ew th batecause i told her every day when she was here. [theme music] europe are opening for a brand new trading month. after a pretty decent month for some of the quarter, what lies ahead. looking last year at 2018, a couple of volatile months transpired we climbed towards the highs the question is whether we'll have more rotation or gains

which would take us towards more record levels as investors eye in the beginning trading about a third of a percent. we did have an unexpected bounce in chinese manufacturing activity this is helping some of the asian markets. some of the data has been showing a fairly bleak picture in contrast to the numbers today. add in a bit of a risk investors might be caution across the european trading session. at the start of the session is banks at the bottom. basic resources. we look at the banks a number are reporting from the sector today insurance and profits crossing over the course of this week the sector trade tie almost a third of a percent it is a sweep into the green at

the start of this session. health care which has been stunning through many of this through october. up by.2% telco is up .2%. we waited out a phase one trade deal to be inked in coming weeks. oil and gas bounce half a percent. the china story seems to be supportive for these two areas of the stock market today. let's take a look at the indices. october was a month of former brexit developments leading us down the path of another general election during that time, we are seeing a general stock market in the european union. the stock market down more than 2% for the month

as we start to move in november, we'll see that on the board. the other one that is very interesting has been a german stock market seeing whether the german economy would be in a recession. the dax had a fairly stunning recovery story in contrast to the ftse up 3.5%. all of that with brexit trade wars and macrostory. we start out 12,922 on the boards i want to take you to the auto sector we've been following the events around two big companies in the space. french and italian unions are everythi everythi everything peugeot and chrysler

in a merger of equals. psa said they did not contact them before the negotiation began. interesting conversation as you expect the market to be informed first fiat chris lore tracking down 1.2% double digits. look at the rest of the space for other automakers in the green, you can see the contrast the chinese very supportive for this volkswagen is up ferrari is up. they've had a strong run this year .8 higher in this session. looking at steel companies in europe u.s. steel posted a smaller

boost. saying results were boosted with higher than anticipated flat road shipments you can see they are trading up as well. i want to take you to danske bank the stock continues to slide 3.2% it has narrowed the profit outlook. under pressure from lower interest rates and increased cost unveiling plans for the scandal that stemmed from the astonia branch with that scandal still

unfolding. three-month picture has been weaker by 7.7% the czech investor has boosted his stake in metro the fund failed to take over the german wholesaler. the investment vehicle will hold a 29.99% once the call option is triggered. >> let's bring in our strategist our guest host for today ed, we were discussing for the show the s&p and nasdaq, their best month since june the question now is do they take profit now if they've been a beneficiary. >> one reason why october did

quite so well is that this gap closed one of the reasons we were quite cautious around q 2, q 3 now the question is what happens now if the data is continuing. what the federal reserve have done is the bar is high to raise rates but also to cut rates and to explore whether we need to adjust the policy. that means one of the release valves have been removed we were debating before on the chicago numbers for example are a lot weaker and the market reacted strongly to that what that is showing is that two months ago, all of that happened with the rate expectations in december would have spiked up.

and people to go, don't worry. everything will be okay. the fed is moving slightly away from the market. >> you suggested there that pouil powell really raised the bar does that give a cushion for investors? that's right that was actual talk of the 2021 rate rise that has moved away from the market. if you are someone, we saw a poor single data point they would talk about rate cuts. it is not really what people will be fix ated on in the next week or month. the market transition is what we'll be focused on. it does affect the bonds so far.

>> the dollar is a huge driver of risk. we talk about the dollar strength story for some time the dollar hasn't strengthened that much. the market expectations were and we'll see that carry on falling. we'll see the market converging at this point. i don't think it will be these two strengths that will put these two under pressure but it does give more continuity. >> what does the fed being on hold for the long bond because we are at equal, people are happy to play in it?

>> the message from powell is very much about not really moving the rates anywhere. it is really about a flat curve going forward. in the longer term, some degree of steepenning might be coming through over the longer term it still plays to a steepenning of the curve to go over a dollar >> we were chatting and you were talking about how you are thinking of shifting your position on it basically, you just have to buy into the idea that powell was right and that he has master fully managed to negotiate a midcycle pause and we are going

to see a reacceleration of spending into 2020 where then do you put some of the data points like the chicago number which suggests perhaps otherwise or if we get 85 or lower thousand which indicates job creation isn't as strong as we might have expected how do you deal with those choices? >> there are two out of three. gm and the build was in those numbers. probably also why the market might take the payroll today there are a few distortions coming through those numbers you look at the last time we have gone over the quarter, that would be back to end of 2015, start of 2016.

a lot of these data points are pointing to weakness you have a few numbers on that retail sales unemployment is very low the u.s. as a consumer has got a job and wage prices are going up that is a supportive place for earning. at our basis 77% of the economy as a consumer and that is a positive >> just reviewing the performance. if you look at that, there has been time you've been set up for reversals. i just wonder if we are getting set up what do you think? >> i think this is one of our concerns our view for the last four to six months has been a strategic

overweight on the basis of the fed mismatch as that story becomes more tire. yes, there is a chance of more active volatility. a lot of people are sitting on the sidelines looking, waiting for an entry point when we look through history, that point starts to disappear >> you used the word tire, does that mean a sell off >> no. i think that means a shift they invest in other key differentials. the dollar doesn't send strong signals. that's good enough for that shift to happen. >> i agree >> i think that is positive for risk generally a correction will be driven as we head to next year, i would have thought what we are looking

for. the fed will not want to look like they are capitulating they don't want to be seen as aiding trump heading to next year if he doesn't resolve the trade problems i would say god forbid the things he'll do to make sure he gets reelected because iran remains a chip in his arsenal. the this is a key risk to next year >> if these are one of the things he can influence the fed. >> if it is still in play and the weakness continues in 2020, he's got an electoral problem. >> at one point to deploy ahead

of november 2020 it is probably not quite yet probably sometime in mid-2020. >> i would argue he doesn't need to super charge but keep the consumer happy right now >> we'll pick up the conversation in a moment a couple of stocks to look at. reporting mixed results. operating missed estimates net income beat expectations amid stronger demand for diabetes and other treatments. just talking to the company a short time ago it backed its guidance for 2019. the dutch publisher announced it is expanding the share buy back program to 350 million euros

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welcome back china's manufacturing sector grew as the largest pace the pmi rose to 51.7 the third consecutive month of growth. renewed increase of export business boosted output. new data showed the sector contracted for the sixth straight month the two sides had intended to sign a deal at a summit in chile but the meeting was canceled amid unrest in the area.

we did get a foreign ministry comment from the chinese side earlier suggesting that maccau isn't in the running not a bad destination. many happy years spent in the casino there >> plenty of accommodations there and resorts. >> we'll keep an eye on how that story progresses the ongoing strike growing with just 75,000 jobs expected to have been added to the u.s. economy. 46,000 gm workers have confirmed to be out of work while the strike has impacted suppliers. average earnings are expected to have risen slightly by 0.3%.

in other news in the u.s., forecast pointing to continued contraction. dow jones with a reading of 49.1 but it would still be a third straight month weighed down by ongoing trade tensions, the gm strike and boeing max suspension. we'll get to our guests now. we had a pretty extensive discussion around the fed just before the break one story that isn't getting a lot of light is the impeachment proceedings. is there anything to be concerned about medium term from a markets point of view? >> i think quite a lot of what's gone through over the last 24 hours is about bringing

everything into the public eye, that was one of the criticisms part of that is to start building a bit of political pressure against donald trump. apart from anything else, the actual trial takes place in the senate, the senate as we know is republican controlled. for that to be successful, we need a real smoking gun. that is still not our base case. we think there might be a bit of embarrassment for donald trump coming into 2020 as you know, there is a slight concern it might galvanize some trump support. at the moment, i don't think it is a market worry. >> so a bit of noise right now for the markets. michael, i want to get to you about the indicator and where we

go from here what do you think is going to unlock capex spending. you can't decide where you are going to put plant you want to automate and improve productivity where do i do it those discussions don't happen often. there is no reason why you would wait to see this clarity you don't want to be in an environment where you take a 10 or 15 year investment and squau squaunder from day one from a political perspective, the impeachment issue adds some uncertainty. but it is only going to manifest itself if trump is polling under 30% and they think they need to ditch him. it is their choice and just a

tactical game. i think it comes down to trump's sensitivity. how does he respond to 30% polling numbers. does he go to geopolitics? we cannot forget iran. all we need is one provocative action in iran -- people gave trump a hard time for him not following through on the reaction to iran he's got political action. you see this over and over when you are not popular, create a sense of national crisis trump more than anyone will pull that trigger when we think about the medium term risk, i wouldn't take that off the table until it is clear trump is in a space where he feels confident or indicated that iran isn't going to fall

into that trap i wouldn't take that as a given. i think there are bigger issues there. brexit is going to be irrelevant that is going to add to a meaningful risk as well. >> just the self-help here i get what you you are saying. it has been the way in which the corporates have bolstered their own performance. the apple buy back but companies don't seem reluctant to raise money and to buy back shares. to what extent is this going to be a profit? >> whether it happens in the fourth quarter on the back of three quarters of negative earnings remains to be scene that might be more of a feature of 2020.

the estimate is still for 8.5% if we saw numbers for that, that would be the spur to start buy back programs. increasing leverage and earnings faultering a bit sends a message to the market. i thinks that a good back drop >> interesting we did see second quarter buy backs drop whether that happens or not, we'll have to wait and see >> not a real band-aid for performance. why is that? are investors more laser focused at this point. and profits were the end of the tunnel do you think that switched over to the mainstream companies. >> people are looking at the metrics and the words of what people are saying.

you've had a lot of earnings results where they may have let it beat on revenues and profits. a bit of warm words around 2020. markets have been quite discerning rewarding those that are performing i think part of that is the growing perception that the federal reserve would save everything we are slightly healthier in market and responding to that. overall, that sets a slightly rosier back drop >> it has been an eventful season >> he had mark and brooks mcdonald >> still ahead, another technology giant prepares to wade into the streaming wars we'll have more after the break.

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spirits. halloween celebrations turn sin sister in hong kong. president trump weighs into british politics saying jeremy corbyn would be so bad for the uk danske bank slumps to the bottom of the profits. the money laundering scandal in astonia rolls on as you can see behind me, we are about half an hour into trade on the first day of november. we are coming off a fairly decent month for stocks in

october. stoxx 600 up about 0.4%. this comes on the back of encouraging data for the chinese. the manufacturing pmi showed the manufacturing sector expanded at the fastest pace in two and a half years we have more earnings coming through asia today but the pace is slower than we saw earlier this week. all eyes on the nonfarm payrolls report due out today we have a bit of a bounce for real estate travel and leisure banks trading in the red one stock in there is danske bank dragging down that index.

utilities are lower. this is a bit of a contrast and in particular, utilities outperform danske bank shares out after their results early on pina outperforming nearly 9% they came out with a positive result after the deal. this is the picture after single stock. the overall message is a positive for european stock. let's talk streaming apple tv plus will launch today in the u.s. as they hope to capitalize to direct access to mobil users in an increasingly crowded space. netflix, hulu and others will be joined by disney plus this month and hbo max in 2020.

exciting times for streaming wars who wins apple has the device can it make head roads into this industry when it is a bit of a late comer in a sense? >> you mentioned apple is trying to direct leverage from mobil users. we know from launch, apple will be giving a free year to all new purchases. this is around 180 million to 200 million devices a year they have a huge jon raon ramp w subscribers. you set the scene, this is not going to be a service you pay for. so how do you switch those users

over down the track? >> you are correct down the road, to make sure the huge percentage does convert to a paid subscription. how do you keep an audience, you make great content, preferably with what you can't find anywhere else. apple is operating with a relatively thin volume compared to others. it has 12 months to make a credible argument that now you should start buying $4.99 a month. >> one thing we have gotten to is how recession proof these services will be the question becomes, if we see a down turn, how many of those do we cut?

>> our research indicates in the u.s., households are quite happy to take between three to five on line video services. we are coming to the end of a bull market. i would argue the average american feels relatively wealthy, i should argue if hard times hit the american consumer, perhaps you drop a fourth or fifth least favorite all of these are jockeying around being your first or second favorite. >> to what degree is this a defensive move as opposed to leverage the handsets they've already got, they are trying to use this to get across the line. does it set up a desire to set up a free-standing business or

mask a fear? >> i don't think it is a fearful move on the part of apple. it is rounding out one of the broadest, deepest apple has had a great business selling movies and shows through itunes to make your life as much as possible once they are in in the moat to define

themselves i think netflix has an issue with regard to the amount of devices you can log in from. half the kids in my daughter's class use the log in for one subscription somebody's parents pay for. if netflix would lower that number maybe to two. >> there is always a kind of balancing act one of the reasons of that. one of the aspects was multiple log ins. they will be eroding fluffiness.

if you own a video service, you want people to watch it. >> away from the fluffiness. i want to ask you about news what jumps out to me is cord cutting and networks that don't produce news when we come into an election year, how do you see that shift? >> the subscription could include news programming >> but these don't >> but there are some that do. you raise a very pertinent question about the broader question of funding news overall where a lot of people are getting their news from a very low funding platform such as

networking or messaging platform on the one hand, we have the make sure your owner is a billi billionaire or as a broader part of tv offering news is very important for local tv audiences that's where we would expect broadcasters to be placing more emphasis going forward that is a difficult problem currently. >> okay. we've got to wrap it up. good to see a second ed on the program. >> let's go for the hat trick. see if we can find another ed. >> harris is on chief analyst will stay with us of course.

moving on. let's give you the retail sales numbers moving on. posed for bad numbers. on the face of it, these numbers met the lowered expectations the market had september retail sales negative 3.4% by volume negative 18.3% by value. the hong kong government already saying that they expect these weak numbers the subdued out look dampening and that is showing up here at this stage it is not really

moving the needle on the number and property prices. is that because there are enough main land prices to buy when the seller sells is. >> probably a view that this won't end cat stroficily one of those added geopolitical risks. the worry was always how does taiwan see this. on balance, it is reassuring that people that are so close to it don't feel that crisis. >> in terms of how we do get your expectation involved. there have been reports of carrie lam being replaced. what are the range of outcomes

you are looking at here? >> i don't have a super strong view in terms of individuals or what beijing endorses. there needs to be some change in personnel. it is interesting that it has taken so long to manifest itself >> coming up, president trump has some harsh words for jeremy corbyn find out how the labor leader responds no cover-up spray here. cheaper aerosols can cover up odors in a flowery fog. but febreze air effects eliminates odors. with a 100% natural propellent. it leaves behind a pleasant scent you'll love. [deep inhale] freshen up. don't cover up. febreze.

>> very quickly, england head into saturday's rugby cup world final. insisting his side are ready to go against new zealand saw england through while the spring box overcame wales. >> we have one more opportunity to play well

we want to play with no fear just get out there and play. we know south africa will give us a hard time just get out there and play. >> good luck to wales who play for runner up place against the kiwis. christine lagarde has started her first day. we say goodbye to mario draghi let's look back to when draghi wound it down and ramped it back up again >> today, measures have become warranted to achieve our priced ability objective given that the key ecb rates have reached the lower bound. we will on 9 march 2015 start purchasing euro denominated

securities in a secondary market we will also continue purchasing asset based securities and bonds as started last year the euro system will invest principal payments from securities to the asset program. >> economists this morning, joins us christine christine lagarde, how is it going to be different? >> not much. she hasn't got many options. we see that as a continuation of mario draghi with the monetary policy she also has limited experience as a central banker.

we see her mostly as a follower her role is political of a kind. she'll try to force the government into more spending creating the common budget >> some of the data has not been too bad this year. we got the larger numbers that suggested m 3 is probably rolling over at this point we see better performance in equity markets what is your best guess of what is going on with better markets? >> europe is a slow growing

block. this sort of data don't impact very much because in europe, some equity markets. the performance is sometimes driven by sector specific factors. you think of spain as a small stock market and the drive there and performance in the whole index maybe you should have some distortion and big weight in terms of financials. they may be related to regulation or where the economy is in general. this is the disconnect we have to live with

the credit data is looking better when you look at the ago row gat, you never get a big picture. you see the divergence in what is going on in italy in terms of germany and spain and what is going on in france where corporate lending has increased. >> how do you think draghi's historic performance is moving forwards lagarde, how will she respond to crisis she took a very different view to greece. she might not be able to force fiscal but in a crisis, she might act very differently italy, greece, how do you think she responds >> i think she is there to

manage in a bold way any possible crisis at a political level. at a technical level, it would be impossible to achieve the next down turn will find itself in fewer instance at the time draghi was the one to find most of these at least in europe. we cannot expect the ecb to step up again >> it is hard to say, to be honest from here more in the short term the question i think would be more interesting to ask. i tend to find an answer myself is what is the reactionary function to things like inflation. we haven't seen those reacting

in the past month after the meeting. so five-year inflation swaps are still low. the professional forecast is the historical low the risk looks like it is cued >> i want to get to the type of figure she will be mario draghi became a criticized figure criticized by italians and the germans, austrians and the dutch pension funds in his role in the savings of his country >> when you look at christine lagarde, very warm words from the greek leader you wonder if she can drive more reforms. will she be more instrumental on

the ground in countries where she has been already >> this week, i took this not retoil steps for not mentioning countries for spending money he's not ecb yet they have a policy of not naming specific countries she will be able possibly. i hope so. she'll be able to build a broader consensus around the fiscal side of the world i wouldn't be too optimistic about it it is a slightly better thing.

she's more prepared to deal with these kind of things >> is there an issue because she is a product of french politics where as draghi is more a product of policies. if she can't convince governments, maybe she has a psychology one of the things missing is that lending growth should be happening. a force to make sure that lending growth would be very targeted do you think that is where we are heading. >> the ecb always has traditional effects. it is obvious like the backdoor

province as they call them the fact that eurozone is not a political union and they haven't got a common budget enough that you can have this sort of transfers whose position is affected >> all the more reason they don't have to justify those things >> thank you for that contribution nice to have you on the program. michael is with us from crip stone strategic program. "worldwide exchange" is up next. "squawk box" says bye bye. have a great weekend

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it is 5:00 at cnbc and here is your five at 5:00 a friday bounce back wall street trying to regain ground after posting its worse day in two weeks jobs report count down looking for the latest read on us economy after that weak reporting yesterday. and warren versus cooperman. ripping into the top presidential