Transcripts For CNBC Street Signs 20240713

Worlds largest plane maker surpassing boeing. Questions mount over Carlos Ghosns escape his lawyer will hold a press conference on january 8. Good morning, everybody. Happy new year and thank you for tuning in to cnbc. On january 2, a lot to get through today. We are getting the final eurozone manufacturing data for december that comes in as a whole higher than the flash estimate coming in at 46. 3 versus the initial estimate of 45. 9 the manufacturing down turn deepened towards the end of 2019, we are seeing signs things are beginning to stabilize at least in the right direction in terms of individual countries just before street signs started, we would have had the final manufacturing numbers that came in at 43. 7 versus 43. 4. Germany is one of the reasons. The ago ra gat number is higher and france coming in in italy, coming in at 46. 2 versus the estimate of 47. 6. We are looking at better numbers for germany and france, worse for italy. On the whole for eurozone, the numbers are a little higher than expected for the year for all of 2019 to the tune of about 2 as well to the dollar last year the global cio of Deutsche Bank will join me for the next half hour or so your take for the pmi numbers that have come out this morning. It seems to suggest that the data in europe has softened but is stabilizing for the fourth quarter. Thats good news for the beginning of the year. Happy new year from my side as well we have seen the trend, it seems to stabilize a little bit. I think thats good news in order to enable euro land for the recession. Also a forecast for 2020 it is still lower growth to be expected for the eurozone, we expect 0. 9 growth, no recession if you look at pmi, it is far below 50 still no recession i think thats good news for 2020 no recession, we spent all of 2019 talking about the european recession. No recession in sight. Not in europe or anywhere. Your thoughts on euro going into 2020 it has been pretty boring if im honest weve seen a very tight range between 110, 112 do you see that changing this year not so much to be very honest the fed also not being interested and the u. S. President not being interested in a very strong dollar. We could imagine for 2020, thats probably a bit different for 2019 if the euro gets a little bit stronger because we dont expect further measures from the ecb we are not far away from here. Slightly stronger euro i think we have seen the pique of the u. S. Dollar from that perspective, wouldnt be surprise if we see some tweets from President Trump again to talk about not having a strong dollar. It could be different that we get a slightly different euro. From the move from perhaps a trade war to currency war. Ill come back to you. The global cio of Deutsche Bank the first trading day of 2020. How are markets fairing . The roaring 20s are off to a roaring start. Everything trading nicely in the green. It was a very Strong Quarter to end the quarter in 2019 especially in the coming weeks, the weeks after the general election 0. 9 of the ftse the dax up 1. 2 . All eyes on airbus one of the strong names today in the stoxx 600. The italian index off to a good start. A solid start for European Forces and mainly around the potential signing date of the phase one deal between u. S. And china. China says it will lower the lev levels of reserves the banks must hold freeing up about 15 billion in funds about the eighth time the bank has cut since 2019 the triple r rates will stand. This was the main catalyst for equity moves overnight the shanghai composite up. We are seeing a big move in the minors with clear exposure there. In the uk, up 2. 7 a lot of these are actually clustered in the uk. One of the reasons they are having a good start to the year and the decade lets talk about some of the price action in china and the asian markets. I believe this is the eighth triple a cut since 2018. The chinese authorities are really going for it when it comes to the triple r cut, how are markets reacting very positively a happy new year to you and your viewers there in europe. It is a very positive start actually to the trading year not big bank losses or gains surprised to see that all green screen, you are looking at the kospi giving way to that 1 market fundamentals do not look bad signaling that the kospi may have bottomed out. That reflects what is happening with the u. S. china trade tussle there is a direct impact setting in on account what may come by on that equation we touched about the rrr cuts coming in. Helping to lift sentiment. You can see off the run in 2019, all of the year gone by. We are looking at those markets. Building those gains until todays session by the time we close trade looking up across the board. Mind you, this 115 billion injection coming in. Wondering if these triple a cuts are taking off on the ground the pmi read measures the gauge, it seems like things are dropping for the chinese economy. The slow down has found its base thats a reason why in the hong kong market, despite the protest going on on the sidelines. We have seen a face lylift and a good start all of these things come together to reference going into 2020, the big theme will be about growth recovery. The capture with the release of the q 4 numbers in signature poor and ending higher by 1 si singapore reported 0. 18 largely led by services. That put the spotlight squarely on all the Central Bank Access and whether it will come to the floor in the fair recovery and will spill over for the growth in the world at large. Broadly speaking, a very positive start to 2020 whether or not we can build on the gains in 2019, remains to be seen thats a good question with Global Equities having done so well if we take today as the test, the answer is yes. Thank you for breaking it down for us from singapore. More news from china, growth and chinas Manufacturing Sector continue in december pmi came in at 51. 7. Looking to an expectation of 50. 7 the u. S. And china struck a phase one trade deal easing the tensions between the two countries. Chinas decision to issue cuts on 850 products came into effect on wednesday according to the 2020 tariff schedule saying the addition was to cope with shortages. Pork and avocados are among those imports which come days after these imports would increase as part as a preliminary trade deal we dont have an actual nominal amount to which theyve agreed to President Trump has sette date to the signing of the phase one deal the ceremony will take place on january 15 at the white house. The u. S. Leader added that he would make a subsequent trip to beijing. A report said that countrys vice premier will make a trip to washington for the proceedings lets get back to our guest now the phase one deal is pretty much all done and dusted, do we have to worry about phase two . I think we dont have to worry about phase two but i would not expect too much from phase two. Phase one is okay and a success for both sides to get something sign the thing here is that we dont see a further escalation they are able to talk and lets say find some compromises. Im not sure it will come before election day 2020 this year. From that perspective, i would not put too much optimism in that we dont have a worsening but i wouldnt bet too much on china u. S. For solving everything it will take some time it wont be a full solution. Im not too positive on this one. It resolves some of the uncertainties for the time being and back to what we were discussing a lot of people talk about the risk of recession. A lot of those fears have subsided my colleague saying this could be a year of growth discovery. Investors will be looking for the economy, the stock markets and those that offer the most Growth Potential where do you see those pockets yourself first of all, i think we can be optimistic to the growth mission. If we compare the growth rates of our forecast for 2020 is lower. That is something we shouldnt forget given that, i would look at given the low Interest Rates, i would still say there is some growth and equity space but i would be really surprised if we can repeat last years performance. We are going 5 to 7 growth interestingly, if you look at a little bit longer time and not only 2019, we had a tough q 4 2018 markets if you have a rolling return, you see the last years also slightly coming down, which is reflected in the lower growth numbers. 5. 7 if we get there if thats another positive year, we could be very satisfied with that 5 to 7 return after 20 this year, thats not too bad. I was reading your report about the six big themes to look out for. You expect the push for fiscal spending to become more vocal but dont expect a fiscal boost. What do you think will be disappointing here euro eurozone or china the big question is what will Central Banks do they have been a driver of markets for a very long time now. The question is that the end of monetary magic because markets have reacted to this positively. Central banks will push for more fiscal policy. You can question the effectiveness. Im not saying it doesnt have enough tools but the effectiveness can be questioned. Now what you saw in china is expected by the markets and early in the year because Chinese New Year is coming very early in the year. That was expected but there is room for the policy in china they will ask for more fiscal policy the question is do we get a lot. The zero positivity the doubt. Not the mess of one. Our first theme and looking into this very carefully. Definitely could provide a disappointment well come back to you the global cio of Deutsche Bank wealth management. After a antigovernment rally turned violent in hong kong reporter the first day back at work in the new year 2020 about 200 pechl gathered for a lunch time prokeft largely peaceful and uneventful and they dispersed after an hour. This follows the new years eve march that had to be called off because of violence. Vandalizing at least five hsbc bank branches. You can see one of the mascots here with the eyes painted red, half of the face is black. Probably charred they tried to set the lion on fire hsbc now becoming the latest target after the banks sustain spnded an account reportedly used to support the protesters they said the decision was unrelated to the situation that the account was used for different purpose than stated and they are just adhering to global regulations last night, hsbr said they look forward to the speedy resolution of the issues reporting from hong kong on the joongoing protests there. New details warn of a warm reception of the auto tycoon well the gus that and more in a few moments. Janine Ghostbusters . Of course id love to take an informal poll. I used to be a little cranky. Dealing with our finances really haunted me. Thankfully, i got quickbooks, and a live bookkeepers helping customize it for our business. live bookkeeper youre all set up janine great hey you got the burnt marshmallow out delivery man he slimed me. janine tissue . vo get set up right with a live bookkeeper with intuit quickbooks. The easy way to a happier business. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. Welcome back airbus shares are trading at the top of the stoxx 600 after reuters reported the Company Became the largest plane maker for the First Time Since 2011 delivering 863 jets surpassing expectations airbus has overtaken boeing which has been hit by the grounding of the 737 max plane airbus did not comment on the figures. You can see a very good start. Up 3. 6 Percentage Points and up 60 . Very Strong Performance by airbus ams shares are lower achieving a 59. 9 stake in osram more than the 55 needed for its take every but less than the 75 needed to get access to osrams profits. They expect to close the deal in the Second Quarter you can see today that both of the relevant stocks are trading slightly under water ams down getting back to our guest. Lets go back to your out look and six big themes we talked fiscal spending. You mention we still see equity returns. Lets talk about the detail here is it time for a rotation out of Growth Stocks into value stocks . I think since august, we have seen some Interesting Development there. We had an event where there was a shift into intragrowth we have seen quite a rotation. We want to rebalance a little bit. Not to completely move out of growth because i think it is still long lasting and 2020 relevant theme and to balance it a little bit what we are looking for is value with predictable cash flows that can be very interesting theme in 2020 because the rotation we have seen could continue into this year. That is an important point to look for the other point in the market we want to point out is if you look at the economy and youve seen a lot of development positive one on the consumer side, mfrg has been hit and the consumer has been very strong value growth we look at little bit at the value going back to what you are saying about a value you look at history right now, there is certain markets that trade at a significant discount given some valuations that are prevalent in fixed income space. If you were an investor, would you say these were a good year to avoid given the relatively rich valuation we need to look into the portfolio very carefully and justify any position below zero in return. You cannot sell everything in fixed income what we are saying is we really need to have a look into 2020. Where are you positioned what is the risk you will take if you look at your decade that will kaflt the investors into something for the performance after such air nice year, 2019 thats a key point for this decade, i would say. What would you do on the emerging markets we saw annout performance versus em, does that concern you . Return wise, we prefer asia and latin america and we look at the corporate side Central Banks in emerging markets have more room. If the economy is getting weaker here, there is more room for them to act. They should do quite well. For us, thats a very interesting theme on fixed income side. To gain performance from excellent very clear views there you raise a good point those do have more Monetary Policy than developing banks well leave it there, the global cio. Stay with us in just a few moments, well look at the uk manufacturing data for december, which will be released when we come back welcome back to street signs. These are your headlines european stocks start a new decade from the green with all major indices moving higher after china cut its triple r again to boost the economy plrminers set out a deal. Shares move higher after delivering 863 jets in 2019 surpassing boeing. Questions mount over Carlos Ghosns escape from japan. He will hold a press conference on january 8 we have the numbers come half an hour ago. We are getting the uk equivalent now to bring you those details the financial manufacturing print comes in at 47. 5 a a bit higher than the estimate of 47. 4 in terms of the output pointing to 45. 6 versus novembers numbers. The lowest since july 2012 still painting a rather bloomy picture for the backdrop here in the uk there is a picture for the pound. We have it trading north of 1. 31 it has rebounded 1. 3220 is where we are at to the tune of a quarter a percentage point. We had a roller coaster ride in december for the pound at one point reaching 1 dt 35 and dropping towards the end of the year to around 1 dt 30 this in light of the lightly weaker manufacturing numbers for the month of december. Not Much Movement there. Investors will be watching closely especially if the dollar does weaken this year. 2019 was a strong year for the u. S. Dollar. All eyes on the currency and what that means for the ecb with the stimulus package in place. The dollar trading slightly further to the tune of about a tenth of a percentage point. European markets, a lot of action there, a lot of green on the board. Can you see every single one is trading nicely in positive territory after a very start 2019 ftse is up dax is up 0. 6 cac up around 1. 1. Airbus is leading the gains today on the stoxx 600 up north of 3 now officially the largest plane maker for 2019 having sold the most planes relative to its rival boeing and the ftse mib starting on solid territory. As for futures, we have seen them all opening up in positive territory. Dow up about 150 points. Again for the year, very, very sol solid territory going up can those gains be repeated . Lets see, still a lot of the year to get through. Another story youve been following closely. Carlos ghosn will hold a press conference after he fled for lebanon according to a lawyer representing ghosn he faces a trial in japan over allegations of misconduct. He has denied wrongdoing and said he has, quote, escaped injustice. Meeting with ghosn upon his arrival. Saying he warmly greeted the auto tycoon after he landed in beirut a leader denied the report this according to the turkish broadcaster. Ghosn reportedly through to beirut via istanbul. Officials say no record of this flight were found. So the plot thickens what was the method, which passports were found it is the first day of the trading year, lets not forget this is the first day of the new decade looking back at the key indices in china starting with the shanghai composite. We saw the huge spike posted after the crisis we reached the highs around late 2014 15. If you look at the performance of the last decade actually pretty underwell amming n p what about shenzhen skposity in china, more tech components in the last 10 years, up 46 not as much as the dm counterparts finally, lets take a broader look for all the markets at the end of the last decade. If you trace it back, percentage change a meeger 12. 7 . Lets bring in the Portfolio Manager of the Global Emerging Market Fund if they had i long margin, they would be underrealm how do you think about your time line we look at a number of factors as you said, there were problems and it didnt perform as well in the market. We have a check list we look at and at moment, it is much more positive than, say, a year or two ago it is sort of neutral. We had a prior guest on the show saying he thinks the value is in fixed income rather than equities we dont have that do you share that view do you share the view that if you want to be invested in something, it is em . In certain countries, its em bonds. If Interest Rates are coming down, that usually leads to a rally at some point. I wouldnt disagree. There are exceptions in there that might be more surprising. We have talked more about china as well and the trade war and Global Performance most out there think chinese growth will moder rate to around 6 what does that mean for where you want to put your money this year youve shown a k45r9 where the 10 year were quite poor and done quite well. The stock market returns dont always mirror economic growth. We might get the opposite. Chinese will be lack luster. We are not going back to 2016. We all worried about china overheating. Authorities seem to be calming that down. They seem to less key. You like china as a player then growth looks good and might well disappoint they said growth is not that strong we have seen reforms coming through. Weve seen reforms over the last couple of weeks continue it is all very gradualist. In the long run, positive. In the short run, mixed growth you are fortunate being on the show on the first investing day of the year. Investors are thinking they want to put their money somewhere, where should they go if you are selected within that, its a hugely deep market. There are some very Good Companies there that would cause competitors problems elsewhere, india has reforms like china has a credit crunch in the short term. Maybe well get a better opportunity for that china looks good goodwiner on the weighed of course i will be selected and wait for the money to turn around and be more aggressive. What does a weaker dollar mean for the emerging market does that make you more likely to be wanting to be invested in local markets here as opposed to hard currency . Definitely. It has been a strong head wind to other factors going forward, if the dollar would be weaker. That would be a tail wind. That is one thing we check for well leave it there. Portfolio manager from the fund at Ned Group Investments tensions between iran and u. S. Have been escalating over attacks. Leaders weighed in amid developments on the ground we have the latest reporter for a second day, violent demonstrations at the u. S. Embassy in iraq u. S. Forces firing tear gas as protesters set tires on fire and tried to scale walls while Security Forces stand guard. Late today, the iranian demonstrators packing up and dispursing after leaders ordered a retreat. Sending the troops to the region to counter the threat. We had some great warriors come in and it was instant no demonstrators made it inside the walls President Trump blames the attack on iran saying he would hold them responsible. Today, the countrys top religious leader hitting back on twitter saying, you cant do anything all part of a tense stand off with iran including an attack on Americans Last friday which prompted a u. S. Strike on the iranianbacked malitia last week i dont think that would be a good idea for iran do i want to, no i want to have peace. I like peace certainly they are walking very closely there you can tweet us to get involved in the discussion. We want to hear from you stay with us in just a couple of minutes, well talk Climate Change in 2020 our next guest will take regulation, technology and mark market stay with us im really into this car, but how do i know if im getting a good deal . I tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if im getting a great price. This is how car buying was always meant to be. This is truecar. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. Welcome back to street signs, the nbas longest serving commissioner david stern has died at the age of 77. He transformed the nba into a global brand he was able to multiply revenue over 30 times to a reported 5 billion after teams had been struggling to make profit after the former lawyers appointment in 1984. Raging wildfires have continued to cause mass scale evacuations. The military has intervened and are working to rescue thousands still trapped by the blazes. Reporter under blood red skies, a scene of never ending fire in one coastal town, 4,000 people have been allowed to return home. Across australia, at least 17 are known dead 1,000 homes destroyed. All of my possessions have been disintcorporated if we didnt get him down, he would be up there. This koala did not survive his burns. Zoo keepers are working around the clock to keep his 200 animals safe. By 11 00, it was black like midnight that horrible red sting to the sky, it was horrendous saying 30 of koalas may have died 8,500. It is basically habitat threatening. Soon, they may disappear from the wild we will eventually have no koalas in the wild you think that is a possibility . It is the beloved koalas are in extreme danger reporting for nbc news the german chancellor is vowing to do, quote, everything humanly possible to fight Climate Change in her new years address, she called on germans to make a change to their lifestyle. Last month, the upper house a roofed a higher levee on car solution but critics say it is still too low. The eu is stepping up to combat the effects of Climate Change including one cutting Greenhouse Gas emissions by 20 two getting 20 of the energy from renewables and 20 commitment three 20 goals there out of the eu in germany, the green party is the big party now. Theyve spelled out some of the pry orities over the next year and the next 20 or 30 years as well how tangible is there any detail to which we can hold on to 2019 was a memorable year in terms of social mobilization we saw. Some of the most aggressive targets and conceived a the the National Level and federal level. There is clear evidence that the approach to Climate Change needs to intensify, the eu is notable . That the blueprint theyve laid out in support of the longer term Mission Position by 2050 which is a real step change. That will be the new code of the type of investments will be sustainable and supportive practice they have come farther at the same time, quite notable for what it includes and it excluded at this face. What are they excludeing. Sustainability means so many Different Things in the context, theyve been explicit about the lack of credentials in solid fuels and coal notable that investments in nuclear and natural gas were more of a investment really reinforcing what the European Union is trying to do but reflecting the fact that they have opportunities to reduce intensity compared to coal notable that oil was not in that initial notification leaving companies with a measure of relief sensitive topic this is being pushed forward but we are hearing Central Banks get more as well warning that they were the degree warning of something around 3. 7 to 3. 8 degrees sell sell yus if nothing was done what role do you think Central Banks would be playing in these moves. The first thing we see a huge amount of corporate engagement and looking at the frameworks. The politics may be below some levels in some markets that say the activist community would seek there has been a really big push on the part of Share Holders we see a great deal of engagement to drive things down. That is a part of the reflection the reality has directed we have a new language to discuss the risks. Weve seen Companies Really take on board in their strategies and disclo disclosures. I suggest the role of Central Banks and authorities continue to be quite a problem. Of course, it all needs to be stream lined when i discuss it off air even with my friends saying well europe can do what it wants at the end of the day, they are still china and india. I think thats fair certainly china emits twice as much as the next economy it will be absolutely critical towards shaping the path way we in part as consumers that import goods have a role to play a lot of those emissions are in export that help support lifestyle in united kingdom. To realize a levelled Playing Field would be built upon. We are really encouraged and going into 2020, one of the regulatory sign posts is the plan of 2021 through 2025. Market reforms, some mandates and the largest carbon market. The chinese emissions could peek soon something to keep a close eye on we are running out of time thank you very much. The director of energy wise perspectives that is it for our first show of the year and the decade. Worldwide exchange is coming up next. Stay with the channel. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. Happen 2020. It is 5 00 a. M. And here is your five at 5 00. On the run, new details around ousted nissan chairman Carlos Ghosns escape to lebanon. Save the date for phase one deal how much streaming compar