that's all for this edition of "dateline." i'm natalie morales. thank you for watching. [music playing] welcome to "street signs." i'm joumanna bercetche these are your head lieps. phillips shares plunge after a warning trade tariffs will hurt the groups european markets turn negative after china tells the u.s. to, quote, stop putting pressure on chinese companies.

lvmh sets a trend after third quarter earnings sparks a rally. easing concerns after the impact of unrest in hong kong eurozone finance ministers agreed the $17 million budget. the group tells cnbc the new package is now ready to go >> this will be in the corner of financing the eurozone today and in the future. it is fully operational. this is the important thing. >> a warm welcome to "street signs. taking a look at european markets. despite a strong hand over from wall street which you saw stocks rebound. we saw european stocks under pressure and down 0.4%

it has been a fairly choppy trading session. we have a number of different headlines in the runnup between the days high-level talks between the u.s. and china and the state of the relationship between the negotiators. as you heard, china has urged the u.s. to stop putting, quote, unreasonable pressure on chinese companies. in addition, keeping a close eye on brexit. hopes fading around the prospect of coming to a deal. european stocks trading lower this morning let's look at the different markets and see what the regional split looks like. the cac 40 there

what is holding up in france luxury that has been on the back of a strong set of results from lvmh. beyond france, we are looking at red across the boards. luxury, the best performing sector basic resources overall at 0.6% higher autos, chemicals, at the bottom, health care, food and bev. overall, the negatives outweighing the positives at the moment phillips now trading 8% lower. they have warned they'll miss the targets due to head winds caused by trade tariffs. saying it expects margins to improve by 10 to 20 basis

points far below the initial target of 100 basis points they are sticking to the goal of 20.26. adding a cloud around the trade war more generally looking more closely at the action we saw yesterday. u.s. futures now have erased some losses after a white house official said they would cut short its trip to washington the south china morning post said they were dead locked prompting an early end to discussions. the new york times says president trump will offer a concession on huawei allowing some firms to sell some goods to the company. >> reporter: top u.s. and china negotiators will sit down tonight for talks. investors are still unclear of

the outcome. reporting that the trump administration is close to granting licenses to sell certain nonsensitive components to the chinese executive huawei. the south china morning post is quoting sources as saying they plan to cut their visit tod.c. short by a day the white house has dismissed that report telling cnbc it is not aware of any changes to their travel plans an official said dinner for the delegation is still on for thursday night expectations are low over the major deal president trump said he wasn't surprised the chinese didn't expect much. >> i think they feel i'm driving a tough bargain, i have to i told him, this can't be like a

50/50 deal so it doesn't work, right. you got to have a little balance. this has to be a better deal from our standpoint. i think they fully understand it >> reporter: reporting that the sticking point is that the chinese won't discuss technology and the u.s. won't budge on keeping tariffs. the global times wrote an editorial today sayingthey saw little signs of hope for a pleasant surprise at the talks reporting from beijing >> in addition to the trade kauks and conflicting messages, we had a close eye on yesterday's fed minutes. some sounded concerns over expectations of the central bank's rate path after they cut borrowing costs. showing, quote, a few

participants worried they were pricing in greater than appropriate. highlighting worries of the u.s./china terror war. both highlighted with policymakers voicing fears that a slow down could be more serious than expected. >> more firmly anchored expectations in a circle would help keep actual inflation and preserving our ability to change interest rates as appropriate to meet our mandate and looking at whether our tools will be adequate when the next down turn comes. we are asking whether communication practices can be improved to support effectiveness of our policy. >> showing several participants should provide guidance due to

tariff concerns. that language was left out of the final statement after it cut rates in september >> the u.s. separately can impose tariffs following a ruling from the wto. the discussion comes after a 15-year legal battle willem raised the incoming tariffs with the italian finance commissioner in luxembourg >> of course, we are not happy it is not my job to deal with trade policy but the italian government is addressing the issue. the by lateral level and european level it would be unfair to target italian markets. >> very pleased to say joumanna joins us live at the center of the trade issues

>> that's exactly it as you mentioned, so many issues facing trade now the tariffs and that decision last week, the largest arbitration decision given up to $75 billion worth of tariffs on the eu i've got a guest with me the director of international relations at business europe i'll take you back to the decision i just spoke about with regards to the airbus subsidies by the wto are you worried this will be a precursor for a trade war now? >> it was based on a legitimate decision and rules the question now is what can the eu do to make sure it complies with the rules and that the duties that are about to be

imposed on european imports will be released. we hope that opens the door. i think that is the main objective. >> if, say, the u.s. were in a month's time to make a decision on tariffs and auto industry >> talking about topics. eu has disputed boeing i say probably five/six months down the road. if indeed losing panel on the eu will impose duties on its own on u.s. products. hopefully we'll have a deal that will solve this dispute. the cars is a different topic.

we still think european cars are not the threat to national security this is a decision based on u.s. rules. in our view these rules are not clien compliant. we don't think new cars should be subject to duties >> wto has advised down their out look to around 1% to 2%. do you think wto bares some responsibility to allow the environment to get so bad and so tense and should have done something earlier to stop it getting to this stage? >> the wto has more than 160 members. it is a very complex organization decisions are taken by

consensus. one country can actually block the decision we must decide what decision is best this is what we are now trying to think of ways to reform the organization making it more effective. we have rules that were adjusted just mentioning about trade, climate trade. all of these are new challenges. wto might not be able to cope with the current rules we need to talk about reform it is important we keep the system we need multilateral rules otherwise it will be the law of the jungle even decreasing trade and investment >> i want to turn your attention to investment and trade and take your measure on recent events. donald tusk has accused a blame

game what is your take? is. >> the take from business is clear. we want a deal we think no deal is the worst possible scenario. it will create disruption both in u 27 as well as uk. we have been urging both sides to find a compromise but for the european community, it is important we have these things one of them is the single market we are still confident a deal is possible and that we have an orderly exit of uk from the eu >> you represent and speak to all of these european businesses are they prepared for the worse case scenario? a no deal brexit

>> i would say a lot of them are prepared as they can be. that does not mean they will not suffer consequences or disruptions. there are still a number of uncertainties. those will impact how prepared% you can be prepared does not mean it is not going to be a negative impact. >> thank you, the international director of business europe. as we spoke about many of the issues hanging over the conference whether subsidies, tariffs, the trade war i'll put all of those questions to roberto azeveto when i speak to him in about an half hour's time >> join us on cnbc to see what is going on. tweet me directly @cnbc.juliana.

lvmh and the latest head winds more after the break

>> welcome back to "street signs. lvmh posted better than expected luxury group u.s. and european markets made good progress. taking a look at lvmh shares traded up more than 4.5% overall luxury getting a nice boost across the board we are seeing pretty decent gains carrying on beyond lvmh. more on these results. it looks like a strong set of results. >> it is the world's largest group to see how the whole

sector to give us a hint the organic revenue growth at 11%. a great relief for analysts for the sector there specifically on divisions, fashion and leather goods are particularly well. that is the lion share of that revenue. that did extremely well. it was up 19% against a forecast of 15% louis vuitton bags still doing very well. other divisions. one in spirit also doing well with a premium brand of cognac in the u.s. doing well

bvulgari also doing well the only slightly more concerning one was selective retailing that was up 4% here, we see the hong kong effect sephora just came back to the hong kong market and the duty free shop hong kong is about 5% of all luxury purchases in the world. that duty free store has been impacted in the statement. overall, they are saying the geograph call variety in u.s. and europe doing well to set off some of the hong kong protests there is a conference call this afternoon at 3:00 p.m. paris time there will be more discussion on the hong kong effect and whether it is main land china or how

japan has been doing a good set of results. a lot of their luxury stocks up on the back of this. >> thank you for breaking that down state right there. we'll bring in someone who has a view on the sector thank you for joining us quite a strong share price reaction from lvmh as well as the stronger luxury sector this morning. >> i think what is reassuring is the capacity of lvmh to sustain growth despite the challenging environment and tougher times in the u.s. i think the group is tripping

the brand. >> we saw overall asia would grow i'm curious touch was the negative offset by stronger demand in major china. >> we don't yet have the figures but we suspect that u.s. may be stronger and offset part of the pressure in hong kong. japan would make it a stronger threat coming. i think what is specific to lvmh is that demand exceed supply and that the group would better with demand. though the group has vested heavily in digital

communication. also is a driver of demand for its strength >> we see all the luxury up on the back of those results. is this specific lvmh strengths. we know the variety with different brands and sectors make it resilient. >> it is difficult we have different situation. hermes is maybe the closest. thanks to very exclusively made. we expect 12 or so percent carring is in the rate for gucci

still at 8% of the market. the market expects gucci to grow facing a tough face of comparison, the brand was growing at 25% carring is in a situation of normalization of gucci brand or carrying what is attractive at the 12-month earning that is lvhm with the standard 22 times worth of earnings >> stepping back in terms of your preference, do you like more dominant players or the smaller brands >> it is clear today that the bigger brands, the larger group have the financial means to vest in digitals, in the remodelling

of the store network the bigger brands are able to deliver faster growth rate and are better equipped to post more resilient growth rate in a slowing environment. >> lvmh said in a statement, they continue to be vigilant some analysts say that this run these sectors had may have reached a peek what is your view on that? is. >> i think you always have cyclical elements in luxury. for the past few years, they have more valuable elements in the base

they have vested beyond their brands and will be in a better position to slow down the reason passed today as a good example of the good resilience of their performance. >> thank you for joining us this morning. thank you charlotte for joining us coming up, eurozone finance ministers agree on budget. more coming up next.

>> welcome back to "street signs. i'm julianna tatelbaum these are your headlines philips shares plunge. european markets turn positive after china calls on the u.s. to, quote, stop putting undue pressure on chinese companies.

lvmh sets a trend after third quarter earnings sparks a rally. easing concerns over the impact of unrest in hong kong eurozone finance ministers agree. euro group president tells cnbc the new package aimed at supporting the euro is now ready to go. >> this will be at the corner of the financing of the eurozone today and in the future. an instrument has been created sos it fully operational this is the important thing. we've got a raft of uk data just hitting the tape now let's kick off with the uk gdp grew 3% versus the three-month in august. we are looking at minus 0.1%

month-on-month that's the first fall since april. in terms of year-on year that grew other data we are getting come through industrial output. that came in at minus 0.6%, significantly worse than the market had been expecting. the year-on-year figure came in 0.8% on the manufacturing front, that came in at 0.7% versus flat. so negative numbers there on the industrial and manufacturing output fronts. gdp out look on track for a

recession. in terms of trade, the august goods trade balance came in at negative 9.8 that was a touch better than expected looking at $10 billion. in terms of total goods and services that came in at 1.56 billion revised sterling coming in positive against the dollar up.2% it looks like a mixed bag putting it together. the gdp some what backward looking and the industrial outlook figures. we'll keep an eye on the sterling versus the dollar currently holding steady at 0.23

higher let's look at the markets. we have seen markets turn positive in the last minute. the ftse is up .04%. the dax is up .22% lvmh is providing a boost. italy lagging down a touch the message clearly, things have turned more positive for global investors with the u.s./china trade talks. the europe oeuro up much stronger investors digesting that new data we got with the weaker industrial manufacturing data but slightly stronger gdp data

up .03%. we are looking at a marginally weak start to u.s. trade yesterday, we saw the rebound led by technology. we had those fed minutes come through. over 24 hours, we had conflicting messages that is certainly a focal point as the day progresses. let's focus on the eurozone. finance ministers had struck a deal on the budget also agreeing on the set of reforms that had come into place in 2021. asking whether the budget will have the necessary impact. >> i think the most important issue coming out of yesterday's decision is that we have an operational instrument

we have to decide up to the size that is up to the leader to make that decision. we have to continue the discussion on adding external sign revenue, resources to this instrument this will be at the core of the financing of the eurozone today and in the future. the instrument has been created. so it is fully operational this is the important thing. >> also warning of the potential fall out from a no-deal brexit >> well, the work we do on that file must be all directed towards having a deal. if it is by the 31st of october, okay if it is after, it is okay as well as long as we have a deal. no deal is a thing that we have to avoid at all times now and in

the future so this is the biggest risk we face it is a huge political risk that has huge consequences. we need to be aware of that. willem joins us from luxembourg. thank you for bringing us that interview. i believe you are now with another voice to weigh in on what's going on there. >> that is right i'm joined by the ceo of luxembourg finance we heard from the euro group president about the risk of a no-deal brexit from your perspective, you've had a long time to prepare do you think finance companies here in luxembourg are ready if that happens >> i think the entire final industry is well prepared for a no-deal brexit because that is

exactly what they have began to prepare for. they were hoping for a better result they did prepare for the worse that is a no-deal scenario we are not sure where we are going. we are three weeks away from the deadline it seems to be going to the direction of a no-deal scenario. you have seen many institutions announcing relocating to paris, amsterdam, dublin and others the real question is what happens after a no-deal brexit that will show a no-deal brexit is not even a real scenario. days, weeks, months after, somebody will have to get on a train from london to brussels and restart those discussions about a future relationship.

it is inconceivable whether finance or others not to have relationships with the uk and european union single market anybody who thinks that lives in a parallel universe. >> we hear a lot about the consequences of trade and what might need to be done. we hear the consequences of border what do financial institutions here, what do they say in terms of a no-deal brexit, once those talks as you mention resume. >> what those financial institutions have done is set up alternative structures on the european continent you saw a lot of reports on investment banking going on frankfort or paris payments going to amsterdam or

dublin what we want to see after this has come to a term is discussions on how the city can still partner with the european union. there was discussions of enhanced equivalents not sure how this will play out. it is all a question of the political climate. >> clearly, this is a priority for financial institutions do you think this is still anywhere near the top of the agenda >> it is still among the top issues if you asked any leaders in france and germany and probably luxembourg and other countries, it is one among many issues. what we see is in the uk, it seems to be all-consuming, yes >> let's talk about brexit in the past

let's talk about a universe where we don't have to talk about it anymore it is a road bump in the mirror. what mountains do you have to climb? >> once brexit is an operational issue. there is very much transformation for the industry, that is digitalization that will really change the way that financial services will be delivered to customers then there is another issue which is fougnot only transformational but ex sten shal these are issues we have to tackle in the month and years to come >> barely a week goes by where i don't see an email come out about this bank looking to consolidate with this bank

do your members and other banks give you the sense that that is part of that quest >> i think if you look at it since the financial crisis, a lot has changed in financial industry fees have gone down, costs have goneup if you want to be efficient, you need to pull your resources and consolidate. that's what we see happening >> we had this result where all of the finance ministers met we agreed on the budget instruments. part of the money not yet determined how large that pot will be to try and help the economies when there is a down turn we are seeing signs of data that things are not progressing in a particular positive way from the

perspective of the financial sector do they think the government has done enough to prepare for the next down turn >> if you ask any industry, they will always say, no. more needs to be done. there is always the question of politics the much larger factor indeed of trade politics what we now need to see with the new commission taking off soon is the drive to push this agenda to help create growth in the real economy and finance services >> we'll leave it there. making a point that at a time of

political transition and a moment for the financial industry as well >> also speaking to the german finance minister earlier he said the eu must show it worked hard to reach a brexit deal >> it is absolutely necessary everyone understands there is a common responsibility to act in organizing the agreement between the united kingdom and european union which has not been adopted by the british parliament. i hope on the last meeting will be a solution that follows the lines. anyone knows that this does not work if it has any effect on the single market on the customs union.

we all know that the peace and island is the top priority, the friday agreement should be endanger and should be key for anyone >> meanwhile, he believes governments and businesses already if a brexit agreement cannot be sealed >> our government, i would say most governments probably most companies corporate now are as prepared as they could have been, even for a no-deal brexit it is the base-line scenario now probably makes brexit less of a risk than it was a year or two if an event doesn't have the sense of of crisis or something

we more or less see it coming and we are ready for it. prepared for it. it doesn't mean it is not a negative development but may not be as bad as it could have been a year ago or two. >> for more from luxembourg and a growing frustration over the ongoing brexit dead lock, head on line to cnbc.com. >> ecb president ignored advise not to start the central bank fund sources say draghi received a letter from the policy committee members urging him not to resume the bond purchases there you can see, the euro is rallying strongly against the dollar perhaps this suggests that madam lagarde when she takes over will face pressure to abandon

draghi's policy of further easing given where rates are already. if you were planning to watch rugby on saturday morning, i'm afraid i have bad news england's match with france has been canceled due to the typhoon hagibis. also new zealand against italy is canceled. according to tournament rules, a canceled game is recorded as a 0-0 draw that means england would go through with france in second place. a crucial clash between scotland and japan remains effective.

coming up, no blackmail. ukraine president speaks out about a controversial phone call with donald trump. more after the break

>> welcome back to "street signs. bp ceo has criticized signs to halt the growth of gas >> with the world turning its back on nuclear, there is no way we can get there without gas moving co moving coal out of the equation. my goodness, we are going to need 40% more energy you can't get there without gas. then hydrogen down the road. >> gas is being demonized. i may misquote you you said people mean well when they attack gas in the same way

they attacked coal you named people out there, including a philanthropy who vested half a billion. why did you say he's miss guided >> i think he's irresponsible. we have got to reduce emissions going forward. the best way to do it is make gas clean. i don't know how the numbers get there. >> let's switch gears and talk about the latest when it comes to the impeachment hearings saying the u.s. counter part president trump did not blackmail him. president trump is facing impeachment proceedings over a

claim that he threatened to withhold aid zelensky added he didn't want to interfere. meanwhile, joe biden has struck back publicly calling for his impeachment for the first time >> mr. vice president, what was the breaking point for you >> for the first time, joe biden issuing a call for president trump's impeachment. >> he should be impeached. he's shooting holes in the constitution we cannot let him get away with it >> the strongest statement yet as president trump late tonight fires back >> so biden is dropping like a rock i don't think he's going to make it he's no longer the front runner. >> top of mind from the campaign trail to the capital after declaring the

administration will not cooperate with what he sees as the inquiry. the president suggesting he might change his mind if democrats give republicans more of a say. >> if they give us our rights. if they vote and say you can't have lawyers or anybody president epresent. all of these crazy things. it is the most unfair situation. >> speaker nancy pelosi is not planning a vote. >> why is she planning a vote? that to me, is impeachment >> it won't work they are going to stone wall anyway >> the president attacking the whistleblower whose complaints sparked the whole thing. >> the whole thing is a scam, a fix. >> the whistleblower's attorney

says he has never worked for a campaign the allegations still appeared credible >> that was hallie jackson reporting. turkey has begun its incursion. the un security council set to hold an emergency meeting to discuss the situation. richard engel has more on the turkish operation. >> reporter: the bombing began in the afternoon smoke rising overbroader towns buildings on fire. turkish jets began striking the allies after president trump ordered u.s. troops to step aside essentially giving turkey the go ahead the turkish president announcing on twitter saying it was to

neutralize terror threats. but a spokesman said turkey is targeting civilian areas there is a huge panic. this video showing people desperately trying to evacuate president trump showing huge backlash in response threatening if turkey goes too far today, the president tweeting we are slowly and carefully bringing our great soldiers home >> we are speaking to both sides to see what can be made in the situation. we have no soldiers in the area. we are getting out of endless wars >> that does not stop condemnation >> if we pull out, the kurds are in a world of hurt, isis is back and president trump will own it. >> feeling strongly with what is going on, orders not to help the

kurds. losing 11,000 of their men and women. fears about these detention camps, holding tens of thousands of isis supporters with kurdish groups running to the front lines. >> isis fighters pose a threat elsewhere. >> they want to go to europe >> they feel the united states is betraying an ally breaking a sacred trust forged in battle. reporting from istanbul. that's it for today's show i'm julianna tatelbaum "worldwide exchange" is up next.

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it is 5:00 am here conflicting reports over u.s./china trade talks caving to pressure the latest big company bouing to beijing. to infinity and beyond shares up soaring after announcing big changes at the top. trading wars not trade. trading wars resume after on line brokers cutting commissions

to