it out yesterday, we were speaking to steven from vision 57 who suggested that perhaps they could become part of the mix here they don't have the refinitiv

angel. but certainly that would weigh on the tiup as well. >> back to one of our top stories. the u.s. has added 28 chinese companies and public security bureaus to the black list. concerns of treatment of muslim minorities has precipitated the move comes ahead of trade talks this week the chinese state broadcaster cctv says it will suspend its broadcasting deal with nba and will, quote, investigate all exchanges that involve the american basketball league they contended the nba president after he defended a tweet from the executive from houston saying the league backed the

freedom of expression. the chinese said, any statement that challenges national security does not qualify as free speech. joining us now very early on the east coast let's talk about free speech, how does it come between u.s. and china when it comes to business >> listen, it is going to force a lot of american companies to make difficult choices when it comes to how their employees operate in social media and more importantly, how they do business in china. south africa in the 1980s where there began a cultural boycott encouraging others not to go to south africa i can see how there will be increasing pressure on the nba, on hollywood to limit or change

how it does business in china. perhaps no more red carpet premiers in shanghai as long as there is a crook down in hong kong and internment of uighurs >> as american businesses, let's talk about politicians and officials and the trade discussions. that building behind you, do you think they've been vocal enough about the potential of these talks to break down and the impact on the u.s. economy >> listen, i think the kind of deal that was apparently fairly close to happening last spring, which was kind of what you would expect more purchases of u.s. bro duct, including agriculture. to tie up ip and the transmission issue it is likely to get that kind of

deal because there is this national security issue. human rights issue that kind of deal would not go over well. clearly now, many american politicians are viewing china as more of a multipolar threat and not just economics people need to start bracing themselves that this trade war is not going away and needs to be with us >> there seems to be bipartisan support when it comes to cracking down to china now we are shifting away from being a trade war to a tech war and now a cultural boycott what type of precedent does that set for future discussions whether a democratic president or republican president, is the relationship with china permanently going to be changed for the future >> i don't see how there is

going to be a deal that would return the pre-trump status quo with very low tariffs and just treating china as a country moving on a long road to becoming a democracy like korea. democrats haven't said a lot about china. the ones who have such as elizabeth warren have outlined a fairly tough stance that does not include going back to the pre-trump chinese place. high tensions for the foreseeable future >> from thousands of miles away, it is complex of an issue to

unravel. the president says he wants to withdraw troops. others in his party have said that is not a good idea but they'll back him in terms of this impeachment inquiry how does that play out >> i think the numbers you want to look for is the president's approval rating. the house is going to impeach president trump. then it will go to the senate. the question is how many republican senators, if any, would vote to convict the president. right now, the smart money is that number is approximately zero i don't think that is necessarily a sure thing there are all sorts of republican senators who are wildly unhappy who thought if they could vote to convict the

president and not lose their jobs is a rather high number 30 or month. because of the blow back, showing how deep that discontent is we'll see what else comes out in this trial which might make it more politically viable for these senators to vote for the president. >> thank you for joining us live from washington, d.c quick look at u.s. futures european futures are firmly in the red. a mixed picture for u.s. futures. that is it for our show today. i'm joumanna bercetche >> and "worldwide exchange" is up next. (client's voice) remember that degree you got in taxation?

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>> it is now 5:00 a.m. why a new riff is forming over china and the nba. new chips keep falling for boeing as they face a new $1 million lawsuit over the grounded max pressure on zuckerberg ne