i'll never be the same after this. happy friday welcome to "street signs." i'm joumanna bercetche >> i'm julianna tatelbaum. these are your headlines >> prices jump as a tanker is said to have been hit by miss i'lls. >> high-level talks get underway and president trump will meet with chinese vice premier today.

>> we just met with china. we are doing very well i'm meeting with the vice premier at the white house i think it is going really well. >> sap shares surge. co-ceo tells cnbc mcdermott believes now is time for change at the top >> other than thinking about handing over the reigns and going through transition in the beginning of the year, he felt now is the appropriate time to come out we had a great strong quarter. >> hugo boss cuts its out look for the second time. puwlicis is also at its lowest since july 2012.

>> a warm welcome to "street signs. let's kick off with a fresh report from the iea. they have reduced their oil demand estimates for 2019 and 2020 to 100,000 barrels to 1 million barrels a day and 1.2 respectively they lowered these to reflect weaker demand. they also noted that demand for opec they see falling in 2020. >> also comments on supply there. non-opec supply led by iran, brazil and norway to rise to 2.2 million. interesting that they continue to see a ramp upcoming out of non-opec countries there they've made a few comments on the saudi attacks.

they said they put about 6% of oil off line and the largest loss in history rose by 20 million in september >> they said stock draws likely in q 4 even with the swift recovery of output fairly muted again like we've been hearing about the pressures of weakening demand and how that is affecting oil markets >> we'll talk about that report in more detail prices are back. they've jumped following an explosion in an oil tanker we were told the tanker was hit by two explosions, quote, probably by missiles all crewmembers are safe and the

situation is under control we'll go live to tehran. the oil company is saying the fire has been fully put out. do we have more information on what happened this morning >> not a lot there are contrary reports about the fire the fire was contained immediately and working to stabilized situation and saying there on fire on board the ship. the public relationsarm said i was hit by two explosions. they say it is probably a missile attack, which they are calling a terrorist attack they have experts on board now trying to determine exactly what was the cause of the attack and

where it came from as you mentioned, it happened about 60 miles off the coast of the port city in the red sea iranians also say there was a spill into the ocean and they were working to contain that spill to make sure there isn't any further environmental damage this is going to spark tensions further. we've seen all of those attacks on tankers in these troubled waters now we are seeing an iranian tanker hit it is going to be interesting to see who they will blame. there is a small pool of people they'll point their finger out it may be saudi arabia or yemen people this will probably unfold for coming hours or days we'll have to see the coming reaction it will make a troubled region

more unstable and will probably make oil prices spike a little bit that had settled a little after iranians and saudis walked back a lot of the war-like rhetoric after the attacks there were even talks of the saudis and iranians may have talks between mediators that want to see the tensions lowered down if they want to be blamed by this, the tensions will be high again. >> being set today in the price of oil thank you for bringing us the latest i want to get to neil atkinson, the head of the division in the iea. this morning, we've been scratching our heads wondering

why brent is strtrading at $60 clearly, they brought production back on line quickly we continue to see these type of attacks on vessels on the facilities last month, why do you think the market is struggling so much >> as we say in the report we publish, although the region remains volatile and the attacks on saudi arabia were extremely serious. once the initial disruption was contained and business as usual in the report. the market cut the fundamentals. the oil market remains fundamentally supplied we have very high levels of

stops. in terms of the fundamental market disruptions have been relatively limited >> just looking at the report, you see stock draws despite that quick recovery presumably those are stock draws from opec as a whole >> the stocks, it is an implied stock draw we have seen in the latter supply for a short period. as we said last month, it is temporary. a big increase of supply we've seen from norway and united states that means we get back to a market which is very well supplied for the whole of 2018, 2019 apart from this current period we get back to the fact that oil

prices, likely short of the incident to remain under pressure for some time to come >> neil, let's talk about your demand side. give us a little color around what has driven this how much is driven by this trade war that is ongoing. >> the large part of the 2019 reduction is technical to some extent it reflects trade tensions impacting on global trade. the global economic music is not as nice as it had been previously we made a modest reduction looking in 2020, the latest out look that was published a couple of weeks ago

it doesn't look like they are reflecting weaker growth in 2020 that growth still remains 1.2 million a day. that remains fairly robust. >> what kind of upside are we going to see here? >> we can't speculate on how much oil prices might move up or down depending on specific events all we have to watch is news from the trade talks will other economic concerns such as an impact from brexit and wider concerns about the

struggling economies for example germany. there are other factors to take into account here. it is difficult to know what the picture will look like we'll stick with the number of about 1.2 million a day through next year. we'll review that as new data comes in and as the picture gets clearer. something that comes to mind with oil prices. after the latest incident, they are trading roughly 25 to 30% below the levels we saw. that is a major benefit to consumers around the world we shouldn't underestimate the impact of that >> thank you for that. ending that conversation, talking about the possibility of progress on the trade talks.

we did have day one of those trade talks yesterday. president trump saying we had a very, very good negotiation to china. that gave a boost to markets all of the majors up apple and caterpillar, some of the names with the most positive impact 10 out of 11 s&p sectors ended up yesterday as well out of wall street, that was positive we saw that japanese equities up, anikkei up. a lot more positive in european market the stoxx 600 trading up .8% that is the narrative when it comes to the trade talks we've got day two.

some optimism of a low-hanging fruit deal particularly, i want to start with the ftse 100. we may be looking at a brexit breakthrough we'll talk about that. yesterday, we saw a big spike in the currency of the pound coming up close to 1.25 the ftse 100 negatively correlated showing a lot of names that have exposure to brexit are trading firmly in the green today. some of those names are trading right at the top of the ftse 100 there. the dax having a strong start, up 1.25% the sap ceo stepping down. that stock is up cac is up about .5%.

let's talk sectors and in tech, clearly sap is driving that a lot of the positivity around the trade talks there. banks up 1.2%. we see gains there, rbs, barclays at the top. oil and gas because we are seeing a spike on the back of the attacks of the iranian vessel overnight we are seeing oil and gas up overnight. household goods and luxury struggling one name in particular, hugo boss with weak earnings there. exposure to hong kong. in media at the bottom, a french media company, disappointing out look for the year.

that's the whole picture solid end of the week this friday morning thank you for that update. very, very good negotiation is how president trump describes day one of the trade talks between chinese officials in washington he is now scheduled to meet with the chinese premier tonight amid optimism that the two sides can come to an agreement to avoid more tariff talks next week. >> reporter: the vice premier will head to the white house tonight. they'll have a face-to-face, raising hopes that tariffs for next tuesday and the trade war will be put on hold. this is what president trump said >> we just completed a negotiation with china, we are doing very well. we have another one tomorrow i'm meeting with the vice

premier at the white house i think it is going really well, i will say i think it is going really well. we had a very, very good negotiation with with china. they are basically wrapping it up we are going to see them tomorrow right here. it is going very well. >> reporter: heads of the u.s. chamber of commerce and business council met and said they were hopeful for so-called early harvest agreements state news agent stated china is willing to face an agreement on matters both sides care about. that tone contrasts with the overarching effort in the chinese press to down play the talks. coming at a time when the level of drama in business relationship is especially high. the standoff with the nba and

chinese dispute. criticism on chinese social media has been fierce with users calling the fans lackies the turn out could be a relief for the nba that it is retaining at least part of its chinese fan base >> going now to the professor joining us from singapore. if you take president trump at his word very, very good negotiation. are you buying it? are we likely to see some kind of a deal come out of these talks? >> i'm not so optimistic we've seen this play before that there is talk of some progress, some minor concessions, the markets see a sigh of relief but

then along comes a tweet and then the trade talks collapse. it is useful to think about how far we've come a couple of years ago, the tariffs were about 3%. today they are close to 26%. if the chinese go ahead with the next round of tariff escalation scheduled for the 15th, they are also focused on 26%. i am less optimistic on the markets today. >> it is near impossible to guess what comes next for the president, do you think it is in the interest for the trade war to keep going as he heads into the reelection campaign. >> it is a very good question. it seems impossible to separate out the politics to this

things happening simultaneously. you have incentives to act tough on television, take a hawkish stance on china. this is going to increase the risk of the trade war. we have seen the impeachment inquiry on president trump on live television, he asked them to investigate. the chinese have pledged to stay away from this because they see this as risk and no reward they'll interact with trade talks in very unfor seeable ways >> you seem negative in terms of a possible trade deal. i will bring you some evidence that china are actually buying more products. the usda is reporting large sales of soybeans and pork to

china in the run up to these meetings do you not think there is perhaps a limited scope for a deal that is not all encompassing but maybe hits some key points and some deal on the currency side of things as well? >> so this is interesting that this trade war is not really about china buying soybeans and oil and gas. it has to do with technology and technology transfers and subsidies. all these issues form the china 2025 plan. u.s. has to figure out how this will tackle the core issues but even if they come to an agreement as to how they are going to implement it. are the americans going to use

tariffs to force the chinese to step away from the development strategy and actually make real changes. there is still a massive amount of uncertainty still we think there is best case scenario. that would be a big improvement where from things stand today. >> we'll leave it there. thank you for taking the time to chat rates for super tankers have surged because of lower supply of key vessels the giant cosco has severely declined in those available. the prices have tripped to nearly $140,000 in recent weeks. we'll take a short break

coming up, hugo boss cuts its outlook as hong kong protests weigh on the german fashion brand. (client's voice) remember that degree you got in taxation?

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welcome tack to "street signs. sap has rushed out third quarter results and announced bill mcdermott is stepping down as ceo. the software group says it is on track to provide more stream line service following the entry of activist investor elliott the placement of new ceos. the pair said they will continue to follow their predecessor's growth plan. >> other than thinking of kind of handing over the reigns at the beginning of the year, which is our busiest time, he felt now was the appropriate time to come o out. we had a great strong quarter.

>> jennifer and i will continue the successful path that bill as ceo has already outlined we are heading to q 4 where all of our focus will weigh in jennifer and i will share more plans about how we are heading sap into the future. >> you can catch an episode of the brave ones with bill mcdermott tonight at 20:30 cet >> elsewhere, cutting targets. the advertising company suffered a drop in spending by u.s. clients and digital business also underperformed. piling more pressure publicis shares are down this morning.

>> hugo boss shas slashed the 2019 earnings forecast blaming weak demands in united states and hong kong hugo boss said the environment deteriorated in north america and amid the hong kong unrest. >> quite an interesting update given the strength we saw from lvmh >> a lot of polarization to the luxury sector with how much exposure they have in hong kong. >> indeed, we'll take a break. the pressure on donald trump rises as pressure in northern syria enters its third day more when we return.

>> welcome to "street signs. i'm julianna tatelbaum >> and i'm joumanna bercetche. these are your headlines

>> oil prices jump as it is said a tanker was probably hit by missiles causing two explosions trade optimism as president trump meets with chinese vice premier today. >> we just completed a negotiation with china we are doing very well we have another one tomorrow i'm meeting with the vice premier over at the white house. i think it is going really well. >> sap shares surge after bill mcdermott steps down new co-ceo tells cnbc now is the right time to make a change at the top. >> other than handing over the reigns at the beginning of the year, which is really our busiest time he felt now is the a proeppropre

time to come out and change. hugo boss coming out with the worst levels in years and publicis with lowest levels since 2012 well that trade deal optimism that helped to lift u.s. markets yesterday has filtered through today in particular, in germany, the dax is higher up about 1.4%. this morning, the german index is getting a particular boost from s&p at the top. the change at the top coming through early hours. across the board, we are seeing green. president trump offering a very strong review of talks saying very, very good negotiation.

a lot remains to be seen in terms of progress. the mood is up beat. the ftse 100 looking across the board now trading in positive territory. we did see some losses that did come on back of a rally in sterling looking at the trades now versus the dollar we are seeing continued gains and sterling trading above 134 after the irish prime minister met with boris johnson and came out of that meeting striking an extremely up beat tone relative to what we heard suggesting he does see a path way to a deal after that meeting we'll get to the detail of what may be occurring euro higher versus the dollar. looking at the futures that trade deal optimism

providing for support. we'll see the gains continue the dow looking at a more than 200-point jump pushing higher oil is up after a report of the explosion of the iranian tanker. plenty of support to markets this morning >> turkey's incursion into syria today is stepped up, forcing tens of thousands of people to flee the offensive has caused condemnation and president trump is facing criticism at home over his decision to withdraw troops. at a rally last night, the president once again defended the move >> we were supposed to be in syria 30 days. we've now been there 10 years. we are now going to be in

afghanistan close to 19 years. it is time to bring them home. it is time to bring them home. [ applause ] >> let's get out to nbc's bill neely. what has been the reaction on the ground >> reporter: the un now says 70,000 civilians have fled 60,000 in the first day. i think with jets in the area overnight, it is safe to assume those numbers will prize the turkish defense ministry says 49 militants were killed overnight bringing the total of militants killed to 277. we cannot confirm those figures.

wide-spread shock across the region at the speed of this offensive and the already rising death toll turkey, by the way, has reported its first soldier killed the turkish ministry is the most powerful in nato the kurds were only ever given small arms by the u.s. there is little doubt they will simply sweep through this so-called safe zone they want to create it will take days and probably weaks. president erdogan is gaining ground but not friends it has to be said, the un security council failed to pass any resolution asking for sanctions or demanding that the offensive should stop. president trump is not demanding

an immediate stop to the offensive. interestingly, a senior u.s. state department official did for the first time spell out, if you like the red lines, after which the u.s. would take action, by action, he meant financial and economic action. he said if there was clear evidence of ethnic cleansing and second clear evidence of bombing of civilian areas, then the u.s. would take financial measures. turkey said if you do that, we will retaliate it is clear we have the beginning of ethnic cleansing in that area. that's what president erdogan wants to do. he wants to replace the turks with the refugees in the area. it's unclear at what point the u.s. might step in

>> thank you for the latest there. bill neely from nbc news breaking news just hitting the wire around renault. the board has voted in favor of ousting bollore as ceo there was a report that the chairman wanted to replace the ceo. thierry bollore talked about this attempt to replace him as a coupe. they say the board has voted in favor of replacing him he came this role after the carl carl carl carlos saga last year. >> picking up from our colleague

bill neely what is president erdogan trying to achieve >> doe domestically, there is a last of advantage. a lot there will look fairly favorable. supporting the pkk, the kurdish group. they see the political presence as a threat to turkey security >> where is bash aall of this? the kurdish groups in the northern part of the country what does turkish incursion

mean >> it weakens defensives in saria. assad still intends to assert control overall of syria this means there is potential to move on kurdish positions. we have no indications of this as of yet. >> you think it emboldens presidehim? >> it could. we haven't seen anything yet >> president trump tweeted about the options for the u.s. and how this situation unfolds from here he remarks, he hopes they can mediate a deal between turkey and the kurds. is that realistic? >> it is, yes. fairly real is take.

they still do rely on support from the u.s we've seen a discrepancy between what the u.s. says publicly and what goes on behind closed doors. turkly is going to need support to go if they want to take separation further >> in terms of other voices from the united states, you mention the difference of what is being said privately and publicly. there is a group of republicans seeking sanctions on turkey. do you see sanctions coming through and what kind of magnitude are we looking at? >> that is the big question for turkey, what kind of sanctions are coming if, when, how big according to senator lindsey graham, our assessment to get the green light from the white house to go through.

our assessment is less likely but it will probably embolden the house to go through with respect to russia according to the due sanctions act. at some point, the presidency is playing for time as to how to implement this at some time, they will likely pose sanctions of some sort. >> just now, we are getting some comments out of the turkish prime minister saying he's reiterating that the alliance will show strong solidarity with the nation that they should expect to see loyalty out of nato but the language coming out of their allies is remarkably different >> absolutely. it is worth baring in mind that the u.s. public has reacted more

negatively to this move than the trump administration might have expected some of this might be because of trying to mitigate reaction from the u.s. side. nato countries will want to distance themselves especially if there is negative press what they can actually do, not so much potentially. >> george, thank you for speaking to us and running us through a very complex situation. the other big story we've been monitoring, that of the trade talks between u.s. and china we are just getting some is flashes now out of the chinese security regulator saying that they will scrap ownership the regulate yr said it will scrap ownership of ownership of mutual fund in spring of next year and

limits on foreign ownership of future companies will be scrapped as of january 1, 2020 so this is in line of some other positive signs that have been picked up by the market. indeed here, is one concession on part of the chinese saying they are looking to scrap some of the foreign ownership restrictions they had previously put on their companies so opening up to the rest of the world. >> fascinating pushing on, another story we are watching here in the uk. brexit sterling catapults after a positive meeting the pair spoke on a walk on the grounds of an english manor. there is significant progress for discussions to resume in brussels >> i had a very good meeting

today with the prime minister. very positive, very promising. i am convinced that both want there to be an agreement in the interest of ireland and the united kingdom and europe as a whole. i do see a path way towards an agreement in the coming weeks. >> the new-found optimism comes amid a crucial week for brexit with the queen's speech on monday, last chance on thursday and friday and a special sitting in parliament on saturday. willem joins us around the desk. what might have happened in yesterday's meeting to strike such a different tone? >> the question i asked to both british and irish officials. both say these are live discussions we are not going to give you deal tails. what they both said, particularly the irish, leo

looked at boris johnson in the eyes and said, i can now trust this prime minister despite all of the talk coming out of the group talking about ireland being the problem, the germans being an obstacle. this seems to be a meeting where the two leaders saw eye-to-eye interesting to note is time lines. the british want to see all of that done before the meeting next year, he talked about this being weeks rather than days talking to one of his officials that there has been many a twichl, slip, cut and there are flocks of black swans out there. >> speaking of a black swan, we are just getting comments from

donald tusk. saying unfortunately, the uk has not come forward with realistic and workable proposals he says if there is no such proposal by today, i will announce there is no such deal for a submit he said i have received promising signals from the irish prime minister that a deal is possible and even the slightest chance must be used. there is no guarantee and time is basically up. i think that language seems to represent the broader thinking of the eu here probably falling into the trap that he was talking on behalf of the eu, it seems like they are not convinced the two sides are enough to get them to a deal >> everyone has said, if the irish are happy, we'll be happy. the irish will not take a

position on single market that the rest of europe are happy with but if the irish are happy with the rest of the deals there, they'll make it work. in terms of next week, the leaders like to have everything squared away, all the fine details laid out what is happening here, that is not being done that's why you have people like donald tusk who will have to chair that meeting and steer those meetings and not happy this will all be done so last minute >> very exciting week for you. look forward to your coverage. reporting there on brexit. coming up on the show, cleveland fed president thinks the u.s. will avoid a serious downturn find out why, next

>> welcome back to the show. the u.s. will probably avoid a, quote, serious downturn according to fed's mester.

like other fed officials and investors is keeping an eye on the health of the u.s. consumer. >> you've got a solid consumer sector where wages are going up. >> the consumer side is holding up >> the consumer side is well >> that could continue to drive the economy. >> the u.s. has been relying on the u.s. consumer, the entire world has been relying on the u.s. consumer. >> bringing in our guest, to pick up on mester's comments here that the u.s. will avoid a downturn, do you agree with her optimism >> we do yes, there are reasons to be concerned of a recession the yield curve is a little

flat and the manufacturing portion could be a slight contraction. if you look at the smaller data on the side of growth. consumer keeps spending and housing sector picks up when you look at things like new home or housing sales as well. these are reasons why the economy continues to grow. >> growing this week, two days of recent gains for wall street, what do you think is being priced in here in terms of trade talks? >> we do think the recent move in stocks is related to the trade talks and optimism that there could be some sort of short-term deal reached ahead of the next tariffs that will be ratcheted up we think this is right in line with president trump's playbook.

he wants to be ahead but if he's too punitive, he risks tipping the u.s. economy into recession. some punitive retractions in exchange ofpunitive actions to the chinese. >> taking to another decision made by the fed, they announce they are expanding the balance sheet, just adjusting liquidity. is that a positive signal to markets, do you think? >> i do. so there is some concern before the fed acted, we were seeing these issues in the repo market basically that amount of reserves were too low. so to take that tail risk off the table. that will probably give a little

cushion. we'll hear about that when the fed speaks to us next. ultimately, we think this is a minor positive for markets >> jason, thank you for giving us your thoughts senior portfolio manager i want to give you fresh news on renault. we have confirmation now that they have decided to end the mandate of bollore as ceo. they've named delbos for an interim period for a period. they gave a favor opinion on the new deputy managing director to assist flagging that the chairman will assume the presidency of renault

during this interim period >> a lot of turnover it seems like anyone closely related to ghosn is being replaced by new faces. >> indeed there. and we have seen positive reaction to this news. that is currently up about 2.8%. let's look at u.s. futures and how we are setting up for wall street session. it looks like that positive m momentum will continue >> a lot of positive feelings in e air. >> "worldwide exchange" is next.

it is 5:00 at global cnbc headquarters breaking news out of the middle east an apparent explosion sending crude prices soaring the president putting rose colored glasses on the trade talks. he prepares for his own face-to-face today and the uaw strike enters the 26th day end of an era, the ceo of one of the largest ft