i'm craig melvin. thank you for watching. ready. good morning, everybody. welcome to "street signs." i'm julianna tatelbaum these are your headlines european equities trade higher as banks slug off early losses travel and leisure decline and u.s. futures stay in the red uk prime minister boris johnson prepares to set a new set of restrictions with a 10:00 p.m. pub curfew beijing accuses washington of a bullying style and hul

began logic in the tiktok negotiations amid news china is unlikely to back the deal with oracle and walmart >> president trump says he will nominate a candidate to replace ruth bader ginsburg on saturday. sources say he met with amy coney barrett at the white house. let's get to the top story today in the united kingdom. the government is expected to announce a series of new restrictions imposing a 10:00 p.m. curfew for pubs, bars and restaurants and expected to do a you turn when it comes to work from home guidance raising the alert level to four. saying the risk of second round of infections is high or rising.

speaking to cabinet news, the government is working to ensure people continue normal life limiting social contacts >> no one wants to do these things or take these steps they are reluctant steps but they are necessary as we were reminded and you are reporting, the rate of infection is increasing. the number of people going to the hospital is increasing and we need to act >> is it is not just the united kingdom but when it comes to the focus, authorities will impose local restrictions for today as the french city battles a spike of intensive care restrictions in spain, requesting help from the army to help battle a surge in cases what does this mean for markets. let's take a look at how we are trading. we've got green on the board

a rebound after yesterday's brutal sell off. it was worth noting and the stoxx 600 plunged 3.2% working the worst daily performance. a bit of a rebound here not recouping the losses the dax is out performing alongside the ftse mib up 1.5% and the german index is the worst performer. travel and leisure was one of the worst performing sectors alongside banks. we are seeing further selling pressure we've got red on the board from iag down 2%. lufthansa taking another hit down 1.4, carnival a bit of news out of tui the company has slashed capacity to 40% of its normal winter season

bookings for the german travel giant are down almost 60% in total as travel restrictions continue to weigh. tui has lost 60% of market value said it is on track for an agreed government support packet airbus has warned it may not be able to avoid further cuts to avoid layoffs. saying the situation in the airline industry is worse than we thought already unveiled plans to shed 15,000 jobs citing a slump in air travel demand. let's bring in mark manduca from citi this plunge in the travel sector that kicked off yesterday has gotten a lot of attention and we are seeing further losses. what do you make of the selloff? are these concerns confounded?

you summed it up as worse than expected it is the lack of visibility half of all bookings are taking place in the last week before flight these airlines can't plan for their business of course no planning for a fixed cost asset base as the airline clearly is means worst than expected cash burn. why is this happening? you've got a nervous consumer, uk rules and fines changing rules tit for tat endorsement rules. this all leads to companies saving their ramp ups into what is the demand. this is like the mad hatter's tea party. as we head to one of the bleakest and bitterest winters on record for the airlines what more can they do?

that description of the sector paints a grim picture? >> it is hard to be optimistic going into the winter. what you are having is that most airlines lose money even in a good year, quite frankly given the recent round, we'll be disappointed on the cash side of the business cash burn will be worse than the street forecasting in the next couple of months as you emerge in calendar 2022 or rather 2021, you'll see another round of highly diluted equity raters. that will quell any enthusiasm we are seeing in the prior weeks. it is very hard in a fixed cost asset base when you don't have the demand to effectively stem

the cash flow. >> restrictions reported are not tied to the travel industry like cutting the curfew or imposing the curfew cutting the number of attendees for weddings why is this negative for the travel sector. >> if you can't sit in a restaurant, what would make you sit on an airplane with 180 people this all moves people back to being more ensue lat in the way they operate and that is less travel is europe different to other

regions. if you've got multiple borders and ways of explaining out the virus trapped in any one country causes a lack of invisibility causing a nonlinear demand as we go through those elements. >> for the tools that will travel they are ramping up in terms of capacity but hasn't been a game changer. are all hopes dashed when p it comes to those tests being used when it comes to the flying again these things all cost

money. you have to ask yourself what are the adoption rates, what are we going to charge for the supply when you charge 30 euros and it is actually 37 euro fare none of these solve for the real problem, which is, there is a virus which is forcing people to travel less. that brings it back to the fundamentals, which is there is no easy fix for this we have to accept the recovery is not going to be a 2021 recovery >> when we talk air travel, we have to make the decision between short haul and long haul long haul has been even harder hit. what is your take when long haul air traffic recovers to prepandemic levels >> one of the key routes people look for is the north atlantic that's the way you are making the 15 to 25% profit margins

the u.s. ahead of the elections have got themselves in the position this will not recover anytime soon prethe u.s. election we've kbon back into the wave of let's go home. that is being pushed out to the right. without that, it is hard to see how corporate recovers one of the major profit centers. i see recent weeks it becoming more of a short haul problem ask yourselves simple questions, who is going to book a half-time break with their kids given the bingo quarantine issues. it is not just a long-haul question it is a mix of the two >> have you got any strong buys or strong sells.

give them to us now. >> the issues we have in particular are surrounding around lufthansa we think they are going to burn more in the second half as much as 5.5 billion will they have to go back to the government again early next year as part of what is effectively more cash burn than they thought and did they raise enough from the government the first time around this is true for a lot of airlines in q 1 next year. cash burn will be bigger than expected in this space >> mark, thank you for being with us. managing director at citi. i want to bring you fresh commentary out of bafin. they've said the wirecard case has led to caution in the grenke case

in the spotlight after research has called to attention some alleged accounting issues and irregularity in this company they weighed in saying the case has led to caution in the grenke case saying it is an advantage that grenke is fully utilized by the united states. into now back to what is happening in the corporate space. suez has raised midterm targets defending itself from a takeover bid from violio. with a share dividend or share buy back the new strategy has shown tangible results quicker than expected a u.s. court has decided to expedite a lawsuit of tiffany

against lvmh over the take over deal a judge set the trial date for the start of january china called for beijing to block the tiktok deal that would see oracle and walmart become the new owners they describe the deal as robbery opposing to terms that would see americans take four out of five board seats and deny beijing to the source codes. continuing narratives with each player trying to spin the deal in a way that makes them look like the winner yesterday president trump yesterday on fox news said oracle and walmart would have complete control they said the chinese will not have anything to do with it. that's not 100%.

oracle came out and said americans will have the majority control and bytedance will have no ownership meanwhile, bytedance coming out and saying it would have 80% control. walmart and oracle will combined have 20% of tiktok global and bytedance will have 80%. this is how oracle can say americans will have majority control. look at the board. four out of five members will be american the final member will be the founder of bytedance, who is chinese. we look at the vc money. 40% of bytedance is owned by american investors if bytedance owns 80% of tiktok global plus, the 20% from walmart brings american ownership to over 50%. that's why oracle is claiming now that the new tiktok global will be majority owned by

americans. oracle and walmart don't see bytedance having a direct stake but the individual share holders having a stake bytedance views itself as having a direct state in tiktok global and doesn't separate itself. that's why it is saying it will own 80% stake in tiktok global and has said it will maintain control of the coral go rhythm and will not transfer any of that activity to oracle. when oracle and president trump say they will have total control, that's not true one member will be on the board and bytedance will have some stake in walmart as well this is where we stand right now. >> that was arjun speaking on the latest speaking from the bank of america financials conference

and has said wealth management clients most active in asia have picked up. giving some color. he says the bank has seen cash levels consistent with prepandemic levels very active again. over time, the bank wants to put in two-thirds of capital some color about how he's thinking and how activity has progressed in recent weeks so activity picking up in terms of transaction levels. we'll give you comments as they come in. >> bank stocks suffer heavy losses we'll discuss the long term implications, next give you my world ♪

♪ how can i, when you won't take it from me ♪ ♪ you can go your own way ♪ ♪ go your own way your wireless. your rules. only with xfinity mobile.

european banks are recouping some of the losses

documents allege u.s. and europeans have moved suspicious activity reports claiming to show jp morgan and ny mellon a look at the u.s. banks they were hit very hard. among the worst performers in the u.s. market. >> professor of criminology. they are suspicious reports. they are suspected cases do you have any sense of how many of these transactions do actually reflect money laundering and how many of them

are in fact, okay. no and nobody does in the sense they've got like switzerland, the banks are required to do a lot more investigation before their report when they report, they are frozen for a while until prosecutors make up their minds. in most countries in the world, they don't do that if the banks can't account for what the transaction is for, than just the easiest thing to do is to file the activity report and then it is up to the authorities to do what they want to do with it. the sources they have to do with that is very limited

most suspicious activity reports don't get looked at seriously. it is a difficult debate hereof who is complicit then the responsibility turns over to the regulator. banks have a legal responsibility to know their clients. in your view, who has been most complicit here the government or the banking sector >> hard to say it is not just the banking sector where they are regulated in the u.s. or canada but in the uk, lawyers make quite a few reports. not that many of them are really followed up. it depends on the jur isdiction.

there is no sense in making the reports in terms of finding stolen assets easier if nothing is going to be done with them. we need to think about them as an engineering problem the banks do need to know their self-s better. the states and the u.s. need to have more or less secrecy than they do around the world too it will be easier for people to make the judgement as to whether it is really suspicious or whether we are just wrongly suspecting people. there is also a big issue about fraudulent and other transactions not being suspected, which is the other side of that coin. >> can you give us more detail by what you mean by that last comment? >> you know, if you think about it, we've had all these anti-money laundering controls

since 1988 when we first started researching this people spending a lot of money on this process. how is it possible that all the frauds going on around the world with people impersonating other people and companies, how is it possible for people to be moving all of this money out of russia and china if we are picking this up and we are really serious about picking up who really controls our owns these accounts >> it is an indictment that system is not doing nearly as much as it should do otherwise a lot of these frauds and corrupt things and terrorism wouldn't be possible >> the uk has the most companies in this list made public over the weekend. what does that say about the uk

banking system are we doing things more wrong than other parts of the world? >> no. it doesn't ironically, the uk has got another report it does mean there are some strong weaknesses ifs that not too much of a contradiction in the uk to announce reforms of company's house controls which were trained before hand they had not been announced also, there are issues about controlling the use of the same address as a kind of post for lots of companies which still need to be addressed it does tell us how the uk has critical weaknesses including the limited partnerships the government needs to address

those even though businesses can play and it may cost them more money? >> when it comes to protocol, what happens when a bank suspects potential money laundering case. they are not forced to stop doing business with a client and in doing that, could it alert a client and then do something fraudulent that they are being watched? >> how do they get around that doing the suspicious activities at least slowing down business without alerting them to something? >> i think this is a contradiction. it is a criminal offense for the bank or the lawyer to inform the client that they've made a report but they have to find a form of words. whether that works, whether the

client is working it out and getting their normal service exiting the client all together is an am bbiguous thing. they don't want the banks to invest them because then they are being under surveillance and the banks or professional gets comfort in the form of a specific request otherwise, it is an irony made a lot up by the media. >> coming up on the show, we continue our coverage from the

goldman sach summit as markets try to bounce back from yesterday's selloff.

welcome back to "street signs. i'm julianna tatelbaum these are your headlines european equities slug off early losses u.s. futures are mixed uk prime minister prepares to impose a fresh set of national restrictions cabinet minister says the government must act hinting at new measure. >> if it is possible for people to work from home, then we encourage them to do so. beijing says they are unlikely to back the deal with oracle and walmart president trump says he will nominate a supreme court

replacement for ruth bader ginsburg on saturday after sources say he met with amy coney barrett at the white house. all eyes on boris johnson today, the uk government expected to announce the series. he is expected to put any curfew into mercedes raising the alert level to four saying the risk of second round of infections is high or on the rise. saying the government is working to ensure people live limited life >> no one wants to do these things or take these steps they are reluctant but

absolutely necessary as we've been reporting, the rate of infection is increasing. there for we need to act let's take a look at european markets now we've got green for every major region the main benchmark dropped 3.2% the dam was theout performer the german benchmark was up. banks and travel and leisure we are seeing continued pressure on a number of travel related names he is the managing director his word that this is an overall

issue and don't target travel specifically as part of what is driving these stocks lower a little bit of green looking at the flat open if these levels hold the dow looking at a muted start a lot could change between now and then le equities are in a, quote, dang ru market with a rebound and down side of a second wave tech stocks are exhibiting classic signs of a bubble risk joining us now, jonathan great to have you with us. give us more detail by what you mean by a kangaroo market. >> it has been a big year for

the market that trends side ways in the kangaroo analogy you have those powerful down side risks you also have the political risks. then you have this historic support and central bank liquidity and monetary combine and fax even hopes coming through. let's not forget, we have a path way of recovery and risk markets are kind of trapped in the middle until we have this break. >> it was some what surprising

given you speak to analysts and investors. heading into autumn with further restrictions it is a fragile market some sentiment of recovery is high it is hard to put those in the sector those are a shift back to the global growth in 21. i think we would have seen a much more aggressive view. we've seen some of that but i would have expected more in the market i describe it as a t plus zero

world where we are living real time with the must miniconsensus and the second day for the markets to gain again. >> let us talk about technology shares you are comparing the situation now to 1999. my question, when do you think the party will be over this time >> the late 90s was an explosive period for markets led by tnt. it was a slightly smaller group. a lot of investors are drawing analogies and there are a lot of similarities there are also some big differences. that research shows one of the biggest differences shows the

yield gap. if you take the 10 biggest companies back into the peak of the market, they have an earnings yield gap into the interest rates of minus five interest points. now that is the other way around now those globally are dominated by what i call the u.s. yield gap that is positive around 250 basis points so there is a 750 basis point gap. the cost of value or equity versus the cost of value or interest rates i see echos of the 90s absolute valuations look scarey. with he still see support here

technology is a leadership that liquidity remains a key dynamic and i don't think this will happen anytime soon >> we are seeing five-year expectation rising we don't see any movement. we think this will remain the case because central banks were enacted. that's a really good point because everybody talks about the inflation and the 40 years of megatrend and in the bond market and incredible bull

market our economists put a report out highlighting and suggesting that 40-year trend was at an end. while there is still near-term risks, we think there are strong reasons we should support a new rising trend over the next 10 to 15 years deglobalization is one of those. aging societies is another central banks are adjusting those targeting that should allow that to happen within the equity market, there has been this quiet trade already happening. it has been happening in europe.

the value trade that tend to underperform i suspect we need the first of the growth and much stronger pick up before those two bigger sectors which have lagged over many years now as part of the leadership group there seems to be a growing debate do you think this is the optimal structure moving forward >> no. like you say, there are other aspects out there. 60/40 with a risk of strong

returns. that is a sharp ratio. those risks have been excellent. you might get 11 basis points with risk evolving from politics, it is hard to see those yields as attractive from here the aggressive allocation with an extending period of repression likely to go on for some time i'd be advocating a 40/20/10 thank you so much. we'll leave it there thank you for joining us

coming up on the show, i u.s. supreme court battle brews with the u.s. election exactly six weeks away

welcome back president trump plans to put forward his nominee to replace justice ruth bader ginsburg on saturday sources say he has already met with amy coney barrett who is known as a conservative judge. >> reporter: with plans to honor justice ruth bader ginsburg under way and mourners still paying her respects, already the fight to fill her seat president trump plans to announce her replacement by the end of the week sighing it will be a woman top contenders, amy coney

barrett and barbara lagoa from florida. >> i'd much rather have a vote before the election. we have plenty of time to do it. >> by the time that vote comes up, close to 40% of people have already voted. it is a violations of the spirit of the constitution. >> mitch mcconnell has already promised the senate will vote drawing fierce criticism and allegations of hypocrisy mccon all blocked president obama's replacement. >> their words are no good it is enough to make their head explode. >> susan collins and lisa murkowaski have already said they are not for moving ahead. with few options to stop the

process, house speaker pelosi said everything is on the table. not ruling out another impeachment to hold up the senate >> justice ginsburg will lie in repossess here before lying in state on friday and saturday the first woman to have that honor. >> julie norman joins me now professor of relations senate majority leader mcconnell has been accused now of hypocrisy given the way he acted in the 2016 election now he's promised a swift confirmation of president trump's nomination for this replacement for justice ginsburg even if he does attempt to get this past the senate, what are the chances he's already

successful given that we've heard many are against this vote >> the way things look, the vote will probably go forward that is definitely what he is and trump is pushing for right now, there have been two defections it's looking like it might be difficult for the democrats to pressure anymore senators to defect in that way a lot of pressure on republicans to fall in step with the party to get a conservative justice on the bench. right now, it looks like democrats would be one or two more defections. >> what do you make then of the democrats vocally asserting they'll leave nothing on the table and do everything they can to retaliate to president trump and the republicans pushing their nomination through what can they actually do? >> the democrats know they don't

have a lot of leverage beyond this public pressure they are saying, okay, does this go through, that will increase our options. it may be taking actions regarding the electoral college. all of those things require the democrats taking back the senate in the election. that's a big if. they are hoping val beganize their base saying, okay, we might be able to stop this vote but we'll push through other things especially with the democratic side of the party and that they feel grieves with the way they are going and that democrats will stand up as well. >> given to how we might see a gal vanization to the democrats

and republicans. going further on this court packing issue reviving the talk. what would be the big implications if they decide to go down this route >> it is important to point out that this is not a position biden has come behind. he has not expressed any support of expanding the court numbers if the democrats took back the senate, they would place perhaps two or more additional justices who would be liberal to try to counter balance the liberal tilt of the court that would give them short-term balancing. it opens up a lot of long-term question marks could it again make it even more conservative the court is always going to have this back and forth

depending on who is in power and zpanding the number brings some short term but still keeps the same questions open. >> back to what this may about e mean for joe biden securing the election the democratic party choosing the nominee is that not all democrats are enthusiastic about him. now with the supreme court firmly in focus and issues that do matter to so many americans like abortion, like health care, if there is any dispute over the election itself. what is your take on whether this can take to galvanize supporters reluctant on joe biden to this point? >> that's very true. what is happening is bringing back a lot of those key issues in the debate which have been largely quiet.

abortion, health care, immigration, a lot of these issues will come before the court. democrats are hoping many younger voters, women voters who are not so enthusiastic will want to step up now because we think these issues will be on the table and make sure the senate race will go in democratic behavior. this is a very big boom for republicans as well. many conservative voters who may not had a favorable view of trump, what happens now is, do you support conservative values or a conservative justice in the race it will galvanize things more for this year. >> a line out of the playbook we saw president trump use with brett kavanaugh in an attempt to unite those conservative voters.

we talk about the impact of him doing this, how many votes are we talking about here? how many voters are there that sit in between in this swing position they are conservative and unsure where to go here >> significant number of those voters if not undecided who they would vote or if they would vote or not importantly, in the u.s. is where those voters lie a lot of those are in key swing states in midwest, wisconsin, pennsylvania, michigan what's happening right now will force the issues in 2020 and have

lowered trump's standings in the polls. >> we are closely watching how congress reacts around further stimulus there are concerns this issue will take attention away from lawmakers when it comes to further aid before the election. how do you think that will play into the election result >> we already see this happen being. that has completely shifted the attention and the talking points away from the economic crisis and pandemic away from the protests other things dominating really up to this point have been sidelines by this current process we are seeing. of course those are very real and tangible for many americans we are seeing most americans caught up and worried about their health, jobs and economy

and trying to keep the focus there. it will be a tough struggle moving forward with this current occupation >> the professor of politics and international relations. you've got a little bit of green for the nasdaq you've got negative numbers now for the dow jones about 60 points lower looking at a plot start for the selloff. that's it for today's show "worldwide exchange" is coming up next where all of our market coverage will continue stay with cnbc, we'll see you tomorrow so you're a small business,

or a big one. you were thriving, flourishing, but then... oh. ah. okay. time to think, plan, pivot. how do you bounce back? you don't, you bounce forward,

with powerful connectivity. serious and reliable internet that lets you go bigger and better, with more sharing, more making. whoa. more that. more talking. ... the entire time, you got this! okay, less talking and more doing. all driven by the largest gig speed network in america. and even if the power goes down, your connection doesn't. but what if no one's in the office? bring the office to them. but is it secure? sure it's secure. okay, sounds great. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

it is 5:00 in new york the september stocks steams on technical levels get breached. call it the tug o war. we'll layout both sides of the market and the rational of each. see what ubs market has to say we want to hear from you elon musk takes to twitter to ease concerns ahead of the first ever battery