mixed with tons of imagination. "warning: parts may fall off." real or make-believe... these guys are on our side. [explosion booms] >> [groans] >> there's one. definitely felt that one. >> yeah, that one was worthy. brand new trading week here in europe as the stock market opens up for action. we saw last week a reversal for european stock markets down. what we are expecting this morning is a give back of some of the territory the signals have been weak, particularly the german stock market signals have been weaker on

futures, big corporates with news flow in particular sap. the guidance has been disappointing for that stock so we're watching implications there. but a number of themes for investors as we look at the opening signals on the benchmark, investors eyeing the u.s. trade and whether we get any progression on stimulus this week, counting down to the u.s. election and we have tech earnings, that's a feature of the market where we're seeing a k-shape on markets also-to-driving the u.s. stock market forward we'll eye the earnings to see if it justifies what we've seen since the start of the pandemic we've dropped more than 1.1%, that's a big reversal from the

.6% gained on friday you can see from the amount of red on the market it's fairly deep in the negative territory on the market. oil and gas 2.1% lower, this is reflecting the spot prices we're witnessing as we talk about coronavirus cases, we've been assessing the impact on demand for oil you can see as we go through this process, a second wave of infections, more lockdowns even though they're localized, they're severe across a number of regions in europe, that is having an impact on the view on oil demand at this point right towards the bottom of the stocks markets this morning, along with banks, 1.8% reversal there. bbva, those stocks are the weakest in the basket today. we were seeing a little bit appetite around the blue wave theory there there could be a

democratic sweep in the election that could be positive for commodities you can see overall the sector trade is weaker, everything is reversing. the big french names are towards the bottom of the basket travel asia, it's been weak and the third worst performer on the charts today retail baskets down 1.5%, industrials down 1.3 chemicals same story as well, every stock in the basket is int we have now dropped below 5,800 points we did get back up to 6000 at one point. we're down 1.1%. so that's a weaker trade for the stock market 1.25% stripped off on the periphery we have selling of more than 1% on the italian market and on spain.

if you've been watching the program you're hearing about the fresh restrictions that have gone into place in these two countries. the smi in zurich is down .75% we're waiting on a signal on the dak, .8 in the green is what we had. but waiting for a different view this morning as the market reacts to a number of corporate updates but also from sap. i want to get into detail on this one it is down fairly mighty, 19 plus reaction. signals were suggesting we'd5%,s exceeded that in market reaction now we are negative for the year, down 25% for the last three months alone smaller window has not proved positive for the stock sap has cut business for the

year the pandemic reduced them on pressures would continue in 2021 the german software giant had a fall in revenue also investors are eyeing the acceleration of digital as a theme for many businesses but as they got the update for sunday investors, it's been a shock to the psychology, this update from sap and you see a swift market reaction this morning. >> yeah. it's the biggest fall of the shares since 1992. and that tells you the whole story. one analyst saying paradise has been postponed meaning the profit ability targets of sap are nowhere in

reach. big mcdermott said it was ambiti ambition, aiming to increase profit margin 1.3 each year, now there's a reversal of the plan now they're saying the cross income margin will drop by as much as 5% by 2023 so it's a complete reversal. a lot more negative than anybody had expected and that is one reason, of course, they might be a bit late to shift into cloud, perhaps their competitors are better in doing that and apparently it would cost them a lot of money and the cloud solutions are not as profitable apparently as others. when we spoke to the ceo today in the morning he was trying to defend sap's position and the outlook. >> when you look at our cloud,

yes, there is a downward trend and it's only related to our spend management category. so to concur, and again in this crisis, business travel is obvious down we definitely expect because concur is the market leading solution this will bounce back next year after the crisis, no doubt about that and the rest of the business is doing well when you look at rates of over 26%, which is above the level of our competitors. >> so clearly cloud is the future for sap, but still they're doing a lot of business with license revenues and software license revenues are down by 25% in the last quarter because client are postponing big investments. that's something likely to stay. looking at how covid is developing and that is why the first

quarter of 2021 will be extremely interesting when we are going to see how many clients will renew their contracts when it comes to software licenses and also how much companies are willing to spend, because also at that point in time, a lot of pandemic support measures in many countries will run out so the question is how many medium and small size company can actually afford to invest a lot in i.t. going forward because they have a lot of cash to be used perhaps elsewhere and demand might not be very strong given the crisis. so i guess sap currently is in a very weak spot and we are seeing that violent market reaction with that, back to you. >> thank you very much let's push on this morning and the stock is down about 2.5% it has announced extended cutbacks as the pandemic continues to weigh on global travel

the airline said it would ground 125 more aircraft than originally planned during the winter months and employees would be put on a government sponsored reduced hours scheme scaling back operations was unavoidable they said. trading down .6% i wondered if we would see a new price, it is set to buy a u.s. gene therapy firm forasmuch as $4 billion, the german drug maker will pay $2 billion upfront but could pay another $2 billion based on future success milestones this comes as bayer has the legal troubles over its round up weed killer. carlyle is reporting nearing an agreement with siemens to buy

binder for around 2 billion euros. carlyle had reportedly outbid other private equity firms after sie si siemens requested final offers last week. we did see a fairly significant drop in the spot price this morning and this is how it's playing out across the oil companies. also just extending losses from last week. you can see 1.1% of bp selling for 1.6% of shell, but that's the weakest performers of the majors, down close to 2% let's get to brian nick, thank you for joining us i think we're all counting down to the u.s. election now, just over a week to go and certainly very exciting as we watch the early votes that have been cast

at the ballot box but also some of the polling at this stage give us a sense what the markets are likely to do over the next few days >> thanks for having me. one thing we've pointed out this entire year is that the 2020 election seems to be impaired by investors learning maybe the wrong lessons of 2016. so the market reaction has been relatively muted we haven't seen big election related swings in bond or stock markets in contrast to 2016 when it felt like markets were along for a ride for a bit i think you've seen so far the market is reluctant to price in any outcome given how surprising the outcome was in 2016 so there's a lesson in the last election maybe a little with the weaker dollar in the last couple weeks, showing maybe some higher inflation potentially after the

election if there's a big fiscal stimulus but so far not a big move in the market based on what we're going to see the next week >> we saw that roller coaster session play out in europe and then in the united states as we saw the election result. so this time around are you saying come the 4th of november the markets could also go on a roller coaster ride as you see full pricing in on the election results. >> i think it's we find out the results of the election on the election, i think people are expecting it could take a while to count votes, states could be contested in courts. the likely idea is we'll know sometime on election night or the next couple days as the some of the latest votes come in that have been mailed in. i think the markets could react in either outcome. what we'd be looking for in the

event that former vice president biden wins is probably better performance from some of the renewable energy names things that could be part of a greener infrastructure, green energy, that's one of the moves we could see in the subsequent few days >> brian, we're seeing a brutal sell off under way this morning, and i don't want to read too much into it given we've had a few minutes of trade already but in terms of how the markets are thinking about the rise in virus numbers in europe and the new restrictions being imposed over the weekend do you think that markets are concerned that we could test the lows from an economic perspective that we saw back in april? frame for us the risk that we are now facing in europe as a result of the virus. >> sure. i don't think from an economic perspective it needs to get as bad as it was back in april. i don't think we see that pure

doubledip or w shaped recessio returning because we're able to treat the virus better, the testing is in place. but i think it's treating it differently than the rise in u.s. cases over the summer one of the reasons the fiscal stimulus was still in place. certainly consumers is rightfully afraid of contracting the virus maybe not going out and doing as much spending outside their home we had fiscal stimulus in place, aid to small businesses n with trouble operating, enhanced unemployment benefits, that's not in place in the u.s. now so the economic impact we could see as result of this wave because we don't have the safety net in place, at least here in the u.s. >> interesting so you think that the pessimism or the concern is really linked to the lack of reassurance

around more stimulus out of washington does the same apply in europe? concern around more stimulus should the situation worsen? do markets want to see more stimulus by national governments and even at the european level >> i think absolutely in europe you're seeing signs that there's just, first of all, a better structural safety net in place for individuals and then these schemes in place to support businesses in lockdown in the u.s. we don't have lockdowns that are as strict but the paycheck protection has expired. the stock market has been held hostage to the drama in washington whether something is going to be passed but looks like nothing is going to be passed before the election certainly not until tnext year.

we could see a net job loss in the fourth quarter in the u.s. >> this is around food security, spent most of last week driving around the country side. you can see there are trends that have changed now, people buying more food, staying at home, concerned about supply chains how do you play that theme in europe >> one thing we look at is farmland for investors who can access, you know, large diversified portfolios of farm lands. one thing we manage is this type of asset if you play a defensive trade that's linked to food security that is diversified because of potential supply chain issues this is one way to put it into work some of the more consumer goods nam names tend to be more defensive and pay a higher dividend yield

as well. the consumer names have been well supported by the fact that consumption has led us out of the recession. >> speaking of which, what does it mean for the technology names, some massive players in commerce, counting down to the holiday season where it seems they reinforced their market share, what do you think the guidance will be from the players that are positioned well in e kmerecommerce? >> they're an inverse of other companies during the worse of the coronavirus epidemic, a lot of the technology names outperformed because they're more leveraged or benefit from a society that people are doing more shopping online as we move forward, as the market becomes more hopeful of a vaccine, equity markets look forward to that in the second half of next year, perhaps at the earliest we think. that is a potential source of

risk for the technology companies. if things get back to normal you have a more broad based rise in earnings that said i think you'll see relatively strong earnings from tech companies this week as we have during the entire period. we're focused on the forward guidance and earnings outlook. that's been brighter overall for the market so we've seen investments rising as we go through earning season investors are probably more focused on this time next year than what's going on at the moment >> brian, we'll leave it there. appreciate you joining us this morning. brian nick coming up on the show. astrazeneca resumes its coronavirus trial in the united states find out after the break what other pharmaceutical giant got the green light to restart its trial.

europe's competition commission is set to decide today whether to approve lvmh's bid for tiffany. they would clear the deal or open a four month long investigation to address possibly concerns. the two giants entered into a battle after tiffany accused its french partner of stalling to approve. they said tiffany is not the high brand it was when proposing the takeover nearly one year ago. coca-co coca-cola's partners have approached its european partners over a $6.6 billion takeover they pointed to a prolonged recovery from the pandemic and an uncertain outlook over the next two years shares rose as much as 16% after the proposal was announced the bank of england is

mulling a proposal for banks to resume issuing dividends this year this is according to the times and a deal that would allow them to make payouts. major banks agreed to suspend payouts earlier this year vowing to pressure from the boe which imposed restrictions in april effectively banning the payouts. astrazeneca has been given the green light to resume. the pharma giant paused the trial in early september after a participant in the uk fell ill meanwhile johnson & johnson is set to resume its trial today after a patient in its trial also got sick. the vaccine did not cause the volunteer's illness it was determined the u.s. sets another record

in daily coronavirus cases, and another white house break out, this time involving the vice president. we'll have more after the break.

your headlines, shares in sap plunged to the bottom of the dax, the worst decline since 1992, wiping out $32 billion in market cap after the german software firm scrapped its 2020 outlook. >> as the ceo i have to be focused on the long term value of this company, so i cannot equate the success of our customers and the significant revenue of sap stocks set for the worst session since march, oil and travel impose steep losses italy's new virus restrictions on bars and restaurants and

gyms >> translator: if i were on the other side today i would certainly have reason to grieve. i too would feel anger towards the government's measures. however i say wait and see what the economic measures are that we decided on. >> u.s. futures under pressure as america sees a weekend record rise in cases while vice president pence stays on the trail despite a number of his close aides testing positive the stock markets here in europe have been open for half an hour so far and we are witnessing some deep red ink on the boards we've minimized the print on the stock 600 but we have slumped heavily on the dax, 2.2% drop there, versus .4% for the footsie. so a divide taking place between

the individual markets, the french market down .9% some of the german down to the fortunes of the sap today. let's get into the sectors we have a little more green moving onto the boards we've had no green at the start of the session but now health care has popped up, just over .1%. tell comes, food and beverages, utilities, just down moderately versus steep losses suffered in the technology sector. what that suggests for the technology earnings later this week as they come out in a cascade later on but that down 4.5% oil and gas in a negative territory given the spot prices of 2 to 3%, the market weighing the covid restrictions and the impact demand for oil. as autos tracks closely behind

in terms of stocks this is how it plays out on the big boards sap trying to trim some of the losses it was down as it scrapped its midterm targets and guidance and changed the short term numbers as well 2.6 down in the travel space as we continue to see the problem with the second wave of infections that's down 6.7% you have a covid win erin the green, hello fresh it's bound 2.5% arista bank, it is up more than 3% jul juliana. >> let's look at u.s. futures and what kind of open we're in for for wall street. we have futures pointing to a weak start,do dow looking at a 0 point drop we did see levels improve with the dow and s&p. and the nasdaq breaking a four

week win streak. so the weakness set to continue. stimulus in focus for another weekend and the last week of the presidential election if that wasn't enough, tech is firmly in focus with a number of key earnings set to come through karen? >> we are just chasing some comments from the uk health secretary there was some reporting on the weekend that nhs, front line workers may be receiving the vaccine soon there are big hopes built up in the press, and now the health secretary weighing in, saying the vaccine we're not there yet on nhs staff having it so just pouring cold water on the expectations expects the bulk of the roll out for 2021 it's not a store for 2020, it's a 2021 story for those front line workers

saying don't forget the idea for some of this year. says on the vaccine we want to be ready, that's not my central expectation that hospitalswill have it this year. we don't know when it will be ready. goes on to say we're working on how it will be rolled out, doing logistical work with the nhs, having stuff to roll out different things says so effectively this is a response to some media reports i want to get you back to the astrazeneca comments it was fascinating as you pick through big and frequently used words when it comes to vaccines but new to us as an audience saying the body of evidence for safety is there as they're going through the trials saying the early safety data says the reactor was lower in adults i was gathering that was the response on fevers, suggesting that maybe you don't get such a

strong response in outbreaks on fevers in the older adults was that your takeaway as well >> i think it is early to draw conclusions yet as to the data for astrazeneca given we are waiting still for the full reout of these phase three trials. we did get the piece of big positive news early this weekend sometime on friday breaking that astrazeneca has resumed its trial in the united states but certainly the latest report from the financial times that you referenced there is supportive of the university of oxford vaccine i think the comments from matt hancock are also a good reminder when it comes to the rollout of these having a sevaccines it's sequential and take a number of months at the least that we are likely to see a phased rollout where hospital workers and the most vulnerable are treated first and the greater population

treated later. bringing it back to markets, is that enough for markets to really take off if we see the most vulnerable exposed parts of the population vaccinated sometime before the end of the first half of next year. is that a bullish indicator? is that a bullish move for markets? and those comments from matt hancock, interesting to see he felt the need to come out and comment over the weekend around where the uk stands in terms of preparedness in terms of the numbers themselves, the u.s. reported nearly 90,000 new cases in the last 24 hours, bringing the total number of infections to almost 8.7 million after the country saw a record rise in cases on friday as outbreaks continue to flare up across several states several aides to vice president -- close to vice president mike pence, including his chief of staff have tested positive for the virus but pence

maintained his campaign plans over the weekend with just over a week until the november 3rd election kelly o'donnell has the details. >> reporter: the vice president's mask, tonight an outward sign of another covid hot spot at the white house. >> north carolina is trump company. >> reporter: at least five pence associates are covid positive, including his chief of staff, marc short said to have mild symptoms. >> i think he's doing well hopefully the prognosis will be good. >> reporter: political adviser mar marty ops and others unnamed aids say pence and the second lady tested negative again today so he headed to north carolina top white house officials defend that choice calling candidate pence an essential worker.

under cdc guidance essential workers should wear masks but are not required to stay home for 14 days. >> we're talking about essential workers going out and campaigning. >> reporter: today the president got up close with many maskless voters in maine. while in new hampshire -- >> you know who got it i did. >> reporter: the president said nothing about new infections on pence's team while ignoring evidence covid is spreading. >> we're rounding the turn, even without the vaccines we're rounding the turn. >> reporter: trump chief of staff mark meadows conceded the white house is focused on treatment not prevention. >> we're in the going to control the pandemic we are going to control the fact that we get vaccines, therapeutics. >> where aren't we getting control of the pandemic? >> it is a contagious virus like the flu. >> the united kingdom has

reported more than 42,000 new coronavirus cases over the weekend. some areas in the north of england where infection rates were highest have moved to the strictest level of prevention measures the british government is considering reducing the current quarantine period of 14 days. >> france's scientist advisory body said it believes there's around 100,000 new covid cases in france after the country officially reported a record of over 50,000 new cases on sunday. the french government expanded virus restrictions over the weekend and extended an overnight curfew to include 38 new regions. emmanuel macron said the measures could last six weeks with france becoming the second european country, after spain, to mark 1 million cases. spain has also introduced a nighttime curfew after declaring

a state of emergency last week the country became the first in europe to surpass 1 million cases. the prime minister warned that while this does not mean a full lockdown, people should avoid close contact as much as possible >> translator: the battle we already know will be difficult but with social discipline, resistance, unity and a spirit of victory we will achieve it again. there is no total lockdown in the new state of emergency but the more we stay at home and the fewer contacts we have, the more protected we'll be and the more we'll protect our loved ones and the health of our society. we don't need to approve measures to do what we need to do, we know what we need to do less mobility, fewer contact therefore, let's stay at home as much as possible >> italy's tightest restrictions since may take effect today. bars and restaurants must close

by 6:00 p.m., all gyms and theatres will shutdown completely restaurant and bar owners have been protesting the new measures but the prime minister promised the government will support the hospitality sector or the. >> translator: if i were on the other side today i would certainly have reason to grieve. i too would probably feel anger towards the government's measures however i say wait and see what the economic measures are we decided on because i believe they're adequate economic support. the protest is there but what i can hope for is to be careful because there are some groups, an tag nices trying to fuel problems >> whether they should reduce the amount of time for quarantine if you come in

contact with coronavirus from 14 to maybe 7 days, what do you make in terms of what you're seeing there whether the population is willing to accept new restrictions having been through a severe lockdown? >> clearly people are not as keen as they would have been in the beginning to accept to be locked up in their homes clearly the toll has already been taken in terms of the economy and as well as personally people are tired of having to deal with all of these measures and all of these limitations so it's very difficult right now to accept and to digest that there are new measures but this is the new measure that have been imposed just in ten days and these do, in fact, actually finally really make a difference because bars and restaurants that have to close at 6:00 is going to impact a lot of workers, a lo of businesses. so people are getting very frustrated theatres and cinemas are closed,

gyms are closed, and high schoolers are required to stay home, at least 75% of them have to stay home so only 25% can be at school at one time the intent of the government is to try to keep people at work as much as possible in their offices and the businesses that can operate that are not tied to hospitality, of course and they do that by leaving the younger children at school but again, this still is quite a severe limitation. also because they have -- the government has urged people to only leave their home for work, for school, for emergencies, to not take public transportation some regions, like the one i'm in, has also put in effect a curfew from 11:00, so you cannot circulate from 11:00 in the evening until 5:00 in the morning. and it is expected that more regions will adapt these measures as well so it's a very difficult situation right now.

because they're trying to avoid the full lockdown, giving a lot of suggestions as to how you should be behaving but not everyone is going to comply. so this will make it difficult to keep the contagions low or to reduce them in any case. the new infections registered yesterday 221,273 that's a number growing quickly putting the health care system under pressure right now the feeling is the government is trying to save the economy, trying to keep the number of cases from exploding, but they're really grappling with a situation that seems hard to manage but they can only do this for the time being. we have to see how things work out in the next weeks. this is in place until the 24th of november. hopefully we will see some lowering of the increase in numbers of infection and we'll be able to then pull back a bit.

otherwise, they may have to actually step up on these measures so it really is concerning, especially for cities like the one i live that really depends on hospitality and business that resolves around fairs and conferences and shopping and travel, restaurants and bars so milan is going to take another very big hit because of these new measures remember that milan alone and the area of milan counts for 13% of italy's gdp definitely the big cities will take a hit back to you for now. >> thank you for that report and in this week's our new future segment we're looking at how covid-19 has impacted the future of the health care system the global ceo of fugi film told cnbc that collaboration has been key during the pandemic. here's what he said when i asked

him how the health care system can ensure it's better prepared to handle a similar crisis in the future >> we're focused on, and i'm very passionate about, is making sure we have that readiness. i think the collaboration that you've seen across many industries, particularly the health care industry, really set us up well for this as we go forward because it does take a collaboration between those people doing the discover work, the companies which will commercialize these products and companies like ourselves that have the capabilities and expertise to manufacture them, but we have to keep working at this as we go forward. it's hard when you're not in the situation, in a pandemic to think about one. but we need to make sure we continue to push this work i know that many of the countries making sure that they've got their own kind of local manufacturing and technical capabilities online. we're working very closely with the governments across the world

to be in a position to support that as we go forward. but it's not just about having manufacturing assets it's also about working with the people doing the discovery work as well. the innovative companies, the universities this network needs to be put into play so we can react much more quickly if it happens again. >> do you think we'll see a rethink of the global supply chains in the early days there was concern we could see drug shortages in the united states and europe china is the world largest supplier of ingredients, india imports about 70% of those from china and supplies half, according to some estimates, of the generic drugs in the u.s

so hugely dependent on a variety of countries do you think that's going to change >> i think there might be a slightly more local focus, lengthening of the supply chains but i think the whole sector worked well to make sure the drugs were flowing to the patient that is need them. it's a collaborative industry and we've worked hard to make sure there was never a delay or pause in the products we're making to make sure they can get out there. these are powerful medicines there are people out there suffering in this pandemic situation but there are also patients out there who are constantly expecting the medicines they have before and after this pandemic that they'll be available very much been the focus here at fuji films and bio technologies we've worked hard to make sure we're going and producing the critical medicines at a commercial level and to continue

with the clinical trials ongoing. i spoke with colleagues and you can feel the passion to make sure the medicines continue to flow to the people that need them. >> for more stories from the our new future segment head to our website cnbc.com. coming up, european stock markets lower after the software company cuts its four year outlook. we'll discuss after the return

that would be a better area of the market today you're seeing some of the

expectations pushed out into 2021 >> it's also a reminder that the bottom line at companies does matter still so much of the trade we've seen take place since march seems to have been driven by macro and political factors but this sap case today serves as a prime example as how individual company fundamentals do still matter looking at the market more broadly and the sell off this morning there's so many things the investors are contending with right now, the election, stimulus negotiations, and we may hear from pfizer this week on the data friend the ceo said by the end of october we may know whether or not the vaccine is effective something to look out for in the coming days just to add to the list of other things we'll be watching >> i think investors expected

the third quarter we'd wrap up the chief concerns around the coronavirus. but we've heard here in europe that the front line workers won't receive the astrazeneca vaccine in the the first of next year which means where does that leave the rest of the population who knows what wave in viruses we'll be dealing with then so looking back on expectations from earnings doesn't mean we're overpriced on the upside in some of these market positions. that's the view on sap, getting a cut to revenues this late in the cycle and seeing next year impacted because of demand the question is whether this is the canary in the coal mine. and as we get set for the tech earnings later this week what can we expect? we heard from one analyst this morning saying it's all about the forward guidance, what can we expect from the big tech engines on thursday and what

does that mean for the trade on the eve of the u.s. elections as we see most of that trade probably hitting on friday >> just to pick up on your point about tech, one of the other questions investors are asking is whether they should continue putting money to work in the tech companies which have been so dominant relative to the market or give other sectors that have more favorable valuations a chance. but what environment is necessary for those value stocks, something like the banking sector to perform or outperform tech. and so far investors seem to be making the judgment that we're not in an environment where those plays will outperform. so maybe we see continued demand for these tech giants. >> maybe we circle back to stimulus as we talk about what is required to support the broader economy. later this week we get a gdp print which may show the economy is still about 4% lower than what it was at the end of last year so the market still looking for those cues effectively from

congress, from capitol hill about what further assistance is going to be forthcoming. that's all as we wrap up monday's show. thanks for joining us on squawk box.

global headquarters and here is your top five at 5

wall street waking up to more losses this morning as covid cases talk about surging to record levels. investors preparing for the busiest week of earnings season so far facebook, amazon, caterpillar, boeing and more all on tap just little more than a week to go for the election day the candidates hit the campaign trail very hard. so is our very brian sullivan with a close