pphay ending that's available. craig melvin: that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [theme music] >> good morning and welcome to "street signs. joining the banking index after a six-month high the ceo tells cnbc he is not discouraged by the fall and fourth quarter profit. >> i think it is not so bad in an environment we all know is challenging.

>> the top line kicking into high gear in the fourth quarter. confirming its third year out look telling cnbc europe it is on the road to recovery >> no doubt we should expect midseason expectations we are clearly seeing a turnaround that is not a reflection of the gdp. we do not expect any substantial improvement in the economy >> wildcard doles wieals with aa at the fintech firm. >> soft bank is stung by wework's failed ipo. >> there are lessons we learned about going public

those lessons should be learned by everybody who wants to go public >> good morning, we are getting some good news out of the european economy to give you the final composite number this is higher than the initial estimate of 50.2 the services as well, we've had a couple of services come out. final services pmi has come in at 52.2 versus 51.8. we saw a final break down to bring you those. the final number for france was much higher than expectations coming in at 52.6 versus 50.8 in september. higher than the flash.

also for germany. both germany and france coming in higher than the flash numbers and kplcomposite also stronger. the worst may be over for european data. let's check on other european markets you can see it is broadly 50/50 between green and red. this is after a mixed session even though dow has made another high stoxx 600 treading on water here barely flat lined. one sector we are focused on is the banking sector, you can see a huge bounce. up 1% today.

deutsche up 2.4% we'll have more of those results later in the show. we'll be speaking to them shortly. elsewhere, wire card has posted a 43% rise in third quarter profit and confirmed its guidance in 2019 the german firm reports its findings following allegations of false accounting. joining us live from the headquarters of wirecard >> thank you i am joined by marcus brown, the ceo of wirecard. thank you for meeting with me.

let's talk about the results i think the market is pleased you've delivered your 2020 guidance today what specifically is behind this strength i think the strength shows accelerated growth especially when you combine it with first two quarters, you see each quarter increase in organic growth we show a strong and robust out look in 2020 which implies a midpoint in the first guidance of 34%, which is still conservative it is a little around what we are delivering now from 2019 we are at first guidance and we can give a strong robust out look for 2020. >> what regions are specifically behind this growth i would say we have seen in developed areas like europe and

west we see strong growth around 20 to 22% outside europe especially on emerging countries sometimes around 40% it is a mixture, i think we have a very good global mixture of regional services i think payment is probably in the next 10 years one of the strongest growth markets first, looking back at your bond perspective in september, you noted authorities in singapore are investigating allegations against your group and certain of your employees. can you give us an update on

that >> we gave an update to our own investigation we did in the full year results of 2018 we think this should give investors full optimistics we think that this could be finalized in the next month. >> i cannot anticipate authorities but we are very confident that the an list is there. >> i have to ask the recent

allegations around the dealing in dubai routing billions through 34 names through a partner company more than half the clients in this group have never heard of them a number were closed these 34 names don't respond to the merchants but they are labeled. why would you use labeling for your cluster >> let me give you a clear statement. this information is not authentic, how it was presented. this was a certain routing switch they tried to depict

hundreds, over 1,000 merchants were running those merchants are not existing anymore and we are also not doing the service with wirecard. we did the complete review of all relationships. i can completely confirm all relationships are authentic. this was also a special audit and all of this third party processing was a special audit measure in 2018. we can give already today the market full comfort. there were a couple of articles that at the end of the day were

wrong. we can completely reject allegations. completely now to give a couple of measures the comfort and what we already found out >> in terms of rational, you say there were hundreds of merchants, not 34. why would you use labels when you don't carry that practice out? >> we don't say this is a label but a whole package is not authentic. we have probably over 300,000 merchants. we have over 100 of partners that connect us to the solutions and third party acquiring.

that's the message the relationships there have been checked. 100%, we check these do you have any details around the scope of the audit presentation to that so the scope will be the allegations of ft we think we could finalize it quite quickly. we anticipate the finalization following the first quarter next year i would circle back to china what are your am decisions and the time frame for ramping up in

china. we gave details that was quite a unique deal for us we are the only european company getting for the license. we are the only two companies that can get such services i think that is in combination with the global platform for international merchants wanting to enter china and those expanding outside china. we anticipate the integration and set up that will last until end of 2020 we expect very strong results by additional growth we are anticipating the

contribution for 2021 and for 2022 already 50 million of ebd contribution >> we'll hand it back to you in the stood joe. >> thank you for bringing us that important interview discussing those allegations posting a net profit, the french bank also said it is confident it can hit the full target joining us live from paris i'm just checking in on the price. it's up around 4%. what do you think is giving investors this much guidance on the positive sentiment we are

seeing in reaction to the stock today? >> so the market is giving us positive signals and how they clearly enjoyed news of the higher ratio in the third quarter for the bank over the last years they delivered on that core demand for 2020. they wanted to receive the cet ratio in 2020. they managed to achieve that early on they repeated that once again in the third quarter. so, that is clearly boosting the share price. we know it is a challenging environment for european banks given the rates. the ecb announced another cut alongside the stimulus measures. the ceo told me yesterday he thinks this is the end of

monetary stimulus. >> what is important for me is whether europe with the new commission will be able to take some decisive actions. being a little self-ish in particular regarding the financial sector, everything should mean we have a stronger financial sector including the proportionate implementation the ecb has decided further monetary action and a reduction of the rate. we have more continuing. we are more at the end probably more of what needs to be done in europe is more on the

action, then forever for the decreased interest rate. we know if they last long, they can have a negative impact now more about the structural policy to stimulate the action >> how have you adapted your business to the latest round of stimulus >> we are not just a euro retail bank we have just 10% of our revenues made of interest income on deposit. it hurts we are fortunate to have a lot of activities outside the eurozone in russia and africa the same difference in france. the rates are fundamentally

different. thanks to the diversification and the balance, we are able to absorb this negative element knowing first i welcome the decision made also which is a way to mitigate the further decrease of the deposit trade. >> is that help enough >> it is not enough but at least it helps and it shows very importantly that the ecb pays attention to the impact of the negative rates maybe even more than the direct impact on this measure of our p&l. >> i also asked if christine lagarde, the new president of the european central bank should

focus on new financial instruments. he believes lagarde should take time to watch, look and understand let's pay attention to the lender i know you are very interested in the numbers let me give you a summary in the performance. french retail as well as international retail saw a slight drop from last year it was really investment banking that was a big drag in the third quarter results with net income down more than 26% >> thank you very interesting interview as he told you, they are indeed an equity business bank. down 26% so probably not a good signal for other banks out

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. >> executives from the world's biggest companies are taking part of the tech summit. the biggest from facebook, amazon and uber among the biggest topics karen is with us monitoring these stories closely. you have another guest with you now. >> yes indeed. we've been speaking about the big moat that exists between tech companies and silicon valley that doesn't seem to be getting smaller. with us is the chairwoman of mozilla. we are talking about the moat

that exists. we have the web browser segment. google's chrome 65%. the next nearest competitor is apple at 16% and your fire fox is 4%. how do you close the gap the goal is not to dominate. mozilla's goal is to make the market better. we are set up as a nonprofit it is pretty tough when we started, the industry was a little more open now it is consolidated you have to have a product that is a little different. our security and privacy focus is pretty different. we are frying to help people understand how a product that

looks like the others is rather different. the third is a fair amount of innovation and fourth is being structural different those are the tools we use it is a tough fight. >> we should point out that google is your default engine and you've used yahoo in the background it seems like it would be a matter of time before another competitor to surge. this is not going to stop, is it what will be required to stop that train will it be regulators. change will come from some new thing. the idea that someone is going to arise and have a search engine is pretty rare. the data and the history of

searching makes google better. the question is much more what are the new experiences. the challenge for dpugoogle is e whatsapp or the search >> you have more disruption in the market you were doing really well on pc's and computers then we saw the move towards mobil >> deep pockets are one thing. when the system was more open, we were able to make change more easily the phones has been very harsh to us. some markets are very local. there are countries in which our market share is much higher. we use that to try and innovate

and do new things. in general, it is a brutal setting. you almost have to do something new. it is easy to forget whatsapp was new when it appeared >> i was stunned to see, get 2,000 plus trackers off your trail including facebook are there really 2,000 plus people tracking you. >> not necessarily in any one search we can help you if you are using a browser. as you travel around the web, the amount people following you is phenomenal we started producing the privacy report it shows the things we've been doing for quite a while. we thought doing them in the

background we background where no one knew was the right thing. now we are showing that information. >> are you saying the gdpr is failing? >> no. it is showing the need for the gdpr and what it needs one approach might have been to take a very blunt law that says you can't do x you don't know unless you test it out the gdpr where you and i have some consent that's what the next few years are about. the whole background is

fascinating now we have barriers do you have a fear of the development because of this trade fight. we are seeing two things who can get to information from where? the separation is not a separation because of products tiktok is a good example of chinese products becoming global chinese products will be more integrated but the internet piece will be more separate. some areas fire fox is proprietary. the chairwoman of mozilla. tackling all the issues about

big tech and whether we'll see more innovation and bringing new design features into the mix and whether innovation can deal with some of the laws. the president of moicrosoft wil be on stage here speaking. he's calling for a geneva type convention to discuss the state of these things. thank you off to theac res eyeing growth in europe. more after the break memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.

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>> welcome to "street signs. i'm joumanna bercetche driving europe banking index to a six month high the ceo says he's not discouraged by the fall and

third quarter profit >> i think the good performance and resident profitability for the first eight months is not so bad in an environment that is challenging. >> adidas sees the top line kick into higher gear helping the sports gear maker confirm its out look >> there is no doubt we should be expecting midsingle digits in the european market. i believe we can out perform our standards last year. that is not a reflection of the gdp. we do not expect any improvement in the european economy. >> wirecard rejecting accusations.

>> we have hundreds of thousands merchants in this area the relationships there are authentic and have been checked. 100%, we check these allegations. >> soft bank is stung by wework's failed listing. telling cnbc he's learned from the botched ipo. >> there are less ones of how you go public. those less ones should be learned by everyone who wants to go public. european markets are trading side ways. we have the ftse and the dax below flat line. the cac and mib just above

t the mood has shifted a little south. today, much of the narrative has been consumed but what is happening in corporate earning space. right at the top of 4.4% giving a boost also coming out with results. slightly disappointing reaction in a stock price that stock is up about 50% on the year that is the picture for the global markets some side ways movement there. the euro trading a little firmer about a 10th of a percentage point. pmi kpozicomposite numbers camet when it comes to the overall numbers. a bit of a list.

cable trading on the back foot trading around 1.2880 and the yen overnight to the tune of .2 of a percentage point. yesterday, the dow just about eeked out another record high even though s&p and nasdaq didn't quite have the same fortunes you can see the three are edging a little more positive in line with europe lacking some momentum here which is what we had in the beginning days of this week. if this is leaning positive. there were those better services numbers out of the u.s. yesterday afternoon. speaking of the united states, the u.s. and china are reportedly looking for a location to sign a trade deal. the former security said he's all for a partial agreement but

he would not solve the world's economic problems. >> it would be better to have a phase one deal than not to i don't thinks it of a cosmic importance there would be large uncertainties between u.s. and china that would hold things back even if it is called a phase one deal some of the fundamental issues the kind of things causing the negative dead will be with us whether we do or do not have a trade deal, so yes, i am all for it the mistakes that have been made on both sides with respect to trade are self-inflicted wounds. we would be kidding ourselves if we thought we were one signing away from some is kind of

anywhe nirvana. >> one signing away from an economic nirvana not quite there. credit swish ceo says he's bullish on china >> believing in the fundamentals that have been driving china's growth for so many years are in fact it's a huge domestic market. very market oriented we have a very strong population those fundamentals are in place. i'm a great believer in health care seeing the sector continue to grow and do very well. we'll see tech in general. so the shift of a chinese model

from a manufacturing export to a more consumer oriented base will be less sensitive to issues like freight. >> softbank posted a far steeper loss equal to around $6.5 billion compared to an operating profit of roughly the same last year. softbank reported a loss on wework investment alone with ceo admitting his judgement was wrong on the office sharing startup. karen caught up with the chairman and asking about his valuation? >> i thought the valuation was crazy. at black stone, we are the largest real estate owners in

the world, there was no way in our view the company could have been worth that. on the other hand, they have a number of markets where they could take a 10-year lease and fix the building up and lease it at a higher price. they'll make a little more money with that. the valuation will probably be 5 to 7 times cash flow it shouldn't be huge >> jp morgan lost out in both wework's rescue package and the office sharing firm's failed ipo. >> i don't agree it had a $47 million valuation. that's not price discovery when a lot of smart people around the world knowing all the

facts that buy and sell all the time they are all different some of these companies have unbelievable technology. they may work and not work some are trying to grow so fast, they have a good underlying amount but they are all different how you go public and how you treat the public those less ones should be learned by everybody who wants to go public >> m&s reports a 17% fall. the weak improvement and market conditions remain challenging. and adidas beat profit forecast in the third quarter. they expect sales to be supported by renewed strength in europe speaking to cnbc, the ceo hailed

the company's latest results adding it is not seeing any margin pressure. >> we've been very happy with the third quarter. taking the margin up so very, very strong continued improvement. we saw double digit growth and 10% growth in north america. we are probably growing at two or three times the market rate we are concentrating on delivering a solid performance and then the share price will hopefully follow >> back to my question, your operating margin 1.3 gp plus net income down a couple of percent here as well are we finding, we know you have an enormous suite of products from the lower end to the higher end, are you finding pressure

now? >> not at this stage we expect the operating expense to grow. this was simply a sequencing this was the biggest single footwear launch which gave the third quarter an abnormal operating launch we have no concern over our current guidance which would put 2019 at another record year for us >> can i ask you about the supply issue, is that now resolved >> we grew 4% in the first half and 6% in the third quarter. we expect the substantial acceleration in the fourth quarter, everything is behind us. we have some quote, unquote left overs. we are completely behind the matter >> let's bring in the president

of sw retail advisors. talking about the lack of reaction in the stock price today. it basically done nothing. adidas is flat on the day. is it just a function that the stock has done so well it is impossible for there to be a positive surprise. >> exactly you said it is up 50% here short of north america being up 50%, you were going to see a little sell off here the big news was north america up 10% nike was up 4% in north america. they are pacing out. at the beginning of the year, they were blaming supply chain issues the question is was that legitimate or an excuse. now we know legitimate the stock is still up

significantly. how are they doing in terms of capturing market share versus nike >> i think over the last 18 months, we've seen nike with the resurgence you've seen the market flooded with all these retrobrands from fila adidas is kind of like the retro, retro europe turned positive after being negative >> a big question that they are actually seeing growth if europe is a positive sign for them. how important is it for these sports wear brands to be at the front of innovation? >> it is interesting because the footwear cycle is still very

healthy here and one of the few growth sectors it is becoming increasingly fashion oriented you have to keep it technical but again you are correct, you have to keep movingforward and be the new thing, the new color. nike is doing a lot of layering. adi and nike represent 60% of the sales. they are the two big ones. >> you are the retail expert here often times when you talk about retail, the story is one of dwindling football, amazon ification. shifting more towards leisure and away from the millennial

products what would you say differentiates the brands? or is it a function of taste it is who is getting the fashion right. it is really hard. most are fashion or technical. the feud wear guys are both. when it comes to e commerce, a lot have been dependent on wholesale. these brands are now becoming more direct and doing more on e commerce adi's e commerce sale were up around 7%. >> in the case of adidas, he was pointing to the higher out look. you mentioned the shift between the wholesale heavy discounting that is taking place versus the shift to direct to consumer sales. there, the margins are higher.

is this the mix the sport brands are getting right? >> it is when you shift to wholesale, it is the higher margin you take control of the destiny, it comes with a higher margin and means you can say we are not promoting, we are controlling our destiny. that mix is very important >> before you go, i want to ask you one quick question about underarmor how do you see things panning out from here? >> they took down guidance for the second half of the year. the set up they had going into the quarter was way too high we had this accounting scandal that we p found out had been

going on two years the way they managed it was not idea more importantly, that brand is considered a lower end brand and they are having a tough time segmenting and getting out of the lower end feel for the brand. that is the biggest challenge ahead for them >> thank you for giving us a great overview in the u.s. and worldwide. president of sw retail advisors. also coming up, jp morgan jamie dimon warns there is still risk ead. you can see relationships. connections. patterns. you can see what others can't. ♪

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>> welcome back to the show. the deal worth potential slally $7 billion all eyes are on the company's cheap executive and largest share holder who could roll his

16% stake in the deal to help finance the transaction. walgreens shares still ended the day up jamie dimon sounded a positive note but warns macroeconomic risks remain >> the consumer, 70% of the gdp is quite strong, their wages are going up, housing is in short supply, credit is quite good the business side has dropped dramatically, the confidence cap x has dropped. a lot is around the geopolitical issues and trade probably slowing down the economy a little bit it doesn't mean a recession, it

just means a slow down to what extend are some of their actions with democracy in hong kong and other things. >> i don't think you should be criticized for making profit the better part of 10 or 20 years the american government didn't pay that much attention to those things. the business community supports that these are trade disputes we hope get resolved there is legitimate criticism you should have done this sooner do you agree with the three rate cuts the fed has done this year? >> i think so.

they also can't completely predict the future the american economy is still growing at 2% or there about that was kind of insurance for the recession. inflation was rather low i'll leave the specific judgements to them they are wise people pausing it may not be a bad idea >> that was the ceo of jp morgan with a relatively benign out look on the u.s. economy let's check in on the u.s. markets in the last half an hour or so, we've turned south. s&p about two points lower, the dow about 20 points lower and the nasdaq about six points lower. we saw another interday record high too some of the stocks driving the

impact, boeing had a positive impact in yesterday's session for a change that has been a stock lagging. we also had better data a bit of a positive supply there helping to drive the gains that is it for "street signs" today. i'm joumanna bercetche stay with us because "worldwide exchange" is coming up next. most people think of verizon as a reliable phone company. (woman) but to businesses, we're a reliable partner. we keep companies ready for what's next. (man) we weave security into their business. virtualize their operations. (woman) and build ai customer experiences. we also keep them ready

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>> it is 5:00 here at cnbc new doubts surrounding soft bank this morning big time take overtalk zerox reportedly muling over buying hp. what could be the largest leverage buy out in history. the dow, will it be another record day as we await signals of another trade deal. and surprise news of a