Transcripts For CNBC Street Signs 20240713

Largest ipo but falls short of the 2 trillion target positive signs of a trade deal as President Trump says talks are moving along well and beijing says it will wave tariffs for some u. S. A agriculture al products. In a deal worth 3. 2 billion pounds for the Phoenix Group it is the last trading day of the week you can see behind me, there is a lot of green already in the european heat map. This is after the positive hand over from wall street. Some optimism again about those trade talks. New comments from President Trump saying the trade negotiations are on track and going well that gave a boost to wall street overnight as well, we are seeing positive momentum. Here on some reports from the Chinese Finance Ministry saying china are willing to make exemptions the narrative about trade has switched to positive again we still have a lot of green on the board. Stock 600 up about 0. 3 percent ant point. Despite the red we saw in asian markets, it has been a heavy week for Global Markets. Today up 0. 3 of a percentage point. Lets get to some individual countries. Ftse 100 having a positive session today after a couple of days of negative up 0. 6 this morning tonight will be the last opportunity for debate between the Prime Minister Boris Johnson and option leader. So all eyes on that this evening ahead of the december 12 general election people have been watching the polls very closely to see whether or not the tory lead will compress over the next couple of weeks. Something to keep an eye on. The dan up about 13,000 now. Weaker data out of germy production weaker at about 4. 3 year on year after weak factory orders yesterday while the index is doing well, ill remind viewers that the macroisnt that positive we did have some is weak production numbers there cac in france up about 0. 5 Percentage Points. We had huge demonstrations across paris about 800,000 people in the streets. A transport strike over proposed Pension Reforms out of the government the index is brushing some is of that off it is trading in the green but you want to watch that closely i did say the hand over from asia was positive. We have tech up about 0. 3 percentage point in line with some of what we had in the u. S basic resources also tend to do well on days when china rebounds Construction Material up 0. 5 percentage point Construction Material in europe happens to be the best performing in all of europe this year year to date, it is up north of 32 Percentage Points who would have thought in a year that Construction Material would be the best performing on the down side tell cos down about 0. 1 percentage Point Health Care also shy of the flat line a more positive start to the day. All eyes will be on the u. S. Payroll numbers. Expect to see an increase from last month investors will be watching those average Hourly Earnings closely. Expected to come in about 3 year on year reuters has righted that carrying the lion share with a cut of 500,000 the news that the group will shoulder twothirds and nonmembers will be responsible for the remaining third. Brent is trading high this morning. And wti crude is up 58. 43 a barrel right now happy to day dan murphy joins us from the meeting in vienna what has it taken to get to this point over the last 24 hours it has taken a lot. The price trading mostly flat this morning that means this meeting will be a real catalyst for the market it gets under way and certainly this meeting has been turned on its head we have been discussing how ministers are likely to extend the production deal. Then likely to the iraqi minister suggesting that a 400,000 cut would be necessary. Day one, ending with a lot of contention the final press conference would be cancelled some walking out before it was even finished. The wash out is a cut that would see 500,000 barrels coming off the market this could have Significant Impact on the oil market moving forward. Want to bring in our next guest now. The chief economist at august media. Good morning to you. Do you think at 500,000 barrels, is opec cutting too much too soon i think the actual level is probably isnt a bad number. It is slightly oversupplied if they stay where they are 500 probably would be enough the big question is can they deliver and get people like iraq and nigeria to achieve compliance are the russians going to play ball are the saudis going to be in compliance a lot of questions saying this is going to be fulfilled twothirds opec, onethird nonopec ive heard that number. Be yes, you would expect opec producers would bare the bulk of that burden and it may be the saudis and others that said if you play ball with us, well shoulder the bulk of that burden if we see 500,000 barrels coming off the market, it would deepen the cut out to 1. 7 Million Barrels. What impact would this have on the market if they achieve that, it is pretty important we didnt see the First Quarter being a real problem for opec. We thought second quarter, third quarter, the potential for surplus was greater. Well see if they revisit in march. What is it like working coming into 2020 and 2021 . Some have said opec would have more of a market share problem in the future, particularly now that weve seen title go from 500 Million Barrels to 2,000 barrels in 2019. Even with slowing in the next couple of years, which we think will happen. Opec will chase the market down if they want to sustain prices they can have market share or price. They cant have both do you think tide will continue to rise in 2020 and 2021 we do we have total supply rising but slower than it has over the last few years. What about demand, how does that look . Peoples expectations for macroand Oil Demand Growth oscillate daily on President Trumps views on the likelihood of a trade deal with china we think there is a little bit of a rebound next year, which sort of helps get opec plus out of jail. Problems with global trade may be an optimistic scenario. Do you expect a deterioration in fundamentals . No. We think there is a little bit of surplus next year we have demand accelerating next year because of the 2020 effects. Normal seasonal weather is a production we recognize there are down side risks for that demand forecast absolutely. Bring me back into the room as it relates to today. What does the future look like we saw the russians walking out. We saw them being excluded how does this relationship involve future as the dynamics continue to shift . I think it is quite dynamic that they had to postpone their celebrating boat trip last night. You are starting to see strains in the relationship. The russians saying Russian Companies are saying we want to be able to push through our investments and the supply again. I think opec is very challenging. A total break up of the group though it can never be discounted. Lets see if they deliver upon it in the First Quarter. Certainly a lot of pressure on these guys. We appreciate the quick take today. The chief economist back over to you i pointed out before. We are expecting ministers to arrive in the next few minutes well try to grab them on the way in as day two of this opec meeting gets under way thank you for that. Swiss re has agreed to sell the british Insurance Unit to Phoenix Insurance group for 3. 2 billion pounds coming up on the show, another twist in the trade saga between the u. S. And china all of that coming up. vo the moth without hope, struggles in the spiders web. With every attempt to free itself, it only becomes more entangled. Unaware that an exhilarating escape is just within reach. Defy the laws of human nature. At the season of audi sales event. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Im not your charity case. I am not your excuse to buy a new dress for the annual fundraiser. I am not the poster child for your big donation. I am out of debts and in my own home. I am off opioids. Im graduating on time and on my way to a great job. I am. We are. What it means to live united. Welcome back to street signs. The u. S. Trade deficit in october was the narrowist in almost one and a half years. It fell to 47. 2 million after it fell to a decline. The deficit with china fell to 1. 4 to a little more than 31 million. More mixed messages on a trade deal President Trump struck an up beat tone and said talks are moving along very well china insists that tariffs on china ea chi chinaees products must be lifted we have more from the capital. China is extending an olive branch saying they would waive tariffs on a number of pork and soybean products china imposed 25 on u. S. Soybean and pork the Trump Administration will likely welcome this move President Trump has been demanding that china buy more u. S. Agricultural products and President Trump wants china purchases at 40 to 50 billion a year and to say they wont depend on Market Conditions or trade operations that would be difficult for beijing that rei hterated today that china buys imports based on market needs we have been listening to some commentary the last couple of days visavis digital taxation you may recall when the president was in london for the nato meeting and they imposed tariffs on france. We are hearing now from the french finance minister saying france and the partners will reject the u. S. Proposal for the optional approach for tax reform i think what hes saying there is that it is not optional he calls on the United States to negotiate an International Tax reform and good faith which is not an optional basis. Finally saying europe should resume for the tax even if talks at the oacd fails. Interesting, they were talking about luring Steve Mnuchin to paris for these talks with bruno it seems like those talks between now and christmas looking less likely. And with france on the trade war and europe as well bringing it back to the original discussion which is china u. S. Good morning to you. Lets bring it back to the prospects of phase one trade deal likely, unlikely. The ping pong continues. That deadline is just one week away how much is the investor optimism around this deal given the conflicting message we are getting this week . We only have to go back a couple of days when it was a sea of red in the market there would be no resolution for the trade war with china even post the u. S. Election in terms of investor impact, it is really interesting where in the world you are. In the west, a lot more emphasis seems to be put on trumps rhetoric it is a lot more understanding in the uk and europe that actually, it is asia that feels the brunt of this. I was in asia in october and they had the opposite feeling. They say theyll be fine there are a lot more growth there. They say trump is only hurting himself with this continued rhetoric and yet, there seems to be a high core relation between the numbers and trade. This year, Global Growth gets impacted as well we see that in manufacturing numbers. There is a big disparity in growth and Asset Classes stocks up 20 this year. Can that continue in 2020 if that isnt supported i think you are right being looking back historically, you can see both completely drop off. There have been warnings about the impact of continued trade wars and what that will do to the Global Economy in the past or in investing 101, they would say the stock markets are not economics. You only have to look at three months of the last year where we saw increased concerns about recession, Global Markets fell Even Oil Prices fell when we bottomed out on christmas day. Three things do go hand in hand. Trade and growth and at the very least, if they dont fall together, they increased volatility together. Can i add another leg to that stool. The idea around the u. S. Consumer being so resilient over the last couple of months. With all of the trade wars and salvos, what would it take for that Consumer Confidence in the u. S. To start to drop . Is. We saw the deficit drop in the u. S. Part of that was down due to the import part of that was a weaker u. S. Consumer sorry, can you hear me the sound has gone from my ear it is a bit conflicting. We are expecting figures to be weaker today the Unemployment Rate is still extremely low. There are signs at the edges that the u. S. Consumer is a little less confident and sentiment may be drifting from the base. You can argue years of uncertainty. Weve seen the impact that has had on the investor and business decision making. Now this week, weve had moodys down grade the Banking Sector. For those banks that are more exposed, do you see a potential of the bounce back or is this about the lower rate environment . When you look at the d domestically focused uk bank certainly when moodys announced this week that out look was weaker, theydo downgraded it still on historic levels considerably below where this he were in 2006, 2007 from where they were before the Global Financial crisis. Although banks have recovered, there is further to go i thought the timing of what moodys was saying is there is potential of resolution around the corner with brexit that reflexes the almost paralysis in the uk Banking Sector because of the political uncertainty. Just asking you about another sector that got hit recently that is the property sector. We heard of the m and g Property Fund 2. 5 Million Pounds being affected is it mostly brexit related . It is important to clarify the difference between residential and commercial that fund was commercial Property Fund. The reason were to do due to the exposure to the Retail Sector where they have seen considerable head winds because of the structural changes and less foot fall because of brexit uncertainty. People arent spending as much in the uk because they dont know what is to come next. Well leave it there. A lot of uncertainty thats one thing we know for sure the head of investment analysis. Thank you for your time today. In berlin, the Democratic Party begins the threeday congress swaring in the new Party Leaders that unexpectedly beat out the rivals last week what could we see happen over the course of this weekend when it comes to the coalition . Actually, it is getting more unlikely that they call off the grand coalition. It is a remote chance. We should actually focus on that party meeting. The party left is still considering whether to stay in the grand coalition. It is that left wing that voted the two new leaders in essentially, there is a lot of disgruntalment inside the social democrats. They feel cheated. The central focus point of the campaign was to actually question the existence of the grand coalition and have a vote on it during that Party Convention the back paddling now will not go down to the spd delegates the convention is just starting now. We hear throughout the day what is going to really happen at that Party Convention. Two new leaders will bring the sbd a tad more to the level. Whether that already means we have to get more spending. Something that International Investors are more interested in is highly questionable the government stepped out saying we are going to reopen that contract to have the special needs of the spd address but what we can do is to look inside the contract. Whether there is some leeway or room for interpretation that we can address those issues from the social democrats clearly, if they are insisting on reopening that contract we could see the cdu force them to leave the grand coalition that option is not completely off the table but less likely as i was saying before. Now back to you. Thank you so much stay with us coming up in the show, saudi aramco ipo becomes the Worlds Largest listing but falls short of the kingdom target. Well explain why in just a few minutes. Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. danny 12 hours . 20 dogs . Asy. Wheres your belly rubs . After a day of chasing dogs you shouldnt have to chase down payments. vo send invoices and accept payments to get paid twice as fast. danny its time to get yours vo quickbooks. Backing you. Welcome back to street signs. Im willem marx. And im joumanna bercetche. These are your headlines bearing the burden. Opec gears up for a 500,000 barrel a day cut saudi aramco shares at the top of the range as they prepare for 25. 6 billion in the Worlds Largest ever ipo but fall short of the 2 trillion target. Optimism as beijing says it will waive tariffs on some of the agricultural products. The house moves to file for impeachment as House Speaker pelosi accuses him of abuse of power. Our democracy is at stake our president leaves us no choice but to act because he is trying to corrupt once again the election for his own benefit we are seeing a more positive session for european equities. Trading nicely up in positive t territory quite positive the hand over is positive. President trump saying the trade negotiations are going well. Ftse 100 up about 0. 8 percentage point higher we are pairing back some of the losses it has been a heavy week for the ftse 100 not the least because the pound is doing well. The dax in germany up 0. 3 percentage point seeing a rebound on some of the industrials. Worth mentioning as well that we had Industrial Production numbers come out this morning on the weak side, so the manufacturing picture for germany still some what on the weak side. Cac up 0. 5 of a percentage point. Shurging off some of the developments there cities in france set back by the second day of the public transport strike up to 800,000 people are on the streets demonstrating. Hasnt really affected the index but something to watch out for ftse mib in italy up after a good start to the day. We are seeing weakness of the dollar we had been closer to 1. 10 but with the weakness, weve seen a rebound with the euro. What is happening here is more of a function of the green back. Dollar yen, we are seeing about 0. 10 percentage point. Cable, we have trading likely weaker today still 1. 3120 weve moved a lot in the last couple of days all eyes will be on those polling into december 12 general election tories still had the majority. The question is whether they can hold on. Big questions to be answered in the next week or so. Trading slightly weaker compared to the dollar. Bare in mind, we have the ecb meetings as well we have a big daytoday coming up. Expectations are about 187,000 on print and 3 when it comes to average Hourly Earnings year on year investors will be watching closely. In terms of futures, all three indices looking like they are opening in the green dow up about 70 points and nasdaq up about 30 points as well saudi aramco will raise 25. 6 billion more than ali babas initial listing it means aramco is more valuable than apple with a value of 1. 7 trillion. Our colleagues joining us from outside that opec meeting. Guys hey, as much as we love talking about that aramco ipo, i want to discuss what we ar doing here on the sidelines of the opec conference. In 30 minutes, well start to see the arrival of the opec plus ministers for the meetings to commence we are talking about cuts of 500,000 barrels plus per day we are always seeing these ministers arriving i got to tell you, sources have told me, listen, in theory, there is already a deal to the cut. What is happening later today is finalizing that. We are talking mainly about russia, arent we . Exactly this deal is coming together it will be interesting to see how these cuts are divided it seems like some sort of deal was agreed to towards getting the russians on side that is significant because this alliance is crucial for the overall deal to be able to go ahead. Absolutely, this will speak to the leadership of the current safeguardy oil minister. Remember the former Saudi Oil Minister was able to keep them over the last couple of years and really allowing them to cheat on that agreement and to keep them within the fold and seemingly as if the saudi minister came on and said we need to cut back on the cheating and bring people to the table and make significant cuts. All of that on the back of the pricing of the aramco pricing. And his Royal Highness addresses the group at the closing of the first meeting you mentioned aramco this has been looming large over this meeting as well it was mentioned that the saudis would like to see a Higher Oil Price to get that going well how are investors to react to that since we have pricing at the top end of the range there is a lot of pressure now can you see the nigerians arriving here. A lot more to come the rest of the day. Well bring it to you live we have to get in there now. Including an interview with his Royal Highness the prince later on cnbc. Get inside and chase those guys down. Meanwhile, japans government has approved 120 billion stimulus package the largest stimulus that tokyo has announced for three years. Hsbc leader gave their take on the japanese economy earlier if you look at japan, why would you be so pessimistic . We have seen peek and recession fears. It probably doesnt make much sense to price in another recession scenario japan, pretty much most of the market comes from exports. On average, the domestic economy does not produce profits on Japanese Companies all right bringing in conversation with the codirector of eaton banks. Starting with japan and the stimulus announced, it feels like it is flying a little under the radar. Certainly one of the major countries in the g 7 to actually come out with a package of this magnitude. Nikkei is only up a quarter of a percentage point why do you think this has not captured attention i think globally, it is a big theme. With the stimulus in europe. In japan, there is fiscal fatigue. Every year, they do a supplemental budget. They are obsessed with that cat tax. To some extent, the new fiscal budget tightens that tax. How do you think of japan as an investment play . We actually like Japanese Equities we used to be short the currently. We like to belong the currency right now, japan is a better story than more investors think. There is a pretty good reform going on when you look at gdp growth per capita it is pretty good. Demographics are still challenging. They are having more immigration in japan it is not perfect but there has been a lot of change japan is some Place Investors underappreciate the good going on there how do you think policymakers in tokyo might go about trying to unwind the Interest Rates which they were very much the leading edge great question. One of the leading things we are thinking about is the switch from monetary to fiscal policy and the problem with negative Interest Rates they are an attack on the Banking System countries like japan and europe that are bank led, that is a real problem theyve set the rates. How do they get out of it is the real challenge structural policy, thats the best way to get going there in my view. Do you think Central Banks in japan and europe have the tools outside of rate setting in order to provide the environment that the slow Economic Growth rates require. Another good question look, Central Banks cannot be a panacea throughout the years it has shown negative rates probably do more harm than good. Im a fan of doing qe and asset purchases or buying bonds. What the fed has done, they wont call it qe but buying treasury bills you are not pushing up asset markets but providing providingy to markets even though they are not, lets say, to your term buying assets they are buying bonds, essentially, it is all the same thing. I want to bring you back to europe and what you think happens there. There has been a lot of talk here about ecb shifting tax. You mentioned it, moving away from reliance and a bit more ownness on fiscal spending next year are you optimistic that 2020 will by the year we do see even more fiscal spending coming out of eurozone and if so, what does that mean for bonds . Optimistic. I dont think well get it in one year but under Christine Lagarde focus, shell be more focused on Structural Reforms i know you had live from the sbd conference there is potential in germany with the green Party Getting more power trying to get more fiscal stimulus in germany. I wouldn i wouldnt bet on it all in 2020 but it will be coming. France is waking up to the second day of massive upset. Unions challenge the government over a planned pension reform. Filing this report from the french capital tear gas, fire and fury in paris as the biggest strike in decades descended into violence. Riot police and the battleground nearly a million marched Police Officers and doctors joining garbage workers angry at Pension Reforms. Transit across france stopped. Schools and the eiffel tower closed i feel a bit frustrated i spent a lot of money protesters tonight threatening to cripple the country and the economy. More strikes are planned tomorrow and more protests saturday this is a battle of wills which could make or break the french government and its president nbc news, paris. Coming up,impeachment drama intensifies as the house moves to file articles of impeachment against President Trump. More details after this break. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. My mom washes the dishes. Before she puts them in the dishwasher. So what does the dishwasher do . Cascade platinum does the work for you, prewashing and removing stuckon foods, the first time. Wow, thats clean cascade platinum. Here, it all starts withello hi . How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. Welcome back to street signs. History in the making. U. S. House Speaker Nancy Pelosi has instructed democrats to draft articles of impeachment. House speaker yielding the power of her office to remove the president from his today, im asking our chairman to proceed with articles of impeachment. Saying President Trumps alleged wrongdoing strikes at the heart of the constitution. Our democracy is what is at stake. The president leaves no choice but to act because he is trying to corrupt once again, the election for his own benefit three, two, one the president tonight, celebrating the season while counting down the days to his likely impeachment that could come before christmas. It is a hoax. A big fat hoaxes saying if you are going to impeachment, do it now fast so we can have a fair trial in senate so our country can get back to business the country is gearing up for a trial early next year in the senate where the president and his allies are confident he would be acquitted the speaker gave a speak on National Television to push forward her rush and partisan impeachment. The president reiterating his demand many key democrats be called to testify including adam schiff and joe biden who today confronted an iowa voter who questioned his age and accused him of having sole access to the white house. Biden said he sent his son to serve on the board of a ukrainian country. Youre a damn liar, man thats not true. I seen it on the tv youve seen it on the tv. Speaker pelosi leaving a press conference asked by a reporter whether she hates the president. I dont hate anybody. I pray for the president all the time, so dont mess with me when it comes to words like that. That was u. S. Politics. Here are some british politics, Jeremy Corbyn is speaking at an event in london. He has unveiled some documents hes not yet shared with the media in which he talks about the details around trade between Northern Ireland and the rest of the United Kingdom hes trying, it seems, to go to questions of trust involving Boris Johnson. Take a listen. Ask yourself, if they hid these reports and the ones i revealed last week, what else are they hiding . What else will they sell you out on at every stage of this campaign, Boris Johnson has chosen to deepen divisions his whole political strategy is to turn one side of the Brexit Debate against the other i start from a very different place. I believe a Prime Minister must talk to and listen to the whole country. We have to bring our divided country together if, as a result, people accuse me of talking to both sides at once of a Brexit Debate, so be it im proud to do that why would i only want to talk to half the country i dont want to live in half a country. Thats why ive set out honestly how a labor government will deal with brexit so we can bring our country together and get on with delivering the real change people are crying out for. First, labor will quickly secure a sensible deal based on the terms weve already discussed with the european union. Including a new Customs Union and a close Single Market relationship and guarantees of rights and protections unlike Boris Johnsons fraudulent brexit, a deal on our terms will reexpect the priceless peace prospect of Northern Ireland and peoples jobs and put that deal on vote in less than six months. Those who want a deal without selling out nhs will be able to vote for that. Those who want to remain in the eu will be able to vote for that, either way, only a labor government that was Jeremy Corbyn speaking in london we are back to vienna where we are seeing the arrival of some of the Oil Ministers it looks like the Saudi Oil Minister has entered the meeting. That is something well continue to watch over the course of the day. Another major data point to watch out for. U. S. Nonform payrolls are expected to receive a boost from the return of striking gm workers. Unemployment rate is set at 3. 6 and average Hourly Earnings are expected to rise 0. 3 on the year our guest still with us, it feels going into this, markets are not as excited as they have been in the past looking at implied vols and fx, they are the lowest ever why is that the case were in a low fx vol environment. Jay powell has really stated, the fed is on hold they did their 75 basis point rate cut this year other things in the markets. U. S. Politics, british politics, oil, aramco and all of that. Weve had a slew of quite under well amming u. S. Data. Manufacturing and ism, nonmanufacturing services as well it feels as though the market is posed for a weak market. I feel the market has gotten weaker from six months ago to nine months ago. Given weve had an easy financial conditions with 75 basis points of cuts a year ago, markets were expecting hikes. That is 150 basis points of easing today versus where we thought wed be today versus 12 to 15 months ago easier financial conditions starting to flow through the economy. It is in good shape, not great shape. There is the trade war and not politics what happens to the dollar in terms of strength. I think the dollar weakens. President trump wants a weaker dollar a lot of constituents on a weaker dollar. Thank you for joining us, the codirector of Global Income and portfolio manager. Looking ahead, how are u. S. Futures fairing up this morning . Three major indices are seen opening in positive territory after a largely positive session yesterday. That is it for us on street signs. Worldwide exchange is up next. vo the flock blindly falls into formation. Flying south for the winter. They never stray from their predetermined path. But this season, a more thrilling journey is calling. Defy the laws of human nature. At the season of audi sales event. danny 12 hours . 20 dogs . Asy. Wheres your belly rubs . After a day of chasing dogs you shouldnt have to chase down payments. vo send invoices and accept payments to get paid twice as fast. danny its time to get yours vo quickbooks. Backing you. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. It is 5 00 at cnbc here is your five at 5 00. A u. S. Economy gut check as investors await the all important november jobs report due out in three hours from now. Shocking report from uber addressing concerns over safety and Sexual Assault allegations against drivers. And it is day two of the opec conference where Brian Sullivan is live with the latest there. Welcome to the 1 trillion