of the impact of the coronavirus closely. shares of san stander have jump after reporting revenue after strong demand in the u.s speaking with the ceo, let's take a listen. >> interest rates of course, very low rates i've said many times, you have to look at the pluses and minus. i'm not sure they benefit the economy. in the uk, we are focused on profitability. the transformation will look better in years. as part of europe, we are aiming to improve that over the next couple of years. we have said we get to 11% the uk is one of the countries where we are expecting more

improvement in 2021. it takes time. remember for us, the focus is doing it the right way we want to make sure we continue to improve the customer experience negative rates, the key is the transmission is there more demand for credit as you lower rates have you seen that probably not in spain? savers get more worried with negative rates and so they save more >> what are you thinking for year 2020? what kind of year do you think we are going to get? >> i have huge confidence in our model. i think the model we have is strong and delivers through the cycle. i think that combination of being able as we discussed to reallocate capital to higher growth regions and do it the right way. we bought back the mexican part

this year. not a lot of banks have that digital customers, we've more than doubled up 50% that is a huge priority. we have 36%, 37% of digital sales. one of the numbers not well-known, which i'm going to share, those digital customers engage with us 700 million times a month. that is five times a week. uk is leading on digital there is a lot of opportunities for us in 2020, whatever happens to the economy >> what are the chances you'll come to an out of court settlement before it goes to court in april >> we are focused on the future going to business. this is an issue for lawyers

>> you are not negotiating >> the lawyers will figure it out. >> you are going to let the lawyers deal with it >> i'm focused on the business and making sure we deliver i want to leave you with the last and insist that transformation of the model, we said last year, we want to accelerate the transition. showing you the profitability is much higher. this is what is on my mind trying to make sure the teams are doing what they need to do and managing santander for our share holders. >> which is what you can do. we have a couple of headline risks. i'd be interested to see what you think. the most current one is the coronavirus story that is growing. the other is the question of what happens with the trade war between united states and china

and potentially united states and europe >> we are in a better place on trade. now there is this health issue we don't have a lot of people in asia the key in both of those is confidence the world is going to be about the same, maybe a bit worse next year latin america is going to do better if you look at all of south america, this year, 2019, we didn't grow. this is what is important for me we can do better in spite of the environment. zero growth in the market. 2020 in south america and mexico u.s. will be about the same but higher growth. u.s. is expected to grow 2% to 3% mexico will grow not great numbers. this is what we are working on growth will be good.

we can do better even if there is not great growth. at the end, the most challenging market is going to be europe i always tell my team, let's make sure we learn how to do banking better in a difficult environment. it means if one day we are able to grow faster in other markets, we have learned in a tough environment. >> our colleague conducted that interview and joins us live with more did she have much to say how her banks stack up against u.s. peers? >> let me backfill on that the question was explicit about the bank of england tomorrow and whether mark carney is likely to pull the trigger on a rate cut

ana clearly doesn't believe the transmission works really well with negative interest rates from the ecb or near zero interest rates from the bank of england. that is just a message she'd rather not see that move in interest rates lower tomorrow from the bank of england to address your question specifically, i think it was fairly clear from what she said that the real growth at the moment is coming from the americas when you look at what they get out of brazil, it is in excess of 20% for europe as a whole, it is 11%. 11% on the face, not too shaby that might compare with some of the numbers you see from bigger u.s. banks, like citibank on their fourth quarter but she doesn't feel that that is good enough and is perhaps a reflection of the underlying

weakness we are seeing in the european economies one of the key messages she was putting across there is while they continue to hope for some recovery in business activity in the european space, they are not sitting on their lur lurals. one of the steps they took last year was increasing their ownership in the mexican business as a way of capitalizing on that faster growth i think she understands the relative merits. she will look to allocate into latin and even north america, which has come back quite strongly in the fourth quarter but it is all about execution for 2020 they've got a strong spring pad to build on coming out of the fourth quarter numbers in terms of revenue and earnings.

the question is will they be able to take that forward into the early part of this year and capitalize on that >> thank you for that. the coronavirus has now claimed more than 130 lives in china and reported more than 1,500 new cases since yesterday bringing the total number to nearly 6,000 beijing continues with its efforts and other countries have begun to evacuate from the region almost all of the deaths have occurred on the province that remains on virtual lockdown and in hong kong, the market down today. >> despite the movement we had in hong kong overnight downward at 3%, overall, we are seeing

sentiment. investment focus has shifted to earning season we have positive results out of apple, one of the reasons tech was doing so well yesterday. we had a solid performance of the nikkei and kospi as well the handover from u.s. and asia looks quite well in europe, we are focused on earnings as well we are talking about santander that is one outperforming this morning. opening up nicely. let me get to individual forces starting with the ftse up 28 points back through 7,500 a point of symmetry for uk

investors. property stocks are doing very well with some strong prices this morning the biggest rise since 2008. dax up about 0.02 there. we are seeing positive reaction in tech stocks in term any on ba -- germany on back of those apple stocks luxury and lvmh reported yesterday solid earnings caution about the outlook and exposure to the coronavirus. switching to sectors you can see every single sector is green except one. telecom. the decision out of uk to allow

huawei to work with them not so positive oil and gas, we are seeing recovery and food and beverage, slightly positive. at the top, financial services, basic resources. any one of the stock sectors that got hit at the beginning of the week on the back of exposure to mainland china, we have banks up as the earnings season kicks off here santander reporting a strong profit up 4% looking at sectors that have exposure and knocked by concerns of the coronavirus, this is the picture of some airlines today lufthansa up about 0.09% looking at the uk, the stock is

down the british airlines owner have said they are stopping flights to and from mainland china after the uk government said unless travel is critical to china, then it should be avoided for the time being trading slightly on the back foot there is spots of green on the board. some of the initial fears we saw at the beginning of the week when the coronavirus first emerges are subsiding. we have to see how the virus pans out coming up, the iphone makes a come back. record sales helps apple hit an all-time high. the firm has concerns as well about the impact of the coronavirus. we'll bring you more details after the break. the amount of student loan debt i have i'm embarrassed to even say

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be significant if the virus persists for a long time sales have been lowered. 40% drop from hong kong. but they still managed to post record top and bottom line numbers for the full year. we have more details how has the market been reacting this morning >> it has been a wild ride this morning. the stock started at the bottom and now it is at the top with other luxury groups. first, a record set of numbers like you said but a slow down. we see from q 4, it was a bit of a slow down. the money making machine of lvmh, the leather and fashion is up 15% but down from 20% in previous quarters. we see a bit of slow down.

some say normalization in the luxury sector. other segments of this business like perfumes and cosmetics or the wine and liquor were much slower, up about 3%. so a mixed picture here. hong kong giving a big hit with a 40% sales drop but so far, this slow down has been offset by mainland china. we know this is crucial to the luxury sector. now due to the epidemic, there is a question and worry of what could be an impact for these luxury groups and exposure to china. lvmh is a bit more shielded than other brands other brands are more exposed to the chinese consumer

the spread of lvmh helps it. and with tiffany, the massive acquisition, you could see this could give a healdge in 2020. >> do you think they've identified as the exposure to china being a bit too much and with the tiffany acquisition what do they have to say about the more mature market in europe and how are things shaping up there and could that offset the

weekness >> 90% of that growth came from the chinese consumer the opening workshops in europe and in u.s they are struggling to meet demand in the u.s. markets the less reliant footprint to make it less bumpy for this crisis >> it is a good story. the stock was up 50% last year we are seeing a good reaction this morning that was our cnbc france correspondent. apple has reported a return to demand beating top and bottom line forecast. our tech reporter is here with

more details break it down for us >> reporter: it was a big turn around from last year when apple downgraded their return. you saw chinese revenues up 3% very much what we saw in all of these categories with the iphone, revenues up 8%. the slow down in handset growth. complimented by 17% growth in the services division. while that did miss, that shows apple continues to mondetise th base they were dismissed by the market but the apple watch and air pods and certainly the market cheered all of those.

the concern is around this guidance between $63 to $67 billion. because of concern around the coronavirus. tim cook did say some of its retail operations ahad been affected and some manufacturing had been shut down overall, a good earnings report and risk around the coronavirus going forward. >> absolutely, big questions being answered joining us, the global sector specialist argin will join us as well it feels like a year ago we were discussing whether apple had reach the the peek there was concern that it would be difficult to grow the ba backside of that business.

the vision has focused away from handsets et cetera the growth is strong there >> absolutely. high growth. we wouldn't have expected that, particularly when we have 5g coming they were worried there would be a pause in demand. apple clearly defied expectations and now expectations are high for the iphone 11 suite. that is a high bar going into the next two years >> can i talk about the consumer mindset of the iphone buyer and user one of the concerns expressed was that iphone 11 was very expensive. that didn't seem to be the obstacle and the 5g coming in different markets, will that lead in a

different view to say, we've got to get a hand set? >> they cut prices to that question >> that's the key point. they cut prices on the 11 suite. the cheapest has been the most popular. there has been downtrading in that mix 5g does sh reaction, the ultimate use case for 5g has not been proven yet. roll out is patchy so the market will be thorough in china but the chinese 5g market will be very competitive with chinese manufacturers bringing out cheap 5g handsets >> the thing about the chinese market, we saw a growth there. do you think that can be

sustained in terms of the fundamentals of china, can apple continue to grow >> that is a big question. if we look into next year, there are a lot of handsets coming into the market. they are competitive on quality and price. that will make it a tough market for apple. they have a niche in the market. thatis a good turn around for the business >> what do you make for the turn around they seem to be relatively upbeat and say they can contain the move is that good for anyone who actually owns apple stock out there? >> it is to be expected given how the iphone 11 has performed already. the range is wider than usual given the coronavirus but higher than what people are expecting

showing bullish sentiment for the country. it is reassuring for investors how that valuation is, is a question >> we haven't talked about the services side of the business, which has received a huge amount of attention in the last 12 months do you think what you see bares out the hypothesis that services will continue to grow this company? >> it was quite low. it was expected to be 20% and came at about 17%. it is still high teens growth, which is still relatively impressive the question is what the profitability will be. there is a lot of questions within services and the mix is pretty uncertain >> you mentioned apple tv plus,

is that a risk for you since they are competing with disney plus and netflix they'll have to invest a lot of capital to bring success to this business with no guarantee of hits would you say that is one of the biggest risks right now for apple? >> it is not the biggest risk. capital will be put into that but they have a lot of cash to spend. it is a competitive market and it is not that profitable at the moment that is the head wind but i think what they are trying to do is more around the eco system making the apple platform more attractive it is a good thing >> it is about $200 billion sitting around in terms of cash. >> they are sitting on a massive cash pile, they can afford to run it down a little bit >> thank you for your time this

morning. paddy flood, global specialist in technology as well as our tech correspondent in town from china. coming up, novartis tells cnbc that a coronavirus vaccine could take up to a year to develop. we'll have more from his interview after this break ♪

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>> very low rates don't help us. you have to look at pluses and minus. in the uk, we are focused on the profitability. the transformation will take a couple of years. >> european chip makers higher as the chip maker beats profit let's look at how broader european markets are fairing this morning apple was a big performer last

night up more than 3%. sending positive tremors to european stocks. some of the property developers are at the top of ftse we are getting the fastest house price growth since 2008. the dax slightly below the flat line here. cac is up and ftse mib up. let's look at how currency markets are fairing. we had a strong performance of the dollar we have euro trading on the backfoot no surprise trading on the dollar around 1.10 it looks like we are close to breaking that. the bound close to 1.30 as well. tomorrow, we have the bank of england monetary policy decision

and press conference it will be the last one for the outgoing governor mark carney. there is a lot of hints they may be inching towards a rate cut. a big meeting to watch out for out of the uk tomorrow the picture is mildly positive today. s&p down, nasdaq seen higher after a higher session yesterday much the big event, this afternoon, will be the fed meeting. no one is expecting any movement on interest rates but we'll be watching out for the language and whether or not their assessment of the health of the u.s. economy has evolved in europe, novartis shares are higher a new gene therapy has helped. julianna tatelbaum spoke with the novartis ceo

did he acknowledge any challenges or causes for concern perhaps he did not flag? >> willem, novartis continues to move from strength to strength q4 was no sepgs. they raised their gierd euidanc the year in the fourth quarter, income rose 13% to $2.99 billion. innovative medicines is the key focus. this business performed very well and saw core margin improve which is one of his key focuses as ceo they delivered their 2020 guidance today, which the market has received well. net sales expected to grow midsales to high sales expected to grow high single

digit to low double digit. this is their block buster gene therapy treatment. they did see some solid results from the roll out. i asked him about the look ahead for this gene therapy drug with he could see positive improvement and they could look to roll it out in other parts of the world. novartis is not in the business of vaccine development but he has been very involved in the past, leading the way in the front line for the treatment of h1-n1. i asked him about his perspective on the coronavirus >> we have been assuring our associates have the right steps in place i would say our global supply

chain, we've done careful evaluation and we've been careful to deliver medicines in china and globally we feel very comfortable we don't see any disruptions for the coming months. we'll continue to monitor that more broadly, we have to keep understanding the virus and understand the overall transmission rate, fatality rate a lot of data is coming out. publications to understand this virus. the reality is, it will take over a year in my expectation to find a new vaccine for this. we need to use controls to get this situation in a better place. >> it feels like these type of things keep happening. we had h1-n1, the swine flu. is there something the pharma industry should be doing to try to get ahead of this or be more prepared to deal with them

>> yes i had the opportunity to work on this for many years. when these things happen, there is a lot of interest and opportunity. then we go back to a place they are not happening and everyone looses interest. the question is how do you keep the investment in place during the troughs of interests there is an organization called sepi that is working on this to bring various parties together it is a challenge to maintain that funding i think governments need to maintain high levels of preparedness regardless of an outbreak that is a continued challenge we need to take seriously >> that is the ceo of novartis weighing in on coronavirus looking back to 2019, one of the key concerns for investors was

not the actual performance of this company but around the culture of the company in august, it emerged some data or allegations around data manipulation noef novartis came out and admitted their mistake. it has raised red flags for the investment community around the integrity here today, they have announced the introduction of some esg targets for 2020 they are making a huge effort to show the market in a tangible way that they are striving to improve their ethical standards and fulfill what a lot of the investment community is demanding. like we heard in davos, esg, a huge focus for novartis as well.

that could be a catalyst for this stock a reentrance for investors that were detoured. judging by share prices, once again novartis has delivered >> thank you for all of that. the coronavirus continuing to spread around the world the uae has reported its first case germany reported its first human-to-human transmission. those were located in bavaria american airlines are looking to

stop their flights to the area and european companies are implementing their own measures. british airways will halt flights to main-land china ab inbev is suspending production at the brewery in wuhan and has no scheduled date when it will resume. to our guest, airlines closing, governments talking about travel being dangerous. what is the immediate yamedium y to look like >> it is pretty obvious, it goes to consumption numbers for q1 are going to look ugly at some point looking at the activity in q2 or later or something more

permanent. if history is any guide, we had a couple of experiences in the past 15 years. usually this is recovered in subsequent quarters. >> obviously coronavirus is one of those black swans no one anticipated. we are seeing companies and governments respond. one of the other bigger questions is the trade trajectory this year 2019, if you look back the number one story, the narrative people talk about is the slow down and trade growth, that alone, if you strip it down, how would you say the trade outlook would look now >> a little better for 2019 but not far better it is a fragile deal the chinese have to purchase a lot of goods

they would manage to purchase a lot of these americans would show patience. they will also start talking about a phase two. 18 months ago, we had zero tariffs on the imports today, these tariffs they still remain in place >> that remains a big constrain on import and exports. that means trade eventually recovers but not to where it was in 2017 or 2018. >> one of our panels, she said something interesting. she said if central banks had not acted last year. we have interest rate cuts from everyone, the fed and central banks that followed, then growth would have been about half a percent lower. this is coming at the time where

the conversation has been has monetary policy reached its limit? is it inevitable we'll be getting into a rescission at some toipoint in the next 12 to8 to 24 months it could be coronavirus, trade or some other unknown element? >> not necessarily i think there is room for the cycle to be extended further you need good conditions that leads to some sort of a default cycle. people lose their jobs and eventually you get the recession. if rates are retained. you move to get a recession. the consumer is in the shape to again extend the cycle we need central banks to

maintain what we hear is that they do not want to be the only game in town if you want to avoid the recession, it should be good to avoid the spending in the system which would at least postpone the idea of the economic contraction in the next 12 months >> the chief economist from a private bank huawei has been invited to participate in the 5g rollout in the uk they will face some restrictions on sensitive parts of the network. the two leaders agreed cooperation between like-minded countries to diversify the telecom chain market

coming up, the last hurrah for mark carney. more in a few moments.

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welcome back the senate majority leader has told his republican colleagues they do not currently have enough votes to block witnesses from president trump's impeachment trial. the fight over possibility appearing reached a fevered pitch after sections of a book from john bolton went public saying aid to ukraine had been frozen and in the uk, mark carney will have his last meeting joumanna has a few more details. >> that's right. his last press conference tomorrow and a lot of questions of whether the mpc may or may

not do i want to take a couple of moments to go back and look at his tenure he took over in july 2013 from lord king. august 2013, introduced forward guidance this was new for the bank of england. they said they were going to keep rates on hold so long as employment rates stayed around 7% you may remember june 2014, that famous manson house speech where he said rates may come in sooner than expected. prompted one of the members to call him an unreliable boyfriend. that is a label that stuck with him for quite a while. it was unclear whether they were hot or cold and whether they were going to go ahead and start

hiking rates what happened, we know well brexit dominated the discussion. june 2016, the referendum happened shortly in august, the bank of england cut rates to 0.25% potentially one of their most controversial moves. they justified it in prog know ses of how they would react. mark carney did get his first extension on the job it was about a year later, they increased those cuts suggested a limited and gradual rate hike path in the future in reality, they only hiked once more in august 2018 back to 75 basis points since then, rates have been on

hold the economy has been running out of momentum. we are heading into tomorrow, the market is unsure whether they keep rates on hold or cut again. it is his very last press conference he will go on and wear another hat, that is at the un and have a role in climate change going forward. there are questions about whether they may or may not do tomorrow >> if you are a fan, don't worry, there is no action before then the fed chair jerome powell will be speaking. no change is expected. this is a good moment to bring in our guest, chief economists let me ask you, steve, when would be a good moment for them to cut rates in the u.s. and

why? >> i don't think they are going to cut rates in the u.s. this year if they do, it is because the u.s. economy is slipping into recession. they made it clear, they are not going to cut rates unless there is significant change in their outlook. that would mean negative employment numbers, which signals a start of a recession their big decision this year is the balance sheet and how they get out of it and end it and what comes afterwards. >> on that point, some people are saying they might make a technical adjustment so maybe racing it by five basis points not everyone is familiar with the money market rates but what

signals to the community that they are doing that? >> it is just a way to essentially draw in the amount of bank assets and grow the liability side of the fed balance sheet. the fed can grow its assets all at once. you can't really grow the balance sheet. in bank reserves are not really required at the levels at which they are they have to be compensated to keep their money there otherwise, money goes to other areas that qualify >> they have to keep growing their balance sheet now? >> stock, yes. do they have to keep growing at some level, no. they have to get to the point

they no longer have to continue to repo. they'll put in some sort of regulatory changes including statutory repo facility. the point of that is so that the banking system in and of itself could move reserves to prevent the spike you had in september >> i have a question for you about the u.s., we've got there impeachment trial going on clearly there are opponents of president trump that would like to see him booted out of office. that doesn't look like it is happening now so we wait until november how much of this is an inflection point >> whatever the outcome of the u.s. election, probably the congress will remain divided

why not a wage tax under bernie sanders is pretty unlikely to pass congress. it limits a lot the policy you can implement with the divided congress one important point for 2020 or 2021, the next fed chairman will be decided in 2022 who is president that could be a decisive element but a couple of years ahead. >> your comment on the political aspect and how closely the fed will be looking at that? >> the fed and politics don't really play out in an election year everyone likes to say the fed never cuts the fact is the fed does what is necessary. the beginning of this fed, especially with this press would like to do nothing the election itself, i've done some work. it is interesting, the market

begins to rally 60 days after an election they like a result one of the big risks coming into the election is a contested result that could be going on in the economy. it could add volatility going forward. i disagree i think whoever is on the makeup of congress. if trump wins, the senate will hold and there is a good chance they'll retake the house >> we've to leave it there sorry to cut you off thank you to our guests for joining us that is it for our show m umna i'joan bercetche >> and i'm willem marx "worldwide exchange" is up next. hi i'm joan lunden. with a place for mom.

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good morning in the u.s., it is 5:00. here is your "five@5." u.s. investors shift to earnings stand outs standing out most of all is apple posting the biggest profits. >> and asian markets take a turn for the worse as companies around the world respond to the threat trouble in the