4a welcome to "street signs." here are your headlines from london the global rally stalls in europe despite asia stocks trading their highs and wall street posting its best week since august meanwhile, rising crude prices push oil stocks higher but airlines share sufferer after they force the closure of libya's two largest oil fields and a military blockade chokes supply. 8 billion euro worth of

investment announced at the france summit as emmanuel macron tops execs atop wider tensions. and china's foreign ministry calls for canada to correct its mistake and free huawei cfo as the trial starts today. looks like a relatively positive start last week to the european trading session has not been reflected today. the european stock, 600 currently down around a quarter of a percent so far. if we look at the individual markets behind that number, you can see how that's happening it looks like here in london, look at the ftse 100, there's been an interesting negative start to the day, reflecting what you see around europe, quarter of a percent lower

the c a. c down a third of the percent. the ftse mib down. if we look onto individual stories, though, that have been driving some action in the market, oil prices surged their highest after a military blockade in libya shut down the country's two largest production facilities forces closed a key pipeline as rival factions continue to fight for north african nation after a meeting and supporters from berlin over the weekend, several world leaders promised their own security forces would not interfere in the libyan conflict you can see brent crude trading around four-fifths of a percent. the airline stocks being impacted, you can see oil majors

performing well. those majors all down significantly. repsol down. in the airline space, not a pretty picture air france klm, easyjet, some of the largest european operators all trading into the red, expecting higher costs for their fuel obviously, some other factors at play there one would imagine. my colleague, dan murphy joining me from abu dhabi what this means for libya's oil output >> we've been tracking the oil market reaction throughout the course of the asian session. oil prices hitting their highest level in more than a week, up more than 1% as we progress through the middle east in trading days we move into the european trading day. as we head towards the start of trade in the united states, you

can see here, oil actually just coming off those highs brent crude 65.33 a u.s. barrel, up 75% nymex up 0.61% this comes after we saw a shut-in in libya in the order of 800,000 barrels. in is a sizeable amount of oil to come off the market libyan forces deciding to move against oil fields and a number of production facilities as a result of traders are reacting to that by pushing up the price of oil what will be interesting to watch, whether or not we see gains being faded further. over the past few months, when we have these tensions in the region, usually resulting in an immediate uptick in the price of oil, traders have actually faded that away. what's interesting about this most recent move, though, is that some of the gains are being sustained. yes, we've come off those highs but oil prices are still

elevated that's because we're talking about real barrels here. there's quite an interesting political story developing out of this as well. what we have seen is the main backers of these rival libyan factions, this is the lna and the un-backed of national accord both at a peace conference held in berlin. the germen chancellor, angela merkel, saying they agreed to a truce in eee but there's a question mark whether this will result in a permanent cease-fire listen in. >> translator: we noted we all agree we should respect the arms embargo and is the arms embargo should be controlled more strongly than it has been in the past we have to make sure that all the parties that are in in way connected to the conflict speak with one voice that was the goal of today's conference then the parties will also

understand there is only one nonmilitary way to a solution, and we have achieved that result >> so, a cease-fire may still be a on it while away we have seen both sides agreeing to meet again in geneva to continue the conversation. that's certainly a positive step in the right direction of course, the other important thing to remember here is this isn't necessarily new. we've seen these rival sides battling for eee over the past five years and even longer as a result, there is a muted response, if you will, among the international community regarding this also in asset markets as well. this is a story we've seen before however, the significance of the oil shut-in cannot be understated. that's you why we're seeing oil prices react in the way they have, guys back over to. >> thanks for joining us breaking down the details of that complicated story out of libya. to talk about this in a bit more

detail, we're joined by the ceo of hassan market the details of that libya conflict, the pipeline closing down thanks to a rebel faction by this general, that's very much in the weeds. but big picture, geopolitical tension, north africa, whether it's in the persian gulf, do you think it matters in the long term when you're looking at oil prices >> it does matter because it has an impact, as you've seen, on the airline names. the reality is opec are ou there. they have the ability to turn on supply they're likely to do so. the rally we've seen in wti or brent tis pates. the real driver of oil price is supply and global demand in terms of. >> growth. we know growth is muted. it's short term in nature. we saw what happened in iran oil prices spiked and then came down we don't expect it to have a meaningful impact on markets going forward.

>> let's talk about growth you mention they've been subdued over the last 18 months. in europe, do you expect that to change any time soon >> yes, we are expecting growth to pick up going forward growth has to be financed. its not a freebie. it's financed in two ways -- fiscal spending. we see fiscal spending announced in europe and uk that's the case in u.s that stimulates growth on top of that we have weak currency both in europe and the uk relative to the u.s. dollar on a ppp basis and that helps support growth going forward we also have reasonable valuations relative to the u.s. as well which helps investment which encourages growth. we'd like to see european growth story improve, the uk story improve. especially geopolitical noise starts to dissipate. >> you mentioned a whole range of things. let's start with the dollar. you mentioned the weakness of

the euro and pound compared to the dollar do you see that changing any time soon? do you think the dollar will see a pullback in the next six months >> in the next 6 to 12 months we'll see a pullback it will be gradual in nature the dollar is 12% overvalued compared to the europe row, 11% overvalued to the sterling all on the ppp basis the dollar has been too strong for such a long time it will slowly weaken to more normalized levels. >> what will drive that weakening? >> i think currency reverts to ppp levels over longer term. as you see stabilization in the bond markets, normalization in the currency sxhashgts that will follow through you've had a lot of rate cuts priced into the marketplace. you have one more rate cut priced in to the tune of 56% probability in the u.s in the uk an 85% probability of

a rate indicate. in the uk -- sorry, in europe, there's zero percent chance. you start to see rate cuts that normalize the bond market when you look at the yield curve and see currency normalizing as well a lot depends on flows in the short term and growth expectations of course, earnings will have an impact as well we see q4 earnings about to kick off, has kicked off, probably going to be better than previous quarters the numbers for 2020 look quite encouraging. probably too optimistic. that also drives sentiment as well >> let's talk about earnings and split them up about what's happening on that side of the atlantic and this side of the atlantic do you expect europe to come back stronger compared to the u.s. since they are starting since that low base? >> definitely. earnings -- european revenue growth is going to be more

disappointing than the u.s probably around 9% the earnings figure growth around 2.5% is quite encouraging. it's indicative of european companies quicker to cut costs, which is much better than the u.s. number which looks like it's going to be negative. earnings is the real driver of share price appreciation that's what investors are focused on not geopolitical events, not impeachment risks, not rhetoric between what's going on between u.s. and china or skinny brexit. it's earnings to drive share price appreciation and that's what we'll be focused on >> as we get into the thick of thing says for the q4 earnings season, on the u.s. side of things, do you think the u.s. side are being matched by share price performance or do you think shares are going a bit higher based on what you're expecting? >> share prices are definitely

higher than the earnings would suggest but we've come from a beaten up earnings environment over the last 18 months. although you wouldn't expect that from the way the equity markets have performed i think the markets are starting to price in a very enthusiasm 202 despite the q4 numbers the thing we're worried about the we cequity market in the u. they're hitting highs. we think that's short-term in nature we think there's a lot of fast money participating, hedge funds, perhaps retail buyers who have been behind the curve in building exposurexposure when you look at the bigger players like the municipalities, if you look at pension funds, they tend to be adjusting their strategic asset allocation on the long term reducing equity exposure so we think there's a misalignment at the moment we think global markets will trade higher throughout 2020

in the short term, valuations seem higher, record his, earnings don't support it. a lot of fast money action so expect markets to pull back slightly. >> final question. do you think over the next couple of months, as we work through q4 earnings numbers, people start thinking about the details of earnings projections for 2020, that the markets particularly in the u.s. will be a bit more range-bound, we won't see continual daily peaks being hit? >> absolutely. the markets have to take a breather that's historically very expensive. there are cheaper alternatives in europe, in china and in the uk expect to see some flows the valuation metrics don't support markets being as high as they are, bearing in mind the earnings numbers we're seeing. >> thanks for that analysis, that insight staying with us. ceo and founding partner of

hassium asset management. oxfam has released a report that highlights wealth disparity around the world we'll have results of that study when we come back. ♪

some things are too important to do yourself. get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today.

welcome back to "street signs. the german cabin crew says it will announce new walkouts and consider indefinite strikes. the group says pay, pension and legal recognition were its biggest problems with germany's largest airline and this would represent a considerably broader measure than the three-day strike they initiated late last year the union will announce new details, they said, on wednesday. meanwhile, citigroup has upgraded its target from 15 euros to 16 euros and graup raided the stock to buy. there are more than 2,000 billionaires worldwide and a new study from oxfam shows these individuals together control more wealth than the most impoverished 60% of the global

population that's roughly 4.6 billion people oxfam's published this new details ahead of davos where the charity will be asking policy makers to reduce poverty through tax increases that target the rich they say 0.5% of taxes on the world's wealthiest could fund 17 million new jobs. climate change and damage to the natural world could threaten more than half of all global gdp, according to a joint report from the world economic forum. the study found $44 trillion worth of value generation depends on the natural world, which is threatened by higher global temperatures. sectors on threat the most include construction, agriculture and food and beverages. meanwhile, a report from the pr consultancy firm edelman found a majority of people around the world believe capitalism in its current form

does more harm than good the authors of the firm's trust ba ram tore write rising inequality have more and more people question the benefits that theoretically derive from western market democracies don't miss our live coverage from davos that starts today at 1600/4 p.m. central european time. while in davos, my colleague will be sitting down with the hong kong chief executive, carrie lam for a first interview coming up tomorrow at 1630/4:30 central time. donald trump is set to hold talks with eu in davos they signed a preliminary deal with beijing and washington's focus may turn back to trade issues with europe the u.s. has threatened to retaliation with 100% levy on

french champagne and handbags and those tariffs could come spew effect by the end of the month if no fresh progress is made president trump has told u.s. farmers the preliminary deal with china will be a boone to u.s. u.s. agriculture goods farmers in the u.s. have been particularly hard hit since the u.s. government triggered trade tensions with china 18 months ago. the recently signed deal includes a chinese promise to purchase an additional $200 billion in goods and services including agriculture products trump was speaking at the farmers convention in texas over the weekend and took aim at his critics from across the political aisle. >> the two momentous trade deals completed last week are just the beginning of a really incredible story. nobody thought we'd ever get here they said the deal with china would be impossible to make. and getting rid of nafta would

be totally impossible. one of the reasons it was totally possible, it was such a bad deal for us. we're achieving what no administration has ever achieved before and what do i get out of it? tell me. i get impeached. that's what i get out of it. by these radical left lunatics, i get impeached. that's okay. the farmers are sticking with trump. they're sticking with trump. >> the president says the farmers are sticking with trump. are investors sticking with trump? do they want him to win the election at the end of the year? is his role in the white house helpful financially, economically for those that trade the markets? >> trump has been very positive for u.s. equity markets. the s&p 500 up around 30% last

year a lot of that was on the back of the tax cuts you had massive fiscal spending plans which have been implemented as well and rate cuts as well with rates in the u.s. now at 1.75%. trump has been good for financial markets. whether you agree with his politics, whether you agree with the way he engages with the marketplace and with other nations is debatable he's been very positive for u.s. equity markets our view is one, he's likely to want get impeached and he's likely to win the election in 2020 andthis i seen as positive for u.s. equity markets. between now and then, you're likely to see a trade deal struck with more content than has currently been announced between the u.s. and china that will be positive for markets as well. interestingly, the u.s. is up 3.1% year to date. literally in the first two weeks. china is up 3.1% year to date in

the first two to three weeks very positive start to the year. all on the back of trade deal announcements and the politics of what's going on with trump. >> so, if you see this secondary trade deal being announced, signed, confirmed in want not too distant future, how do you trade around that as aid piece of news development? >> terms of trading, i think you have to go back to fundamentals. i think you have to think beyond trade wars, beyond trump impeachment, beyond impeachment. we go back to the fundamental story of, are we seeing global growth are we seeing u.s. growth? are we seeing chinese growth at a domestic level if we are, that will spill through to earnings and it will be earnings to drive share price. investors will see that. you've seen a lot of sentiment driven rallies on the back of announcements in this regard you have to go back to the earnings story the earnings story for the u.s. is quite weak. we have negative earnings growth

for q4 the revenue story is quite positive with growth of around 2% to 2.5% which is what we're looking to see more of guidance for managers and your coverage during davos will give us some indication as to how things are looking forward forward. we'll be positive as well. that's what will drive markets higher over the medium to longer term. >> what do you think the fed is going to do this year and how does that compare to what the overall market expects >>. >> rates are at 1.75%. you have 50% chance of one more rat rate cut and 19% chance of two more rate cuts we believe you'll get one more rate cut but it will be driven by policy and sentiment rather than needed on a fundamental basis. you'll see a very normal yield curve. short term rates at 1.5% then you'll see the flows you'd expect to see for equity markets

to gradually trade higher. one more rate cut is priced in but it's more about sentiment than required on a fundamental basis. >> you mentioned the fed are grappling with the politics of the current environment. that's not been all that different with the bank of he can land wiengland and brexit to talk about the uk, what about the spending limits announced mean >> the spending plans are very significant. investors are paying a lot of attention to what's been announced. a few things will happen spending, at least fiscal spending which leads to growth which should help earnings and so uk equities should trade higher there is also a flip side to this with bond markets as well increase fiscal spending means you have to issue more bonds to finance the spending, which will drive yields higher. bond yields going higher, more normalized yield curve, you're likely to see flows into

equities and you should see equity markets trade higher as well that's our thesis. we actually think that the uk's been deprived over the last three years. there's been a halt to investments at a corporate level because of all the uncertainty much of that uncertainty, not all of it, but much of it has been taken off the table you'll start to see capital go back into the uk we think the uk is a good place to be and we would be enkoushlging investors. >> quickly, which sectors do you think will perform well? >> anything with domestic exposure to small to midcap will do well. we like financials on a valuation basis. they should do well in this environment. anything related to construction and real estate because we actually see those markets doing well in this investment, too. >> thank you do stay with us. the founding partner of hassium. the impeachment heats up with one day away from the start

of president trump's impeachment trial. what can you expect? we'll give you the details

welcome back to "street signs. the global rally stalls in europe despite asia stocks trading near 20-month hoos and wall street posting it's best week since august. airline shares continue to suffer after unrest forces the closure of libya's two largest oil fields and a military blockade chokes supply. 8 billion euros set of invei investment to be announced as emmanuel macron tries to lure new he can exs. policy makers and business leaders travel to da voss as oxfam warns billionaires control more than 60% of the global population don't miss all of our live coverage from davos starting at 1600 cte

it's been a negative start for european markets this morning. so far after that latest record set in the u.s. at the end of last week, the ftse 100 down around a quarter of a percent. the cac in paris trading around two-fifths of a percent. we've been talking about currency a while ago let's take a look at how the various currencies perform against each other you can see the pound weaker against the dollar by a third of a percent. the dollar stronger against the japanese yen and the swiss franc and the euro trading three basis points weaker against the dollar so far the u.s. senate's impeachment trial against president trump set to begin tomorrow some of the commander in chief's biggest advocates, supporters and critics took to the air waves over the weekend to give

the public a preview of the various arguments. hans nichols filed this report >> reporter: president trump touching down in texas to taut his china trade deal before a friendly audience. after the president's legal team formally responded to the senate impeachment summons calling the articles brazen and unlawful democrats today dismissing that argument >> there is ample evidence, over whelming evidence any jury would convictin three minutes flat. >> reporter: while alan dershowitz distanced himself from the white house legal team that he's joining. >> i did not read that brief or sign that brief. that's not part of my mandate. my mandate is to present the constitutional argument. >> reporter: aside from knowing tuesday's start time, there's still uncertainty if new witnesses and evidence will be allowed during the process >> senator mcconnell prevails and there's no witnesses it will be the first impeachment trial in history that goes to conclusion without witnesses >> reporter: some of the rules

are known. no cell phones, no standing, no talking. senators are to remain silent. they may want to consider a redo. >> maybe they ought to withdrawal the articles of impeachment and start over again. >> reporter: with one of the president's closestallies saying president trump wants the impeachment wrapped up by state of the union on february 4th. >> his mindset is to go to the state of the union and talk about what he wants to do for the rest of 2020. >> well, that was hans nichols from msnbc news with some details. we're joined by jeffrey howard, associate professor of political science. we have this month-long delay from the moment the house of representatives voted for impeachment to the start of the trial in the senate. has any evidence that's come out in the intervening period, specifically from this guy lev parnas, an associate of the president's personal lawyer,

rudy giuliani, has any of that in your mind change the way the senate might handle this trial >> i think the revelations have made it much more difficult for senators to ignore witnesses a lot of people were critical of house speaker nancy pelosi's decision to sit on the articles for a while while the political universe in washington fretted around that. i think in the end it was a shrewd part because a lot has come to light about lev parnas' doings in ukraine. looks like he's implicated the president, bill barr, vice president mike pence according to lev parnas, by the way, we have to be somewhat skeptical of lev parnas but he confirmed a lot of what we've been supportsing is a lot of people in the president's inner circle knew about the pressure on ukrainian government to cook up dirt on joe biden it wasn't just a general crackdown on ukraine, which is what the president of the united states has been saying it was a specific effort to cook

up dirt on joe biden the more we learn, the worse it is for trump and the more difficult it is for senators from more moderate states to go along with not hearing witnesses in impeachment >> how do you explain the reluctance of some republican senators to stop the idea of having witnesses there >> there are different kinds of republican senators. some republican senators come from states where their constituencies are trumpers, people who really support the. the. they don't want to make those constituents angry if they support witnesses against the president's wishes, he'll lamblast them on twitter they have all the political incentive in the world not to support witnesses because the president doesn't want witnesses. on the other hand, you have nosh senators from more moderate states, like susan collins from maine, lisa murkowski from alaska, mitt romney very much independent minded republican voice from utah, and they are going to be more skeptical and

probably could be brought around to support witnesses if you get one more republican to supporting witnesses, someone like lamar alexander from tennessee who is planning on retiring anyway and might want to have his legacy be that of a more independent-minded voice, add that to the 45 democrats and the 2 independents and you have 51 votes for witnesses we'll have people like john bolton coming in and telling us why, if allegations are true, he called the attempt by rudy giuliani to pressure ukrainian officials to cook up dirt on joe biden a drug deal. we'll hear from members of the omb who can explain in more details the mechanics by which the president ordered nearly $400 million of money was held up that will be extremely rich evidence while i don't think in the end it will persuade 20 republicans

to vote with democrats to remove the president from office, but it will increase the political pressure and exact a greater political cost. >> you mentioned tennesseean alexander, having a legacy from this trial it's striking to me, just last week joe biden reminded of his vote for the iraq war, that's 17 years ago now. it's a milestone around his neck do you think the way senators behave in and around this impeachment trial could be a millstone around their neck in the future politically >> absolutely. i think historians, never mind their children and grandchildren, will judge them for what they did today. i think a lot of this really came home for us when chief justice john roberts was sworn in and suddenly it wasn't just a debate taking place on twitter it was real. we heard in that segment from hans nichols about the threat of imprisonment for any senator who break this is process. i think when the chief justice

demanded these senators do impartial justice, inc. a few of their ears perked up and they started thinking more solemnly about their obligation as senators impartial justice isn't just a legal justice, it's a moral idea it's about the ethical obligations of those who have taken an oath to protect and serve the constitution of the united states. >> the actions of president trump at the center of this involved the suspension of military aid to ukraine and recently because of some of the release of documents we now know the government accountability office decided that was not legal. does that matter in a trial like this >> it's wanot a criminal violatn but a legal violation of the accountability office which is an independent watch dog which holds the government to account has come to this finding that the government acted inappropriately, the president acted inappropriately when it held up that money when the congress appropriate rates money to an ally of the

united states for war, and president decides not to let that money flow, that's a violation of the law for a while now, supporters of the president in congress have been saying, if we impeach the president this will be the first time there hasn't been an actual crime. well, here it is an actual criminal offense isn't necessary. it's a political and moral idea the founders embedded in the constitution, not a narrow legal one. if they insist we identify a particular law the president has broken, well, the government accountability office has identified one so i think it does matter. >> one final question. we talk about this as a possibility he'll be convicted but you said you don't expect 20 republican senators to switch sides and vote in favor of that. if he's not going to be convicted, president trump, does this help or hinder his re-election chances in november? >> i think one of the reasons he doesn't want witnesses is because he ps to be able to declare victory.

quickly he wants to be able to say the senate aconvicted him like the mueller probe wasn't able to find anything legally decisive against him and he thinks that will serve his purposes very well on the campaign trail if there are witnesses, it could go down to the benefit of someone like elizabeth warren who is talking about corruption as a main theme of her campaign and help someone like joe biden. one thing that's clear from this whole mess is how terrified the president seems to be that joe biden will be his general election opponent. >> thanks for coming in. appreciate it. jeffrey howard, associate professor of political science at uc. the chancellor javits says britain will not force close regulatory ties with the eu after brexit in an interview, javits said, quote, there will not be alignment, we'll not be a real taker. and rejected the suggestion that treasury would benefit big manufacturers like aerospace,

pharmaceutical companies saying they had three years to prepare for the new trading relationship, even though we don't know yet what that relationship will be the chancellor's comments prompted a sharp response from industry in the uk the uk warned any disruption across the car industry could cost billions of pounds. con felt ra cbi said it supported jobs and competitiveness. do you thinks that the foreign investment in the uk we are well aware of has been lacking over the last 18 months amid all the political uncertainty, do you think as of the end of this month, a light goes on and people start pushing money back into the uk economy? >> i don't think it's going to be instant in the way you're suggesting it will be a gradual investment

backing to the uk. a lot of these decisions to invest have been put on hold because of all the uncertainty we're now getting some clarity so we'll start to see some investing. it's quite interesting some 80% of the uk economy is service-oriented and about 60 billion is exported out to the rest of the world. most is to europe. europe needs to trade with the uk the uk needs to trade with europe as it involves, you'll start to see more flows coming into the uk, more investment made into the uk that will then spill over into earnings which should then drive share price appreciation remember, uk equities are trading at a discount to the rest of the world because of what's happening over the last three years. that will slowly dissipate. >> if you're trading british equities or trading the british currency over the next 11 months, as these trade talks

progress, do you think the developments in those talks about be watched as closely and will have as great an impact as the political developments over the course of last year had? >> absolutely. i question the word trading. we're long-term investors and we focus on investing over the next two, three, five, ten years. if you're looking for a good entry point as a long-term investor, this is a good entry point. this seems like a sensible time to be putting money to work. the traders and speculators will be watching on every announcement made and buy and sell that's not the business we're in long-term investing is the way to focus. >> thank you for your time this morning. appreciate if you have any views on the impeachment trial in the senate, on brexit and the future trading relationship between the uk and europe, get in touch on twitter @streetsignscnbc coming up on this program,

nearly 200 ceos are gathering in paris en route to davos, but will big names choose france we'll discuss the details after this break don't miss our live coverage from the world economic forum in davos. that starts today at 1600 cet. coming up wednesday, be sure to catch our panel on the future of financial markets he'll be joined on stage by u.s. treasury secretary steve mnuchin, and jpmorgan and chairman of ubs. feeling sluggish or weighed down can be a sign your digestive system isn't working at its best. taking metamucil every day can help. its psyllium fiber forms a gel that traps and removes the waste that weighs you down. it also helps lower cholesterol and slows sugar absorption, promoting healthy blood sugar levels.

so, start feeling lighter and more energetic by taking metamucil every day. take the metamucil two-week challenge, lighten up. just take metamucil every day for two weeks. available at your local retailer.

some things are too important to do yourself. ♪ get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today.

welcome back to the program. samsung's smartphone operations division has a new chief as part of a wider reshuffle for that business unit. the tech giant posted five straight quarters of lower earnings and is hoping to strengthen its ability to face competitions including huawei. china's foreign ministry has

said canada must, quote, correct its mistake and release the company's cfo, mention wanzhou the daughter of the company's founder has been convicted of committing fraud around u.s. around and iran. global ceos are joining in versailles in the choose france summit many will be on their way to the swiss alps for the wef in davos. 200 top executives are expected to attend the summit where emmanuel macron will speak and they expect 8 billion euros of investment to be auns noed at the event. why is president macron doing this for the third time of asking and where are those numbers, the 8 billion coming

from >> you had 1 billion investment in france. as as trazeneca announcing 450 million euro, and cruise liner and 5g, so all this news trickling through saying about 8 billion of investment to be announced. we had s.a.p. announcing, and google opening research labs in france this is part of emmanuel macron selling france you have 600 ceos gathering. third time this gathering is organized. you have coca-cola, ge, youtube,

netflix all attending, and rolling out the red carpet for them it's a way for president macron to say they're still plowing through with their pro-business agenda they've had tough reforms in the last 2 1/2 years of his mandate making it easier to hire and fire employees, the corporate tax from 33% to 25% by 2022, doing it gradually and also, uyou know, a bit of p.i. on the back of the striks,s saying we're plowing through with our efforts to reform the economy. it's quite attractive. more attractive for investment than germany germany facing difficulty, difficulties with uk with brexit they say france is growing economy, slow growth but growing. some strikes and protests but that's because we are reforming the economy so keep investing

here they're pushing on with the message. the element of the digital tax a lot of of those tech ceos attended the summit, for macron saying we're beefing it up to make it modern and ready for the next century a lot of tech ceoeys are going to davos but not going to versailles gathering maybe they don't want to be seen in france on the back of the controversial 3% tech tax france put in place the discussions are going between the two countries. meeting mr. mnuchin on the sidelines of davos hoping to come back with a global solution on tech tax. a lot of the google ceos, uber ceos don't want to be seen in versailles at the moment. tech earning seasontics off this week. netflix will release its fourth

quarter results while most of its fan counterparts will be announcing their earnings next week the sector has been involved in some high-profile battles over the past years when it comes to cloud services and online streaming platforms dan ives, has gotten up incredibly early we appreciate your time. how strong are things looking for apple for next year, this coming year, i should say? we're into 2020 now. >> yeah, to me, this is -- we're in the start of a super cycle for apple. i think when you look at the 5g super cycle in terms of what we think is going to be a $400 stock when you look out into a year, i think it comes down to an upgrade cycle that's from a f.a.n.g. name perspective. we continue to be very bullish in the sector and see a 25% morally in these names going to next year. >> is it getting close to a point, this is one of the other

factors that's so fascinating, where a lot of iphone owners and users around the world are start, to think, i could probably do an upgrade soon? that's the key put in numbers 350 million of iphones are in upgrade opportunity over the next 12 to 15 months that combined with the 5g super cycle is why we believe you're going to cupertino which is whys our top name the haters will continue to hate but fundamentally the numbers don't lie. i can tell you i just came back from asia last night and everything looks firmly bullish for a 5g super cycle into the next year. >> let's leave aside the haters but focus on asia. the u.s./china trade conflicts,

you can describe it as noise, what's it meant for a company like apple in terms of selling its products inside china? >> i think if you look, china is the key to the growth for apple. 60 to 70 million iphones are in the window of opportunity in china. china is tracking 10% to 15% above expectations you can have the noise, huawei during the trade issues and apple perception, it hasn't happened that's the key if you look, china is the fuel in the engine for apple. we don't see any signs that that's starting to slow. and i think with a phase one deal now in the rearview, i think that does give a green light for tech both on the chinese as well as u.s. side and the apple is front and center as they were poster child of this issue. >> do you think i.t. spnding

globally amongst big corporations is going to increase at a positive rate and what does that mean for competition in the cloud space in particular? >> if you look today, we believe i.t. spending will about be 4% this year. pretty modest. you talk about cloud, cyber security we believe that's up 18% to 20%. so, magnitudes in terms of an increase there, and that's why to us microsoft continues to be our core way to play the cloud aws would be a big focus on the amazon side but leading to what we believe, 300 have been spent on the cloud the last four years. the next three to four, 700 billion. i think right now that continues to be a sector that investors are really keenly focused on because that's where the growth is and i think there's going to be con so will lags. look at google to make a significant cloud acquisition over the next three to six

months. >> thank you for getting up early. daniel ives from wedbush securities. coming up on our programming across the course of this last week, don't miss cnbc's live coverage from the world economic forum starting at 4:00 p.m. central european time. huge number of high profile gusts. tune in. that's it for today's "street signs. stay with cnbc ♪

some things are too important to do yourself. get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today.

but from what i see, compared to the other houses, this is leaving me very, very underwhelmed. - is it the fake astroturf or the cold prison stucco? - selling houses is like a first date: you know if you are drawn to it immediately. - maybe after six drinks. - probably more. - aaron kirman has sold over $5 billion worth of luxury real estate, serving the wealthiest clients in l.a.'s most exclusive zip codes. - i would like to price this house right at 10. - he's known for selling difficult homes no one else can. - this is like a multi-million-dollar view, but the pool is looking sad. - don't hurt its feelings. - and he does it by telling rich owners what no one else will.