♪ welcome to "street signs." i'm karen tso and these are your headlines. the need for the market in europe has never been more urgent warning the bloc is behind on technology and innovation and falling victim to global tensions. >> cmu lies at the center of the challenges. we know integrated capital markets are needed for financing

and particular early stage breakthrough innovation. france and germany suffer sharp contraction in the november flash pmi print with the markets now pricing in a 50/50 chance of a 25 or 50 basis point cut in december. german defense minister pistorius will not stand against unpopular chancellor olof scholz for the leadership ending weeks of who will lead the party in the snap election. >> translator: over the past week, i repeatedly stressed and say here again with full clarity. we have an olof scholz, outstanding chancellor. president-elect trump tap s former florida attorney pam bondi hours after matt gaetz drops out over a number of

sexual misconduct allegations. we've got more pmis at this stage. this time eurozone. this is the final piece of the puzzle as we countdown to potential rate cuts from the ecb. the hcob november flash services print and don't forget this is more resilient. that pmi crossed at 49.2. that is dropping like a hammer. 49.2 versus the 51.6 we saw back in october. so, services also caving now as we take a look at that level. those are very weak print we are getting. when it comes to the eurozone, hcob flash manufacturing print on pmi 45.2. that was previously 46. that level has been weakened.

we see that expressed through the lens of the german manufacturing numbers. you put this all together and you get the november flash composite pmi. that tally up to 48.1 versus 50 in october. so, you are getting the consequence here of the further unwind in growth and, of course, firmly in contraction territory. let's take a quick look at the reaction you are seeing in the trade that is the euro because there are consequences here. the market has been looking at some of the support props being breached and we are there. this has taken out the october low. 104.48 was the october low. we breached that level swiftly moving to 104.38 handle. it is a real bearish trade coming now. it is a steady move into lower territory for euro over recent months thanks to the strength in

the greenback trade. dollar is king on the back of the trump trade. the consequences here of weakening economic growth and without tariffs lobbed. you are seeing a fall in this trade. it does suggest for traders positions in the scenario of the 50 basis point rate reduction. let's get to christine lagarde who needs to establish the capital guards unit. in her speech at the european banking congress, she said there was an urgency. europe is at crossroads and needs act fast to save its future. >> the united states and europe is unquestionable in a direction that we should not be proud of. so the geopolitical environment, as you have mentioned, madame mayor, has become less favorable with growing threat to free trade from all corners of the

world. as the most open of the major economies, europe, we are more expose onned to those trends that many others. i will call capital market union from thereon, cmu, so i will spare you a little bit of my titive anthem. cmu lies at the center of the challenges t. is key for making our economy more dynamic and advanced. while banks, you, play an essential role in the european economy, we know that integrated capital markets are needed for financing and particular early stage breakthrough innovation. and it is key for becoming more resilient in the fragmenting world economy. capital markets in our view is the missing link for europeans

to turn their high savings -- more on that later -- into greater wealth. >> the ecb president also said the process of setting up the capital markets union needs to be simplified. >> since 2015, when we first started seriously talking about cmu, since 2015, there have been more than 55 regulatory proposals and no less than 50 non-legislative initiatives, but that breadth has come at the expense of depth. it has allowed cmu to be picked apart by national vested interests that's one or another initiative as a threat to heir territory and some of the mandates. so, if we are to achieve a

conscious sift, we need to refocus with the system and identifying a smaller number of initiatives with the highest possible return. as i see the core problem of cmu is the pipeline from safers pi innovators is blocked at three key stages. that's why i called my speech "follow the money." i know there are other things. this is literally. so those three key stages are number one entering and number two expanding and number three exiting. >> let's take a look at the european markets and how they are performing off lagarde's comments. we are drifting off the intraday sgs highs so far. in effect, moving lower to the

pmis ing. the french market and dax, we are pulling off the highs. in fact, let's take a close up look at the boards. you see it is a slim gain with the stocks out of france. the german stock market still holding on to less than .50%. stocks out of italy up about a .25%. the trade in the ftse 100 is trading up .75% of 1%. others climbing toward the intraday highs. the sectors at play today, the big movers to the upside. real estate with the 1.4% pop with the assessment with the interest rate scenario. don't forget earlier in the week, the market was a little bit concerned about the data crossing in the uk. healthcare up 1.3%. a strong trade for friday. retail as well. getting strong report from the numbers. the market looking at the reading to year end with a weak

set of data. unlocked like a coiled spring with the cold snap for the uk retailers. to some of the losers, this is how they look at this hour. in the red, banks. it is a broad sweep higher, but banks are lower. we had a weak set up pmi suggesting we are setting up for more rate reductions and does that have a net impact. travel and leisure and basic resources. the big moves we're seeing today on euro/dollar with the market. general pmi and total pmi. we have crashed out below the october handle. 104.25. a real slump in the euro/dollar trade almost .50%. now effectively a 56% braces with the 50 basis point reduction by the ecb in december. so the market is moving swiftly

around that scenario. sterling trade is also been dragged lower. dollar is actually somewhat stable versus the japanese yen. it does seem the data has roiled the trade on this side of the world. dollar is stronger than the swiss. and the euro bond with 2.24%. this is the long end. the short end might be more useful. italian paper 2.5. i'm pleased to say eric nielson has joined us. thank you for joining us in what appears to be a big day for economics. >> yup. >> d.c., i had three governors painting a picture of 50 basis points being an option in december with a truckload more data to be delivered. the data suggests we are not only contracting at 48.1, but

swiftly contracting. the pace of the decline matters here. what do you think it's going to be 50 basis points in december? >> i don't think so. they should, but they won't. it is too early to fully absorb it. the funny thing is the obstacle, we are the germans, the governing council, but the german numbers will be a concern with the bundesbank. if this continues, we will get 50, but not in december already. >> one of the elements here is the geopolitics and those sitting on the fence might be rattled by the use of certain weapons between ukraine and russia, both sides. you add that to the broader story and there is a view if you get a worsening conflict, it is not just the economic consequence, but the fallout for sentiment that impacts the economy again.

double layer on top. >> 100%. it is easy to be down european economy. we have to recognize that we were hit by three massive shocks over the last couple years to get you to these numbers. we have the inflation shock which eroded real income. we have the war as you talk and the sentiment and the need to rearrange the trades with russia and all the rest of it and then the policy response. contract policy and that is now being corrected in a sense. you discuss whether that policy was right or wrong, but it is what it is and it is a break on the economy. something the u.s. did not have. while we have serious structure issues and the report that you talked about is all correct. there's a big cyclical element also. most of those are probably easing up a little bit. we have earlier this week in

europe. some losses are starting to come away. >> the wage is a lag effect. we have labor unions want to catch up and get the increases. how sustainable are they when you have pressure on firms looking to downsize even in germany? >> you are right. this is not sustainable. we are not continuing at 5.3 or whatever the exact number was, but it is important because workers and wage earners need to catch up. the ecb held monetary policy too tight for too long because they were worried about this, but it is the natural effect you want to see coming through. the other point is exactly as you said. it will not last because firms, we have this incredibly unusual situation after the shocks were talked about where we have no growth but appointment. that will not last. >> the inflation level is not the boundary. we have 2%. the core is still elevated. that is not really standing in the way if the governing council

is saying we have an inflation problem. that is now in the rear-view mirror? >> 100%. the last mile, you remember, we have to be tight. it was a crazy narrative. it is not the story, right? we are now -- >> the last mile. the last kilometer. >> exactly. the fact we are already now down to two means we are almost certainly over the next 12 months, we will have more data points below 2% and above 2% because they will be all undershooting the target unless they really start to hit the cut at a faster pace, but i don't think we are quite there. in 2025, we will problem probably get a 50, i think. >> let's get to what madame lagarde was talking about the with union. everybody agrees there is urgency, but is it going to happen? >> there is. i'm a little bit less negative on this. it has taken ten years to weigh

on the capital markets union. it is the first time somebody of her stature layout the example. it started with the draghi report which was fantastic. >> i feel i heard every leading european commenting on cmu. who hasn't? >> you're right. i have not heard top policymakers. here is what we have. i think this speech was very, very good. she's absolutely right. this needs to be pointed out, right? we have a banking union, but no bank consolidation. really across borders so far. we have the capitalized union and the issue of whether you go to the 27 legal system. this was interesting. >> this was the spanish saying let's get going on a mini version of this and jump in and do so and get the ball rolling. >> that i like very much. you see that more in europe. we need more of it.

we need to get the corporation of the willing or whatever you call it. if you are waiting for 27, nothing happens now. in that sense, you can argue that the eu became too wide and deep enough, we expand and countries don't want to play ball anymore. >> with can can we tackle gettis and pivoting that money into the european firms. unlocking the money sit in the system. that said, do you want your money exposed to the european firms? for most of us who put it in national jurisdiction and the s&p 500 or nasdaq or something with a u.s. badge on it and get a little bit of supersized growth. you get the liquidity and you tap the international borders. the lagarde speech and you spill it across europe and you get the fast growing european companies. what if that doesn't happen?

what if the european companies have so much baggage and they don't grow and savings are there to protect us and eroded in the european companies? >> i have money in european companies, by the way, but also in american. it's a good -- it's a good point, but remember, the u.s. stock market, if you take the fancy i.t. or digital companies out, it has not performed fantastically well. in all of the u.s. growth machine in the last three or four years, compared to europe, particularly. >> the productivity growth. >> they have growth. >> productivity growth with growth? >> they did, but it was in a limited number of sectors. i cannot tell you the number off the top of my head. the last time, 80% of americans have not become better off. the stock market is a very small number. yes, they have very good productivity growth, a lot

better than us, but a lot are the european productivity now is cyclical because we are in the strange situation. that's cyclical. you also have a structural element and that's true. >> you say it is cyclical in germany. >> i don't mean to say it was only cyclical. there is an element to it and it is structure. they get back together. so those -- >> let's tackle that. how does germany gets together? they are talking about the change of leadership and remaking of this coalition, this uncomfortable coalition. how does germany fix its issues with the conservative government? that seems to be the measures that were re that seems to be the measures that were resoundly rejected by

the government? >> the seemingly outgoing coalition that seem to not do well. they have committed about 20 million euros to high tech companies. 75%. it's not they have done nothing, but they have been fundamentally and they have put 100 billion for the fense that came around with the debt brake. the german government determination to sit on the debt brake. destroyed proper fiscal policy making for many years in germany. my money would be on which ever the coalition would be. they would revise the debt brake. there will not be as much as i like to be. i'm 90% sure of that. >> i can see how ndner and the

philosophies would help from the state and fiscal policy dwarfs other policy. at this point, the market doesn't care. it will care at some point. is he going to be actually proven right in the fiscal discipline? is the right thing on its economy even on the population? >> i don't think he will be proven right on this. former finance minister was not right on the debt brake either. when you have the debt brake so implistically in germany, it ills population. you have to have fiscal stability. >> why can't private investment step up? you don't need the public investment at that level. >> you sure do in infrastructure and digital is the point for the proper investment to create the foundation of the private. usually these go hand-in-hand

with the proper investment of 25% of total investment and the rest is private. the private is held back by two things. lack of demand for the products. the german growth model was wrong. they need to find a way of pushing the domestic demand. incidentally, that's a hell, excuse my language, that was a lot easier than the opposite. what trump is trying to do getting the deficit away. boosting the demand is not usually difficult if you know what to do and you have the space to do it. so, i think there actually can be some of this, and then we have the period of very high interest rates. of course, you have the war, sentiment and high interest rates and no expectation of demand. the private sector doesn't invest. >> you have given the germans plenty of excuses not to spend. thank you for joining us on the show, erik nielson with us.

ahead on the show, boris pistorius rules himself out of the race for the german chancellor. we'll have more on what it means for next year after the break. hey, can you speak french? who, me? i know a few words. if you're struggling to speak a new language, you should try babbel, a learning platform designed by over 200 language experts. it's like having your own personal language coach. babbel offers live classes with expert teachers for real world conversation practice. it's totally flexible so you can learn at your own pace and with the right practice and coaching, start speaking a new language in as little as three weeks. go to babble.com to claim your limited time offer today.

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german defense minister boris pistorius has told the spd partnership he is not able to stand as the lead candidate in the upcoming snap election. ending his chance for chancellor. he added support for olof scholz in his re-election bid. >> translator: i've just told my party and leadership i will not be running as a candidate for the office of chancellor. this is my own sovereign and personal decision. over the past week, i've

repeatedly stressed and i'll say it here again with full clarity. we have an olof scholz, outstanding chancellor. he has overseen a coalition made up of three parties, but even in normal times would be difficult to lead. he's taken the country's biggest crisis in decades. >> we were just debating the german issues after the financial crisis. the debt brake. olof scholz is saying the debt brake needs moderate reform. the question is if he will be the next chancellor in a matter of months and just what anyone may do with the debt brake. the issue is bringing strict discipline. some saying that is a sharp issue for one economist said for every investment here from the public coffers, it is effectively ripping out old infrastructure and replacing it

without productivity gains for generals. hence the need to change that situation. germany's economy expanded los angeles than expected in the third quarter with the economic growth at 1 pshs % on the quart. that figure spells more bad news for the country which is the g7's worst performer this year. ahead on the show, the cop29 final hours as leaders race to come to a deal. well have the latest when we're back with you.

>> welcome to "street signs." i'm karen tso and these are your headlines.

the euro falls after the contraction. the arkets now pricing in the chance of a 50 basis point cut in december. christine lagarde says need for the capital markets needs in europe has never been more urgent. the bloc is behind on innovation and victim to global tensions. >> cmu lies at the center of the challenges. we know integrated capital markets are needed for financing and particular early stage breakthrough innovation. german defense minister boris pistorius says he will not stand against unpopular chancellor olof scholz for the spd leadership ending weeks of speculation over who will lead the party into february's election. >> translator: this is my sovereign decision. over the past week, i repeatedly stressed and say it again with

full clarity. we have olof scholz, outstanding chancellor. president-elect trump taps former florida attorney pam bondi as attorney general after matt gaetz drops out amid a cloud of misconduct allegations. i think the traders are loving the data points today, but uncomfortable reading for a lot of us. pmi out of the uk on the back of what has been a weak outing from the european side with wrestling in a 50 basis point reduction from the ecb. when it comes to the uk, let's look at what we're seeing. the pmi as they hit the tape this morning, this is the cips s&p november global flash pmi. up 48.6 down from 49.9 in

october. so, again, another decline taking place here. on the composite level for november, 49.9 versus 51.8 in october. so, we are seeing fairly steep falls on the numbers. on the services handle, that's flat lining at 50 versus 52 in october. pace of decline, i said this earlier, the pace of the decline matters here in the data this morning, at least on the services it's not in contraction. on the pmi, you are slightly in contraction territory in the uk. the reading here this morning, 125.07. the market moved with euro/dollar. just because there is a body of water, it would not make much difference with the general trend. that is what we are seeing today as we slump. it is not helping out the situation of dollar is king. that was the trump trade that's continued on thanks to the data this morning. as we chart this, we are now

back toward the levels we're seeing roughly around may, april, may on sterling/dollar trade. so, it is a steady decline that started from late september. the selling has accelerated now into the data point we're seeing today into november. speaking of data, let's look beyond the pmi. we had retail sales to digest. retail sales declined 0.7% of the month in october. uk office of stats says it was driven by non-food sales. on the year, retail sales rose 2.4%. since then, don't forget, we've had a cold snap and black friday promotions have kicked in. will it be enough for some of the retailers? the one investors are betting up is sainsbur, up 2.3%. the european markets, overall, the ftse was holding the line.

you see that is the case. we are still perched higher by .40%. the rest of the arkets are off the day's highs. they have given way to green to red territory. now giving way to fairly deep red. the french market in particular, that is a real underper former. we're down .75% of 1% on french stocks. to contextualize this, the market event that took us into much lower territory and much lower ranges, but we have been creeping back down to the territory thanks to the selling this month and we are pretty much in that category again thanks to what you are seeing 7156 for french stocks. if i can take a look at the german level here to contextualize that. the german market is a strange one. it has been resilient despite the fact of the coalition breakdown.

the market has been in the sideways trading range this month and with the fall today, that is still the case .50% lower. there are different categories taking place on the markets. italian markets had been a favorite trade this year. a bit more sealing now lling cro that trade as you see there. euro/dollar is the trade to watch today. 104.11. we are not finding much support level here with the fairly teep drop taking out the october lows and it still seems under pressure in the trading session. northvolt, one company we have been watching closely, the northvolt ceo is stepping down after the swedish battery maker says he is filing for bankruptcy in the united states. he said the company has a total financial need between $1 billion and $1.2 billion. disappointing as we were talking

about the company set to be part of the ecosystem in europe. and cop29 is set to close today, but delegates yet to agree. leaders with the conference overshadowed by the election of president trump. asking world leaders what this means. >> we are trying to do better schools, better roads and he just has a variety. which part of that has anything to do with development the right way? the real part of it is i'm not trying to put public money to work, i'm trying to get the private sector to do what it can. the private sector will only do something if it makes business sense for them. if it makes business sense for

them, i'm ing that for them. >> we need a global framework. i encourage them to stay in the paris agreement because i think we need more people contributes their ideas and how best to advance this in a rational and thoughtful way. >> the clean energy transition is going to happen regardless of who is tting in the white house or cabinet. it's unleashed. that's what cop29 means to us. >> we have the director of spanish office for climate changes joining us now. thank you for joining us today. let's start with the broad, we are still waiting for the communique. what do you think got done here and what do you think didn't? >> good morning, good morning, karen. happy to be with you today. this is the final countdown of the negotiations. we are in the middle of the negotiations here and it is important for the european union

and for spain to have a deal that ambitious. that means that prevents the worst of climate change and also put the money for the developing countries to be more resilient and help them make the transformation in all sectors of the economy. >> i heard it in d.c. even before this event, that was from leading people of cop29 designate and the head of the u.n. climate change and head of the imf on climate change. everybody said we need more ambition. the spanish said there is not enough ambition in the draft. do you agree? >> i totally agree. yesterday, we got a bet it is totally imbalance which is not acceptable for the european union. there are pieces that are basic getting that done. the first one is mitigation. we are here to reduce emission and make the transition away

from fossil fuels and when you have the energy efficiency, you have that source for the future. we need to have a big piece of the mitigation aspect here in baku. we cannot leave innovation behind. that means we need clear guidance of the mitigation on the transition in a way for the next round. we also -- we also miss the landing zones in which we can put the ambitions number that the european union is committed to putting on the table. so, we are negotiating bilaterals and with the presidents and we are making alliance with the most vulnerable and progressive countries in order to bridge and get a good deal for everyone. >> it wasn't donald trump's fault. he is not even in office yet, but it reset the music and taking the u.s. out of the paris agreement last time and biden, of course, bringing the u.s.

back in and now fears the u.s. could drop out again with the d.c. pledge around carbon emissions. the delegate decided to withdrawal. the delegation decided to step back on the news of trump. it wasn't trump's fault that not much got done. >> yes, i think that the geopolitics and the elections in the u.s. doesn't make things easier here. the reality is the system worked after without trump and delivered without trump in the previous sector. we should continue to stand by paris because the results that we already have are very positive and we need to make that clean energy transition work in every region of the world. i think we cannot stop that and the france administration will not stop that.

the rest of the states, a lot of the governments, really want to stay in as previously. so, the lessons learned is the unilateral system should continue and put pressure on the mitigation and the companies to help the transitions all over the world. it should send signals to the investors and financial world in order to make this transition a reality. on the land, we will still push for this green transition as i said is independently or despite any election continuing in the coming years and this is a critical decade that is very important for us. >> experts are crunching the numbers. we will know by next year if the paris agreement is dead in the water and the targets of 1.5 degrees warmer at the less ambitious end. if we are not going to hit target and consequences for the

planet with the wild events this year. what does it mean with the hard and fast policies? a lot of people think this is the starting point. is this the most essential item we get pricing on carbon that resets the market on emissions? >> i think that is a very essential piece and we have been working a lot of years to get, you know, carbon markets that are additional to the efforts we are making in every country in addition to the national policies. we also promote, you know, the reality of -- of the developing countries. we help the countries make the transitions and also, that will be conscious with environment and avoid any double. that is important because if they don't fit for purpose or fit for ing the emissions

and don't fit to put the reelement we need in the developing work, it will not work. we are on good track with cop29 because we have a sound result on carbon markets this year and also it will be an important piece of the finance and mitigation process. let's work for that and have carbon markets. >> thank you so much for joining us today. we do appreciate it. a big story still. the director of spanish office for climate change. elsewhere, the family of french billionaire arnault is set to take over paris fc this month in the bid to boost the capital's second club. red bull owns a number of teams and is a majority investor. charlotte is here at the table with me. arnault is increasing the share? >> we have seen lvmh and the

arnault family in sport. they were sponsors of the paris 2024 olympics and the formula 1 sponsorship. that was lvmh. now this football club is relatively unknown. the paris fc. paris is an anomaly if you compare to italy with seven clubs and france has one. this raises questions saying how will this family do with the football club that is just at the top of the league and hoping for promotion. they are hoping with a very small club. interesting tie up with red bull and with other football clubs, they have jurgen klopp as well. they have two strong fire powers there joining forces for the club. i had a chance to catch up with the son of bernard arnault who has been leading the charge.

i asked about the tie up here and what it meant for the luxury and sport. >> if we wanted a trophy asset, obviously, we have not taken on this project. there are other, bigger and other teams around europe. it's the opposite. we want to build the story of resilience and build a story of hard work and with beautiful values and create, not from scratch, because the club exists and it would be a lack of respect for the existing team who is head of second league equal to the championship in england, but we're going to help them maybe and hopefully do things better, quicker and, yeah, on the long term, on the very long term, this horizon we give to our brands as well inside the lvmh group can be replicated here. not having the pressure of time to succeed is something that is very important to take the right

decisions and, yes, take a little bit of pressure off the shoulders of players who are under a lot of traditional sports stress, which is positive, but with a big shareholder, negative. we are not an investment fund. we are not asking them to win the champions league in the three or five or ten years. >> talking about this is a very long-term investment. give them time to succeed. comparing the club with the brands at lvmh. give them time to make the magic happen. it is not a vestment. he is continuing with the challenge end. the paris region is the top region in the world in producing talents in the past few years. they want to continue to build on that. it was really interesting to hear how, you know, they are trying to take on the champions. the sporting champion with the culture icons and that can help further down the line in tying

up the brands one day. >> massaging the fans and bringing the fans in with the stalls and merchandise and the sponsorships that are involved. if you look at the rival with paris, they had polo in and out. that deal was torched. paris has a big stall in london. i walked past it multiple times. arguably, this is a retail luxury. it feels they are bringing the expertise to bring the brand to the fans. >> the teams are brands now and some athletes are brands. you know the expertise of lvmh and arnault family. making them hine. the fire power. red bull will bring the football

expertise and jurgen klopp, the former manager of liverpool. joining in with the football aspect. we know lvmh is very good at making brands shine. it is a very small team. the stadium is only 19,000 seats. it's really, really small. they give tickets for free because they try to fill the seats because the unknown team. we know the firepower of the family coming to fill the seats and move on to a bigger stage. >> they are good with real estate. they have taken over certain quarters of the city. thank you very much, charlotte. coming up on the show, president-elect donald trump taps pam bondi as his new pick for attorney general after former pick matt gaetz whdws amid a number of sexual misconduct allegations. more next.

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it has been a busy week and u.s. politics as u.s. president-elect trump has named former florida attorney attorne. she was part of his legal team during the impeachment trial. trump's choice comes after the initial selection of former congressman matt gaetz ruled himself out after meetings with senators saying he did not want his confirmation to be a distraction. gaetz faced several allegations of misconduct which he denies. we have our guest with us. doctor, let's start with the latest one pam bondi. the legal eagle and top cop for the third most populous state in the united states. is that a decent resume to come

in with as attorney general? >> thanks for having me on. yes, the headline here is that donald trump wanted to quickly and swiftly move away from the gaetz news. gaetz stepped out of the race last night and trump very quickly had pam bondi's name available. she is not a household name as gaetz was. she is certainly a household name for trump. she was a trump loyalist and involved in the impeachment trials. the former ag of florida. according to trump, she is ready to step in and refocus the department and make america safe again. she is quite aligned for his objectives for that department. >> gaetz seemed to be known for all the wrong reasons. there was some speculation that maybe it was damaging for trump. did he touch the sides given how quickly he has come up with a replacement? >> matt gaetz will be a

contained contain ed issue for trump. we will not be speaking about that. it is not to say we will not hear from gaetz again. he has political designs. questions if he will look to seek re-election in a future race. gaetz himself lost the confidence of republicans. he was not going to get confirmed and saw the writing on the wall and bowed out to avoid blowback for trump. >> let's talk about pete hegseth as well. one other nominee here the transition team has been looking at. do you think he has a chance of succeeding his bid? >> hegseth is one of those. that is because of the news we had come out over this week around his previous activities and the allegations that have been made against him which he says his campaign says he was cleared of, but it's also because of his general inexperience. it is coupled with the fact it's a very big role he is asked to

fill. the department of defense has the highest budget of any department in the u.s. government. he doesn't have the bureaucratic experience to lead such an organization. there is potential for vulnerability there. there is a suggestion that republicans remain at this moment behind him. we know with the results called in pennsylvania, for example, overnight, that bob casey has lost to mccormick, republicans picked up four seats. for that confirmation process, republicans are in a better position to get through trump's nominees than they would have been before the election. >> contextualize for us any issue with the attorney general with the missiles and retaliations from the russians with the war heads they are now deploying. what is the priority for any incoming defense secretary? >> as you say, this is a moment of vast geopolitical uncertainty. the next president donald trump

and his leadership will be facing the war in ukraine ongoing and the war in the middle east ongoing. as you highlight, biden made the swift policy change over the weekend to allow ukraine to use long-range missiles into russia. russia has responded and putin confirmed they used a new type of hypersonic missile on ukraine. the stakes are high. europe is on pins and needles and what matt whitaker, selected as the u.s. envoy. will the u.s. be committed to ukraine and as they long expected as as they saw under the biden administration? there is a big question mark over the concerns. >> the other big name, potentially disruptive for markets is robert f. kennedy jr. as potentially the next head of health and human services. this is fascinating. we know he pushed back against vaccines, but he pushed back in

food supply with the processed food at the time when americans care about their waistlines thanks to weight loss drugs. what is the potential for him to make it through to become head of the department andifications big pharma, but the food industry? >> you are asking big questions. as i said earlier, there are vulnerabilities. robert f. kennedy jr. is a vulnerability as well. he holds views outside the mainstream with the issues he will be tasked with leading. there is a real question whether he does succeed in the senate process, but as i said, the senate looks much more red than it will look from january 2nd for the handover on january 3rd. >> a quick 20 seconds. do you have replacement for s.e.c. with gary gensler stepping down? >> we will see.

it is tied to the treasury as well. trump is taking his time which is surprising because the economy and ecb s.e.c. are all . >> dr. lindsey newman, thank you for joining us. we appreciate your ex-expertise. the markets are tanking in most of these markets in europe with the exception of the ftse. they are weak on manufacturing and services and weak on the composite. the market is looking for a potential of a 50-basis point reduction. u.s. futures not helping out. thank you for joining us on the show. i'm karen tso. "worldwide exchange" is up next.

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it's 5:00 a.m. here at cnbc global headquarters. welcome to "worldwide exchange." here's your "five@5." back in black. stocks trying to keep their winning streak alive. futures right now, though, have just turned lower. retail doing its part as gap and one discount retailer see their shares surge. on the other side, reddit slammed as millions of discounted shares get set to hit the market. plus, gaetz out, bondi in as the trump cabinet shuffle continues.