tv Street Signs CNBC February 25, 2016 4:00am-5:01am EST
hi, ebb. good morning. you're now watching "street signs." i'm louisa bojesen. >> and i'm nancy hulgrave. these are your headlines. >> the shanghai composite has its worst day in a month, closing down by 6%. >> and financials flourishing. shares in lloyds see their biggest gain in more than five years after the bank announces a surprise special dividend. rsa insurance also powering higher. >> bt dodging a break, spending shares higher in london. u.k. regulators are saying they must open their network to allow
competition. >> we're seeing rare red spots in germany with the drug maker falling to the bottom of the dax after missing expectations in the fourth quarter. good morning and welcome to "street signs." we are seeing some green on the sign here in europe after that remarkable turnaround stateside. let's get to the louisa, who's taking a closer look. >> take a look here. this massive wall does the job. the vast majority of europe's equities this morning are trading in positive territory. we were called higher after we saw that rebound stateside. although, that's not really where the focus is this morning. we'll get to that in a second and look at our asian markets in a minute as well. in the meantime, we're looking
at our european equity markets this morning. as seen, all in the green. the ftse up by 1.5%. the cac and ftse mib up by just over a percentage point as well. by and large, buying taking place here in europe. however, we have the little left eye glaring over at the asian markets and what happened there overnight. actually, it's more than a left eye. it's both eyes. sri joins us from singapore. why did we see this massive fall taking place in the chinese market? >> yeah, the volatility is back, isn't it? let me just paint some context on this. 6.4% decline for the shanghai composite constitutes the worst daily loss in almost a month. probably some suspicion with the recent rally we've seen. this move above 3,000 was largely seen as unsustainable. we come back down, profit taking. there's some fatigue associated with the up move as well.
the other factor is, look, growth remains weak. there's mixed policy signals. despite the change of the guard at the top of the securities regulator, i think there's still a lot of issues regarding the volatility and the policy associated with the broader capital markets. are we going to see more intervention? a so those situations haven't really changed. then you have a situation regarding the credit profile of china. yes, it is rebalancing. yes, we are seeing this evolution towards the consumer. it's been a very bumpy road in that adjustment process. that's thrown up bankruptcies. there's default issues now. there's credit concerns. and possibly a credit event. i think the big question going forward is whether it's going to be disorderly or manageable. so the market trying to price in all those dynamics. the volatility never really went away. it went dormant for our while. now we're back. that's where we stand. we are seeing some constructive
moves in other areas of the market in our region, especially the nikkei 225. up by 1.4%. that seems to be a function of the weaker japanese yen. still a lot of concern, a lot of question marks about negative interest rate policy. what's interesting is governor kuroda seems to be on the wires and almost on a weekly basis justifying policy saying, look, at some point in the cycle, it is going to work. that's where we stand. back to you. >> that's right, sri. governor kuroda, as we speak, just saying he does in the think asset purchases have limits, but many disagree with that comment. we'll get into that in a minute. meanwhile, the world is putting pressure on china, according to the country's vice finance minister. he added that beijing understands how important it is to correctly communicate with the market. meantime, the imf has called for members of the g-20 to prepare a
coordinated stimulus plan. this comes as g-20 leaders meet in shanghai, where much of the focus will be on the health of the chinese economy. >> investors are overly nervous about various aspects of the chinese economy. if you look at the more fundamental aspect, consumption, it's quite robust. what i saw in recent statistics is during the change in the new year, retail sales were growing 11%, which is a quite impressive number. >> here in the studio at the top of the hour, we're joined by the head of market strategy at swiss bank. thank you for coming in to visit with us. i think what the imf is saying to the g-20 leaders is just maybe talk amongst yourselves about the potential for some type of coordinated action if need be, if we see more volatility. >> correct. >> or am i reading it wrong? >> no, i think you're reading it
correctly. the likelihood of a coordinated action is significantly low. they have to find a consensus among 20 nations about missed valuations within the fx market. the g-20 really talks in fx terms. finding that consensus will be extremely difficult. i think what we're going to have is that verbal intervention. a lot of chatter, a lot of communication, but the potential of an actual policy coordinated response seems highly unlikely. >> is this a good idea to be doing more coordinated action? i remember back to the height of the financial crisis when we saw the rate cuts. do we want to go down the route of this very global, coordinated economy? >> first of all, the global economy has become extremely coordinated naturally. i think the idea of having coordinated policy has never worked well whether it's the 1930s or 1980s. we saw the fed in 2007, 2008 go rogue in terms of debasing the
u.s. dollar. that worked for the u.s. for a small period of time. but for the long-standing global economy, it really hasn't worked well. i think the idea of a coordinated devaluation or even sort of random currencies devaluing at different times, i think, is a highly suspect type of policy. >> and i think what you're getting at is the big question on everyone's mind. what would coordinated action look like? we're already seeing doubts about qe, the efficacy of asset purchases. already criticism about negative interest rates. could we get to a stage where we see more people supporting a milton friedman helicopter scenario? >> i think the idea is there. i suspect there's always going to be outliers trying to find a way of moving it forward. again, finding consensus and taking away the underlying ability of central banks to control their monetary policy. i think it would be a very difficult thing to do. just a loose analogy would be opec and their inability to try
and cut production. something like that in a g-20 scenario would be even more complex to put together. >> all right. peter, stay with us. we'll come back with more on that. >> also, get involved. do you think we should see coordinated action with that? is that going to help us, hurt us? if you do something to devalue a currency on one end, you're going to have an effect down the line. >> central banks are struggling right now. the idea of doing something just to do something, i think, is the wrong way to go forward. >> well, get involved. let us know what you think. you can e-mail us. the address is firstname.lastname@example.org. we're also all over twitter. >> @nancycnbc. >> i'm @louisa bojesen. the show program i is @streetsignscnbc. let's move on. lloyds has been trading sharply
higher after reporting an underlying profit of 8.1 billion pounds for 2015, outpacing expectations. shares up by almost 10%. they set aside another 2.1 billion against ppi insurance, misselling provisions. the ceo is expected to be given a deferred bonus of almost 724,000 shares. >> welcome news there. that's for sure. rsa also moving higher in the u.k. this comes after posting a 43% jump in 2015 operating profit. the company also says that this year will be the last year of its major restructuring work. now, cfo scott egan told cnbc earlier that the u.k. insurer has pushed through many changes in recent years. >> the very focused strategy centered around three key regions, which is the u.k., canada, and scandinavia. we're executing against that strategy. i think that's what you can see in the numbers this morning.
i removed the balance sheet risk of the organization, which i think is what you refer to from the past few years. we've also announced the solvency two capital numbers. i think we can say from a strategy perspective and balance sheet risk perspective, the company is now on much more solid footing. >> well, axa shares have been moving higher after 2015 net income rose by 12%, beating forecasts, thanks to favorable exchange rate moves and a strong performance in asia. this french insurer hiked its dividend from 95 cents to 1.10. they confirmed their delivering on, quote, ambitious targets. >> meanwhile, u.k. regulator stopped short of ordering the telecoms giant to split up its
business. instead, it called for tougher performance targets and a more inclusive and open network. the big sigh of relief we're seeing for bt. as you can see, up about 2.5%. talktalk, they were looking for more independence of this open reach network. shares off about 1.4% there. however, vodafone and sky shrugging off the news, moving higher in this u.k. market. to me, the real key here is the order they must get greater dependence. but what does that look like when you're not calling for a split? when we look at bt's response, they're saying many of the steps proposed here we're already doing. so they're deciding what this actually means on implementation. definitely as you can see from that stock response, it's good they're not calling for an overall split. >> well, they're not calling for a split, but they're saying we reserve the right to potentially call for a split in the future if we want to. so they're putting that line in as well. >> and the recommendations are
ongoing, of course. >> also in focus today, we've been looking at ab inbev. shares are under pressure after posting a fourth quarter decline in profits and a miss on the top line as well. but the belgian brewer has hiked its dividend. the budweiser maker warned about emerging market but struck an optimistic tone for volumes in the u.s. joining us now to dissect these results is jonathan fyfe. pleasure to speak with you this morning. just having a look at the results, the dividend is good news on the one hand. investors seem to be more concerned at the volumes, particularly in emerging markets. just how bad are the emerging markets' headwinds? >> yeah, good morning. i think macro headwinds are
quite significant. the top line is going to be a challenge, certainly from a volume perspective. the fx headwinds, which has a transaction impact as well as a translation impact, so you're going to have probably high inflation from that. a lot of pressure on margins in brazil. mexico, though, is very good. china, abi is in the right place with its premium focus. >> so brazil, we know, has been a bad story for quite some time. perhaps the u.s. volumes not quite as bad as many had feared. i'm also wondering to what extent does the company have the flexibility to offset lower volumes with higher price, especially as they get closer to this acquisition. >> abi's big, big focus through the last few years has been on building its premium brands. you can see that through the rollout of corona across the world. so i think if you look at the fy-'15 results, the price mix was very positive.
i don't see any particular reason not to expect it the to continue into 2016. >> jonathan, hi. it's louisa. what's cash flow like at the moment? >> i think it was 14.2 billion. abi is a cash machine. the working capital is a negative percentage of sales. whenever the business grow, so does the cash, which is obviously very nice. very favorable place to be, which probably underlines the confidence on the dividend. >> do you support that strategy of continuing to hike the dividend even though overall results were quite disappointing? >> to me, i think the flexibility is probably reaching the top end of that now. i think next year if you don't have progression, i think it would be very difficult to do another 20% hike on the dividend. >> are there more disposals, do you think, to come?
the sab miller deal, very big. many people anticipate it to go through. do you think they have more plans to continue along the road of actual disposals and to try to focus the company a bit more? >> i think at this point they'll try and keep what they can. so the big question is what happens in china. will abi be forced to sell some of this joint venture there, or will they try and keep it. i think so far, consensus was originally they would try and sell this business. but the fact is we're four months down the road now, and there's no sign of them trying to do that. i think they're going to try and hold on to that. same in eastern europe. this is why they expected to be sold. yet, we don't seem to have any progress at all on doing that. >> jonathan, thank you very much for being with us. jonathan fyfe, beverage analyst. >> well, we just want to bring you some breaking news coming out of honhai. they're saying they're going to delay the signing of the final
agreement with sharp. this was the mega deal we've been talking about all morning with foxcon buying out sharp. now honhai is going to delay signing a final agreement. they say sharp has asked for new conditions in the proposed agreement. we need to clarify the new terms in the agreement. of course, we did see sharp fall some 14% in japan when the announcement came out. we're also hearing from foxcon that sharp is to give new details on wednesday and suspending the signing of the agreement and they hope to reach a successful conclusion soon. so as soon as we get more details on exactly what they're looking for, we will bring it to you. for now, honhai, according to the taiwan central news agency, saying they're going to delay a signing of that final agreement with sharp. >> so for the last ten days, maybe, hello. that song is just stuck in my head. that's a catchy tune and a half. adele. coming up on "street signs," viewers of the brit awards got
plenty of chances to say precisely hello to adele last night. stay tuned to find out who else walked away with one of the most coveted music awards of the year. ♪ earth hour is about empowering people making a difference to change climate change with passion and excitement earth hour is about inspiring climate action celebrating a global movement and impact
welcome back to "street signs." we've been talking about the great central bank debate here all morning. now the federal reserve's james bullard weighing in saying it would be, quote, unwise to raise rates while inflation expectations are falling. however, the st. louis fed president said he could be convinced otherwise if strong inflation data, as seen in january, persists. this even in the face of weak expectations. and james bullard will be joining our colleagues stateside later on "squawk box." >> now here in europe, the bank president has been warning about
ignoring the side effects of easy money. julia caught up with him yesterday, the ecb board member. she's joining us here this morning, legging it back to london. what's his message? is it the same as what he's been saying for quite a while? >> it's always the same. be careful of the stimulus we're adding to the economy here and the unintended consequences. i think we're seeing that with negative deposit rates. at least investors fear about what this means. beyond what his view is on further stimulus in the ecb, i asked him whether he agrees that what central banks are doing is adding to the problems we face rather than providing solutions and whether or not the ultimate answer here is helicopter money. listen in. >> my point is that you shouldn't overburden central banks. they don't have a cure all. they don't have the miracle medicine at their disposal. we can, in a sense, influence
prices. we can influence economic activity in the shot tert term, we cannot create growth. my feeling is that time and again central banks are at the core of the hopes of many, and i think we have to see the limited role and also the limited capacity to influence variables of interest to the broader public. >> so the message is the ecb isn't a miracle worker an you're not a wizard. >> that summarizes it quite well. >> we also talked about the ecb's upcoming meeting, the hopes in the market, the expectation for further stimulus. i said to him, march you draghi said he will not hesitate to act. do you agree, disagree? he said, we totally disagree with the additional stimulus. he was not being pulled one way or the other, wouldn't talk about policy stimulus. but he did downplay the
inflation expectations and said, actually, look, we've got to look through the oil prices moves and the impact they're having. >> interesting when you put it together with what james bullard's been saying recently. that inflation expectations are falling. what do you think of all this, peter? >> there's a lot to cover right there. i would say, you know, in terms of what the bank is saying, it's a similar communication we've been hearing for quite a while. i think it's very real that if you don't have real growth, inflation for the sake of inflation is not particularly good. all the extraordinary response that the ecb has been putting forward is not driving real growth. therefore, why are they still doing it? the boj has not been enormously successful. so why couldn't down that path? >> so you think they shouldn't do anything else? >> i think they're caught in a very tight spot with many of the other g-10 central banks where they don't have too many policy
tools. they've gone down this idea of negative interest rates. it hasn't been very successful. therefore, what else can they really do? so i think they're running out of responses. until they have something to fill that void, they got to continue down the path with negative interest rates, more qe. >> we did hear from governor kuroda this morning, disagreeing with you, saying negative interest rates were having an effect. but this is not good news for japanese corporates. >> kuroda has to keep talking until it comes true. if he stops for a moment, the game is over. we expect that language from him over and over and over again. >> it argues the game is over already. the fact they're using this term extraordinary monetary policy says we're getting closer to that limit if we aren't already there. >> exactly. he has to talk his book. he has to keep the verbiage up. if he doesn't, he's in quite big trouble. in internships of the fed, i
think we're seeing a very balanced approach. we're seeing the hawkish comments. we have bullard with the dovish. i think that's a good place for the u.k. economy and the u.s. investor. that's probably why we saw the rapid turnaround in wall street yesterday. i think if we see good numbers coming out of the u.s. in durable goods this afternoon, it might be a reflection point that says, you know, the u.s. economy is not going to slip into a recession, things are not as terrible as the market perceives, and while the rate of interest rate hikes are not as steep as before, it's not going to fall off a cliff. i think that's very reassures for investors. >> is that your view? >> it is my view. two things. one is that in the last five years, we've seen seasonal weakness around the q-1. all of the sudden, it happens this year, and people start freaking out. why are the numbers disappointing? but the numbers are not that bad. we're seeing the consumer relatively healthy.
we're seeing the robust housing market, labor market. we're seeing inflation on the wage side. so people seem to have forgotten this very, very quickly. when we start seeing decent numbers come back, they'll start pricing in one to two hikes this year. >> as we've been saying, we're all on twitter. you can find us. it's easy enough. chris says -- we were talking about the prospect of coordinated action. chris says, how about some fair and balanced trade agreements, international labor and financial regulation, or is that too coordinated? >> this year, next year, the year after? >> but i think that's very difficult for the g-10 to put together. there's too many parties, too many voices. that's why they stick with something very basic like fx in order to be the language of the g-10. when you talk about talking about trade, none of these guys are really allowed to make those type of decisions at this type of meeting. >> thank you very much for coming in to visit with us this morning. thanks to you as well, julia,
for dropping by, after having visited the ecb board member. well, coming back again. you're out all the time. good to have you with us. moving on, british-american tobacco has announced a decline in revenues to 13.1 billion pounds as volumes fell year on year. this happening as the cigarette company forecast a challenging trading environment in 2016. >> and another firm reporting earnings moving to the downside this morning is henkel after they expect 2016 restructuring costs up 150 million to 200 million euros. investors are shrugging off a jump in fourth quarter profits as they get a hit from restructuring costs. the ceo told cnbc earlier how the locally tailored strategies are helping to drive emerging market growth. >> we're so engaged when it comes to footprint. 55% of our people are in the
emerging market. we have a lot of loadcal r&d. that penetration into the eme e emerging market is helping us. one slows down,like china, we have mexico picking up. eastern europe continues to be strong despite the crisis we're seeing in russia and ukraine. >> a tough pill to swallow at bayer as they missed with fourth quarter growth. the german drug manufacturer says it expects a gain in 2016, adjusted ebitda in the range of a medium single-digit percentage. >> seadrill looks set to sail towards calmer waters, pun intended. shares up after announcing plans to tackle its $10 billion debt. the oil rig company, whose share price has fallen by 94% over the last four years, saw earnings fall more than expected. seadrill shares are heading
towards the top of the stoxx 600 on this news. this is the case of a company that's been hard hit by oil worries but now getting a bounce. less bad than feared. >> hello. >> still here. >> still have the adele song. we'll be talking brit awards later. >> star of the show, she was. >> massively. let's show you our european equity marks. we're an hour and a half into trade. this is what we're looking at. we've been called a bit higher this morning. hanging on to those gains. we'll be back on the other side of the break with more "street signs."
unchanged from all the previous estimates as well. fourth quarter business investment, minus 2.1%. that's the biggest decline quarter on quarter since q-1 of 2014. also down heavily from what we've seen in the third quarter of 2015. they're linking the fall in business investment to the disposal of assets in transport equipment. so sterling against the green back relatively unchanged now. in reality, it was driving sterling. i don't think it's estimate on growth. it's the brexit concern. >> hitting seven-year lows against the dollar yesterday. coming up somewhat from that level. again, keep an eye on that crucial 1.4 level. meanwhile, european shares up on corporate earnings today. in china, the shanghai composite has its worst day in a month, closing down 6%. >> financials, though, are flourishing. shares in lloyds seeing their biggest gain in more than five years after the bank announced a
surprise special dividend. rsa insurance also powering higher. >> and bt dodges a break up, sending shares higher in europe. >> now, rare red spots in germany this morning. the drug maker bayer and henkel falling to the bottom of the dax as both miss expectations in the fourth quarter. hello, everyone. welcome back to "street signs." we are seeing green across the board here in europe. we have to recap what happened yesterday in the dow. this is the picture for u.s. markets a the this hour with futures implying a higher open but really just flat at this stage. we're looking at very, very minor gains called for the main u.s. markets. this comes after a wild session on wall street just yesterday. we saw the dow recover its biggest recovery since 2008. this was largely tied to the movements we saw in wti, which was down.
the oil price there almost 4%, made a recovery. so, too, did equities following that move. how this is playing out today in global trade, we did see weakness in the shanghai composite. other asian markets moved higher. this is the picture in europe, driven largely by earnings today. the oil price still in focus as well. the ftse 100 leading the way higher by almost 2%. the dax up by 1%. the french cac 40 and ftse mib also moving significantly higher. >> let's talk about the middle east and syria in particular. syria's main opposition bloc has said it'll support a u.s.-russia brokered cease-fire plan. the announcement follows president assad's readiness to facilitate an end to the five-year-long fighting. in a phone call with vladimir putin, assad said the cease-fire was, quote, an important step towards a political resolution. now, it is hoped an end to the confli
conflict, which has claimed the lives of 250,000 syrians, will allow for peace talks to resume. the middle east director at eurasia group joins us. these talks taking place now, it seems that putin is taking charge personally. he's been calling a number of the key leaders. what are we supposed to take away from this? do we think it's moving in the right direction? >> first of all, it clearly sets putin as the architect of everything that happens. he's primarily responsible for the western part of syria coordination with the u.s., making sure there is coordination in terms of air strikes. what this tells us is, one, i think that a cease-fire is not going to work. this is symbolic. this is very temporary. what it will do is slow down the tempo of russian military operations and begin to give opportunity for political talks
and to integrate opposition. i doubt that on the rebel side you have enough coherence to really observe a cease-fire. these are dozens of rebel groups with different ideologies. i doubt they will be able to abide by the agreement. >> given they've been fighting for five years, they're at least heading in the right direction. at least putin is trying to do something, regardless of whether or not his own interests are at stake. >> i think within the major powers, turkey remains the world card. you have the foreign minister of turkey saying earlier today that essentially a cease-fire wouldn't be something they would be on board with if, for example, they feel threatened by the islamic state or the kurds, ypg in particular, which is them giving the warning signal they would be prepared to violate this cease-fire on those grounds. i think what's going to be interesting going forward is what the nato response to that would be. i think if we saw the first time
around with the russians and the downing of that aircraft, they had their back. what's your thought? >> i think there are two distinct issues. nato as an organization backed turkey the last time there was a confrontation with russia. on the political side, everyone was critical. the u.s. was, germany was, even the u.k. was very critical. today there is no nato backup for a large confrontation with russia. if the turks decide to go at it alone, i think they don't have any political cover from anyone here. >> so trust among the interested parties obviously a chief concern. also, the line here that it excludes isis and this whole confusion around who the rebels are and how you target them. >> also, there's this whole idea that in terms of who the rebels are and how you target them, the entire idea that there are going to be rebel groups they're going to continue to go after. unfortunately for the united states, $500 million, several
hundred more million dollars in e terms of training them and equipping them and we just sort of left them out there. they could be targeted as well. >> i think the nusra front is almost two-thirds of the front and cooperating with other rebel groups. i think assad and putin will use that as an excuse to say that we're actually targeting extremists. that's part of it. i think in roughly about a third of the cases, we'll see a decline in hostilities and air strikes and everything. but in almost all of syria, what you're dealing with is a very, very predominantly islamist opposition. putin will use that as a pretext to target them. >> at this stage, do we feel that maybe the west will have to not make a u-turn, or at least not visibly, but start supporting assad a bit more in order for the longer term stability of the country? you can't go on killing this many people for the next, you know, decades to come.
it just makes no sense. >> so i think the u.s. and europe are finding it very difficult to change policy on this front. they've said that assad must go for about five years. a u-turn is very difficult to do. what putin is trying to implement in syria is put the west or the u.s. and europe in a position where assad is on thes offensive and to fight isis, where he controls most of western syria. he possesses the only viable fighting force against isis. i think by the end of the year, putin will succeed. it will be a difficult situation for europe and the u.s. >> we've seen assad making so much ground over the last several months, certainly with regards to aleppo. i don't think you're wrong. >> if the u.s. and other western powers f they see assad's hand changing in syria and they now realize through the mess of the last five years that, okay, well, maybe it's not such a bad
idea to back assad, you have to choose -- >> you have to remember, this is an election year. barack obama, if he's done anything, has made it very clear we're not going to put boots on the ground, at least on this watch. so his watch is coming to an end. i wouldn't anticipate any big changes before november. >> with washington, they're obviously looking at what a role putin is playing here. this must come of some concern to them. >> certainly. we've seen this as an ongoing story, haven't we. they really haven't done much to change that narrative. >> well, i think president obama was very clear that he doesn't necessarily see this as a russia versus u.s. issue. >> luckily for him, i suppose. >> luckily for him. for democrats too. it is not a massive or very important strategic area to fight. the middle east has been a headache for obama for about four years, if not more. there is not appetite to broaden involvement in the region. so i don't think that the current u.s. administration wants to do more. it wants to just slow down the
scale of violence. that's just good enough. >> thank you very much for coming in to join us this morning. hadl hadley, thanks to you as well. >> maybe not a chief concern for washington at this moment, but undoubtedly a big issue in the presidential race. the latest development there as donald trump solidifies his grip on the republican nomination, he's taking fire from a former nominee. well, it's mitt romney this time calling out the gop front runner, saying, quote, frankly, i think we have a good reason to believe that there's a bombshell in donald trump's taxes. trump responded on twitter saying romney's own tax returns made him look like a fool. nbc's tracie potts is in washington, d.c. tracie, just the latest tit-for-tat here. we've heard from donald trump and someone who many consider part of the republican establishment here. what's the big takeaway? >> reporter: well, the big takeaway is we don't know everything about donald trump's money, which he's talked about
so often on the campaign trail, making a big point of the fact that he's so rich, he can finance his own campaign without taking the people's money. now, mitt romney, who had his own issues with his tax release, is now questioning whether or not we really know everything about donald trump's money and how much of it he's paying in taxes. in this interview with fox, romney said that, first of all, the tax records haven't been released. it's not clear if donald trump is as rich as he says he is. in fact, there have been some independent analyses and other filings that have suggested that perhaps he's overstated his wealth. romney is suggesting that perhaps he may not be paying as much as he should in taxes. he says surprises in those returns could even address donations. trump on the campaign trail has said repeatedly that he's supported veterans and the disabled. the tax returns would show the amount of his charitable donations.
but we haven't seen them yet. trump has said he'll release them in due time, but they're complex and he's not in a big rush about it. as you note in that tweet, he struck back at romney, not only saying he was a fool because of his own tax issues, but also saying that now he's trying to play tough guy. >> tracie, thank you for that. i wonder, despite the name calling back and forth and the different charges from these two republican leaders, i wonder if it brings up a greater debate over tax reform in the u.s. tracie, thanks for joining us. well, a powerful storm system is heading for new york city after dozens of tornadoes from louisiana to virginia killed a the least eight people. nbc's miguel almaguer sent this report. >> reporter: tonight this is what they feared. funnel clouds, possible tornadoes, a weather system still packing pounding rain and whipping winds. with at least four dead today, there's another night of dangerous weather still ahead. >> look at that. oh, my god. >> reporter: the forecast calls for 70-mile-an-hour winds.
tens of millions in the danger zone. the wicked winter weather a powerful linear system, fueled by the strongest el nino on record, raking across ten states. the storm mangling the landscape, ripping apart homes and taking lives. >> the glass was breaking. you could hear things flipping around outside. i mean, just total carnage. >> reporter: with three killed on tuesday and dozens injured, convent, louisiana, was in the bull's eye. 160 homes demolished. >> we went from the floor to the ceiling to the wall to the floor. >> reporter: braxton, his wife, and three small children rode out the storm in this trailer. they were pulled into the air and rolled over several times across the street. savannah clinging to her daughter as she was being sucked out of a window. >> she was like flying out the window literally. i had her by her ankles. >> reporter: with up to 30 tornadoes reported, in pensacola, florida, a twister smashed apart an apartment complex. it's said to have traveled two
miles, described as a war zone. homes shredded, rvs flipped over, cars tangled in trees. with the same weather system triggering up to 18 inches of snow in the midwest, at least 67,000 have lost power and now more could too. a state of emergency as the threat across the east isn't over yet. >> that's some hefty weather there. hello. it's still there. international superstars rihanna, drake, justin bieber raised the roof at the brit awards in london last nights. stay tuned to find out which other acts got hearts pumping, people jumping, a bit of jiving. more on that in a couple minutes here on "street signs."
♪ everybody loves the things you do ♪ ♪ from the way you talk to the way you move ♪ >> well, adele was rolling in the awards at last night's brit awards, taking home four trophies, including best female british solo artist and best album. other winners include justin bieber, coldplay, one direction. they also led a tribute to david bowie before the singer's band performed a medley of bowie's greatest hits. >> good for adele. after the grammys performance kind of fell apart, she sounded absolutely beautiful. >> and a force to be reckoned with. whenever the "hello" song comes on, i try, but i don't quite do it adele style.
>> that one i'll take for karaoke. >> my poor neighbors. >> save that one for the pros. meanwhile at apple, tim cook has said the fbi's request for a way to unlock iphone encryption, is, quote, the software equivalent of cancer, adding he'll take his appeal to the highest levels of government. joining us now for more, wilfred frost joining us from cnbc headquarters. wilfred, despite the fbi's suggestions that this is a one-off special permission, tim cook is not backing down here. >> absolutely right, nancy. that cancer quote you just mentioned getting a lot of headlines in the press this morning. the other one, this is not about one phone, this is about the future. exactly right as you just said, echoing that sentiment it's not just a single issue. it would change the relations that the government has with tech going forward. so once again, a defiant tone from the apple ceo on a dispute is that's really divided opinion here in the u.s. i suppose until a couple days ago, at least the tech world was
united behind apple and tim cook. of course, bill gates came out on tuesday to back the fbi. but he did say this is only a backing in terms of one particular phone. something that tim cook says is not possible. i will say this interview, if you watch it in full, he made a compelling case, tim cook. it might help him win over a few more people in this divided dispute thus far. in particular, he highlighted the point that as an american and as an american company, both he and apple find it very uncomfortable going against the government, but they believe so fundamentally in their view that they have to maintain that position. anyway, the debate continues over that. on another point with apple, there's been news overnight they're trying to beef up security on their icloud offering. at the moment, the icloud is an authority where authorities are able to claim a little bit more information than on the iphone. it's seen as raising the stakes
once again a little bit. certainly this dispute will continue. on a similar but different note, yesterday the u.s. government did take a meeting with executives from the worlds of the silicon valley, hollywood, and advertising in order to try and come up with new plans to take on isis on the technological and media front. it's an area where isis is seen as being particularly strong. the military attacks thus far aren't doing enough. the reason i highlight that is twitter has got some kudos over the last six months when they have aligned with the government and taken down isis-related twitter accounts. that's helped their pr in a way that clearly apple, at the moment, are doing the opposite and not siding with the government. so it's interesting to see two different perspectives. either way for apple, although the public opinion is divided, their share price over the last month has been between $94 and $98. right now bang in the middle of that at $96. so despite newspaper headlines, it hasn't really moved the share
prices so far for tim cook. >> wiclfred, we've got to go. thank you very much. we have some breaking news. >> the deal between foxconn and sharp is facing a delay. sharp is delaying saying they need to fully understand it before carrying it on. sharp's board had accepted a takeover offer from its taiwanese rival. we're getting new flashes as we speak saying it received a list of about 350 billion yen in contingent liabilities on wednesday. it wants to review this new financial investment information. foxconn is looking at potential financial risks here that they need to re-evaluate. but they say they haven't given up on the sharp deal. it simply needs more time. this is a crucial deal foxconn has been trying to strike for a few years.
it's really all about the display, when we talk about the crystal display they want to supply for the apple phones. they want that higher margin product. >> and also kind of from a cultural or political stand point, the japanese tech sector is so insular. this is a deal, it's really a big deal, if it happens. >> the amount as well. we're looking at $5.8 billion. >> in other news, facebook has rolled out its new reactions feature. for moments when the like butt to on just isn't enough. in addition to the original like button, users can choose from ha-ha, sad and angry. i like the emojis, but why do i have to react with a strong emotion to everything these days? also in the beginning when these
emoticons first came out, don't send me kissy eyes. >> a bit too much. >> the one person you love, yeah, send me hearts. but when everybody is sending you heart eyes. >> i was quite happy with the simple thumbs up. did it for me. no need to show the tears, the lovy eyes. >> it waters down what a real emotion is because how do you then say i love you if you're saying i love you to everything. >> that's true. >> a million hearts with everything. >> they can be easily misread. >> oh, easily. >> my mother has a habit of the raise the roof. sends that for every comment. i can't work out what it means. >> when everybody says lovy eyes, do i send it back? i don't -- you love one person, right? you don't love a gazillion in the same way. >> but i do like that the most commonly used one in the test was love. we should take that as a good sign. >> i use the one that's like -- >> surprise.
>> mine is the dancing cha-cha girl. anyway, maybe netflix is your thing. now netflix and chill for longer. netflix is updating its mobile phone app to stop users eating up too much data allowance while watching content. new settings will allow customers to binge watch by switching off with new data. these are the data saving features, that is. this was announced by the company at the mobile world tech congress in barcelona. i suppose the good news here is easier to binge, just in time for the new "house of cards" release. i don't know if you're a fan. i haven't watched it, believe it or not. it's that good? >> it's one of these things, the first season was the best, but if you're into it, still worth watching. >> i know myself. if i start on something, you end up watching all of it. i keep myself away from all of that. unless you have an extra 200 days to spare. >> true, but now they're improving it on the go. you can do it on the treadmill, the train. >> the treadmill. that's a really good one.
keeps you going. listen, a lot of you have been writing in. sorry, by mistake i deleted the folder. it was my fault. i couldn't see anything. but it's back now. we've got a whole bunch of people writing. linda writes in talking about what should be done at g-20 in shanghai. central banks are pushing on a string. low interest rates should force people into investing, but it's not going to happen, she says. she thinks that shanghai has to drum up a universal campaign to popular participation in stock markets. that's one view coming from out there. gary, good morning. simon talks about if tim cook's house was raided, if a bunch of things happened to him and base lit authorities had to get information about doing things to him, then he would for sure unlock the iphone. that's what simon says. david writes in also talking about how 20 years of zero rates didn't work in japan. this is with regards to this coordinated stimulus suggestion. he's saying helicopter money is
probably the last chance saloon. could i suggest 10,000 pounds for every adult in the u.s., the u.k., and europe for starters. >> that one's not going to happen, i'm afraid. >> probably not. wishful thinking. >> as we get closer to that g-20 meeting, hopes are still high for some sort of government help after a lot of doubt over what central bankers can do going forward. today, some good earnings news helping stocks move higher. these gains we're seeing across the board need to be kept in perspective. >> so the u.s. markets opening here in a couple hours. slightly mixed on the open. i call that a flat open. just a quick mention of this. they're essentially saying there's a rising risk of a global recession. they talk about there's a bigger increase in uncertainty. they're cutting their global growth forecast from 2.7% down to 2.5%. they say taking the chinese data into account, which some say is
a bit iffy, but they're looking at genuine global growth barely being above 2% year on year. and they do anticipate that the ecb and the bank of japan will be easing more but providing only limited stimulus. they do prefer fiscal easing or helicopter money, as they say, as reflation tools out there. so that's one of the latest notes from citi making the rounds here earlier this morning. >> that's the big fear for some of these investors. if we get to a recession, we get a bear market going forward. we'll see. some others more confident on the data, of course. >> yeah. >> but that's it for today's show. i'm nancy hulgrave. >> i'm louisa bojesen. have a fantastic day. stay tuned to the channel. check out online as well. see you tomorrow. blan
good morning. breaking overnight, chinese stocks plunge more than 6% in the worst session in more than a month. >> warning, citigroup fears the risk of global recession is rising. we'll tell you why. >> and apple versus the u.s. government. new this morning, why ceo tim cook says unlocking the iphone in question would be bad for america. it's thursday, february 25th, 2016. "worldwide exchange" begins right now. good morning. welcome to "worldwide exchange" on cnbc. i'm sara