Transcripts For CNBC Street Signs 20240712

Best month on record in may, but brent and wti move lower in early trade. Amid talk, opec and allies will bring forward to the meeting this thursday. The uk government defending its decision to ease lockdown restrictions as more shops and primary schools reopen today, while the track and Trace Program is due to begin. A very warm welcome to street signs, everybody. Lets get into the top story of the morning. Protests around the u. S. Over the death of george floyd continue as increasingly volatile tensions between demonstrators and police leave many state capitals engulfed in violence. The issue has sparked a Global Movement as residents in london and berlin took to the streets in a show of solidarity. Well go live to minneapolis with our nbc news colleague jay gray to see the scenes on the ground later in this show. So, do stay tuned for that in the meantime, let me bring you fresh data coming out of europe this morning we have final may manufacturing pmis this is for the eurozone as a whole. Weve had the individual metrics come through now for the region overall the number has come in at 39. 4, just a touch below the flash estimate of 39. 5. Similar to what we saw the manufacturing output 35. 6, marginally better than the flash numbers and overall worth mentioning, this is a bounce off what we saw in april but slightly worse than the flash metrics had indicated. But now investors, analysts are thinking the worst may be over for eurozone factories we also got fresh data out of china overnight. Chinese factory activity unexpectedly returned to growth in may as an easing of Strict Lockdown measures eased demand. Manufacturing pmi rose to 50. 7 and up from 49. 4 in april. Sam joins us with more on this data sam, so at the headline level, this looks fairly encouraging in terms of the chinese recovery given were back in expansion territory but when you peel back the layers, is this as encouraging as it might seem as first glance good morning to you, julianna at first glance, this reading is the highest level weave seen since january. Theyre saying the expansion is really down to an increase in production as companies go back to work, but also factories come back online after a sluggish few months perhaps dealing with some back orders there the National Bureau of statistics have said that over 80 of factories have actually reached more than 80 of normal production prior to the coronavirus outbreak actually, the official manufacturing pmi came in at 50. 6 in may. Slightly slower than in april, which was 50. 8, but as you say, we really do need to look beyond the headline numbers that is because the survey cautions demand remains weak, particularly when it comes to export orders. The official data actually showed us export orders contracted for the fifth month in a row in may coming in at 35. 3 so, far below that 50 mark that really indicates to us the difficulties china is having in getting things back to usual, particularly as the pandemic takes a hefty toll on global demapped weve seen chinese manufacturers struggle to get the overseas orders, which have been either reduced or completely canceled away from factory activity, though, were seeing encouraging signs which shows us theres a bit of an uneven recovery in the worlds second biggest economy so the official data around the no nonmanufacturing sector in may showed Us Consumer Confidence may be coming back the Service Sector, which is a big generator of jobs, that expanded in may. Officials are saying thats because of the consumer policy measures that have been introduced to spur consumption but also because of the may holiday we saw at the beginning of the month, which took place just after chinese officials had sort of loosened restrictions on Domestic Travel and quarantine so, after that, economists are seeing or expecting to see, perhaps, Migrant Workers who would go back to work in factories, perhaps looking for other work in logistics and things like catering as we are seeing that uptick in the Service Sector now, the Construction Industry also picked up in may and economists are expecting to see more of a dependence on the domestic marking moving forward in the short term as clooerly Global Demand remains sluggish back to you. Thank you so much for breaking it down for us and bringing us that granularity lets bring in Mike Gallagher from continuum economics jeff will join the conversation. Thank you for being with us. I always fine these pmi days interesting because they remind us how connected the Global Economy is we were just discussing the chinese pmi that came through overnight. It seems to be painting a stark picture of the consumer domestic side of the chinese economy and then the exportdriven side and what the data has shown us is new export orders continue to be weighed down because of the restrictions in place in its trading partners in europe and the United States. But pair that with what we heard from the chinese premier last week, all of the attention on the jobs market, increasing income to spur consumption the consumer side of things in china steams be Getting Better whats your take on how the chinese recovery is going . Its very much a twospeed recovery, as youre emphasizing. The production bounce back was sort of vigorous and were almost getting back to normal now. The issue is obviously the global recession, which is causing sort of headwinds for chinese exporters. If you look at the consumer, which is potentially much more interesting, there youve got different behavior if you look at car sales in china, they rebounded very vigorously but if you actually look at things that involve social interaction, restaurants and other activities, then the trend has been more cautious which reflects, i think, residual anxiety about covid rather than an ability to spend in the chinese case i think we will see further policy stimulus as has been quite widely signaled last week. Thats the kind of picture youre painting, the different sides to the Chinese Consumer recovery seems to me it bodes well for European Companies what do you make of european markets at the moment, what theyre pricing in and whether you think that this is a good time for investors to be looking at european markets. So, i think theres some positive news in terms of euro and im referring to Continental Europe rather than the uk. If you look at the trajectory of covid in all of the major xhiz, then weve quite clearly seen a significant downtrend. Theres unlikely to be a major second outbreak in the summer compared to some other countries where we are concerned and i think that actually is positive for the european story. It will see confidence rebuild and i think also you do have policy action coming through youve got the ecb bond buying, and theyre going to use 120 billion out of 750 billion but we think theyll top that up with 250 billion and do another 250 billion in december. Youve gottened progress and i think in the june 19th eu summit, well see an in principle agreement to push toward with the plan for 750 billion stimulus package, 2021 to 2024. That all helps european equities have lagged somewhat, but i think the sweet spot is more german equities, which can benefit not only from the asian recovery but also the european recovery, whereas italy and spain will still have a transition because tourism is such an important part of their economies. Those inevitably will lag. Mike, i just wanted to pick up on the other risks that youve painted rosy as liquidity. To revert back to where julianna came in, which is the u. S. chinese relationship, it seems to be emboldened by the fact that trump didnt talk about another trade war with china but theres plenty there suggesting this decoupling with china and the chinese economy is set to continue. It markets continue to ignore that i dont think they can ignore it, jeff i think they do need to pay close attention to it because i think inevitably at some stage well see some u. S. Action but i think the takeaway from friday was that the action is not imminent from the u. S. Side, so that caused a sigh of relief as far as hong kong is concerned. I think the u. S. Will take action at some stage but it will be stepwise. The wider u. S. china relationship, yes, theres a bit of an ongoing deterioration but ultimately trump wants to make sure he doesnt derail the phase one deal, because thats kind of important to him in helping the economy prior to the election. Theres only so far he will actually go. And its also worth remembering for trump personally, as distinct from the wider administration, china is just a deflection tool. Hes trying to deflect attention from the covid handling by attacking china, by attacking obama, by attacking the w. H. O. , by attacking twitter so, thats all part of a wider political strategy of deflection on the part of trump mike, just to focus on the actions of the fed here for a moment, we have seen the fed engage in purchasing in the highyield market, but so far theyve rejected the idea of going into the equity markets. But i think there are questions as to what will be available for the Federal Reserve to buy to legitimize any qe action do you think they may change their mind on equities at some point or will they continue to be a bit wary . I think they will be a bit wary if you look at the construction of the bond buying, theyve actually got some u. S. Treasury money that is there to actually act as a loss just in case theres problems they would need an even bigger pool in terms of equities. To be honest, jeff, i think the critical thing for the u. S. Government is actually Government Bond buying because thats helping to effectively fund the budget deficit this year theres a big problem next year in that the budget deficit in the u. S. Is going to be around 2. 5 trillion i think the big news over the summer will be the fed decision in terms of qe not for market functioning but to actually support the recovery we might get that in july. We might get that in september were certainly looking for hints on june 10th theres two options, either openended qe or qe with yield curve control. Qe with yield curve control, is what the japanese have done and would mean sustainably lower treasuries, even from here that would mean treasury yields down to around 0. 4, 0. 5 for tenyear yields. Thats kind of quite crucial we dont think theyll use that because theres problems with that policy. We think theyll, instead, look at continuing purchases around 80 billion a month through 2021. Mike, thank you so much for joining us this morning. Appreciate your time Mike Gallagher, continuum economics. Jeff, thank you as well. Chinese state media has hit back at u. S. Threats over beijings new laws in hong kong saying the move will, quote, not bring china down President Trump has vowed to curb hong kongs special customs and travel status and impose new sanctions on unnamed individuals. The tensions come as fresh antigovernment protests are expected to break out in the city in the coming weeks the number of confirmed coronavirus cases has topped 6 million globally, according to Johns Hopkins university over 370,000 people have died worldwide due to the virus with the u. S. As the worst effected brazil has seen a spike in recent weeks with over 500,000 cases. Coming up on street signs, the skies clear for lufthansas bailout plan as they agree a deal with the European Commission we have details after the break. Welcome back to street signs, everybody. Lets get you a look at european markets, how were opening up the new week, the new month here we have some green across the board. The spanish index is leading the way higher, up about 1. 3 . Ftse 100 up 60 basis points. Bear am nind mind, we have several markets closed, including germany. We have looking for gains for french and italian markets we saw the stoxx 600 gain 3 last week, marking the fourth positive week in a row that comes despite a pullback on friday there was a lot of nervousness heading into President Trumps News Conference about what kind of action he would take against beijing with regards to their action against hong kong or toward hong kong the fact that President Trump did not go so far as putting the phase one trade deal in jeopardy seems to be providing a relief to investors and investors here in europe shrugging off, so far anyway, the social unrest, the protests taking place across america in response to George Floyds death. Lets push on and take a look at airlines a couple in particular that are trading very strongly this morning. We have ryanair shares up 2. 4 , easyjet up 3. 4 . Niece airlines extending recent gains. We have news on lufthansa. The german airliner has agreed to more favorable terms with the European Commissioner over its 9 billion state bailout meaning it will only give up 24 runway slots to other airlines, far demanded offered by brussels the deal will be the biggest european bailout since the crisis began with the German Government set to take a 20 stake in the struggling airline. I mentioned these two, the german markets are closed today but were seeing a boost for airlines more generally. On top of this lufthansa news, investors continuing to price in the reopening of tourism across europe this summer as europeans get ready and hope they can move across the continent and take their Summer Holiday in some form that resembles what were used to. Lets take a look at the auto space french car registrations more than halved in may with psa falling 56 over the month registrations for renault fell more than 50 in may last week the french government unveiled its 8 billion euro rescue plan for the embattled car industry but still facing supply chain disruptions and thousands of job cuts. A lot of different factors to take into effect psa Group Trading off the highs of the day but still up 2. 7 the suppliers, earlier this more than michelin was trading in positive territory but we have given up those gains and that stock is down 0. 3 i want to take you to the health care sector. Santafi has stopped hydroxychloroquine and will no longer recommend the drug as a treatment, which comes as the World Health Organization halts its own trials after a study found patients trade with hydroxychloroquine had a higher mortality risk than those who didnt take it a spokesperson said the halt is temporary and decisions to resume are pending reassurances of safety. The news comes after a month about a month after u. S. President donald trump announced he was taking hydroxychloroquine daily to prevent contracting coronavirus. So, santafi shares are up 1. 2 . Pharma group kenra will deliver avifavir to german hospitals. They say its more than 80 effective treating 35ish9s with coronavirus. The ceo of the Russian Direct Investment Fund told cnbc that sovereign wealth funds may have to pitch in during the crisis. Weve shown sovereign wealth funds can be effective and being focused on fighting key challenges actual government is very supportive and we also see major effort by other sovereign wealth funds to invest in health care and invest in other efforts. Some sovereign funds will need to share their riches, but this is a good thing because it actually builds them up by Good Investments in previous years. Opec and allies are considering whether to move their next meeting forward to this thursday, june 4th. Algeria proposed the change saying it would help facilitate oil sales. Russia does not object to the new date, according to rueter sources. Saudi arabia is reportedly hoping to persuade moscow to extend the record round of output cuts until the end of 2020 i want to take you to brent to the endofmonth chart trading at 37. 58 a barrel were seeing Oil Prices Bounce off the historic lows last month. They were top performer, the oil price across different asset class during may wti posting its best month ever. Wti, if with he can show you the monthly chart of wti we have that Oil Indicator up more than 85 . Were trading at about 35 a barrel i want to bring steve in, who knows far more about opec and its allies than i do whats your take on this news that opec plus could bring forward its meeting date to this week and whats important to watch when we look at that meeting . Im not too worried with the meeting is on the 4th of june or the 10th or 11th its what comes out of that meeting and the signaling as important as what happens. Lets remind ourselves for the months of may and june, opec plus, including the russians, agreed to take 7 Million Barrels off the table per day. The question is whether some of that oil comes back on the market in july if they have done a good job rebalancing or keep rolling on with that very, very large output cut through july, the rest of summer or towards the end of the year as well. The signaling is as important as physically what happens in terms of the barrels that return youve got to remember, and im pained to say this yet again, there are three parts to this equation the opec supplier, the supplier on the market, which they dont control, such as u. S. Shale, and the demand side. All three are important to get this fabled rebalancing in the market very clearly with the wti close we saw on the previous months expiry, you get this wrong and you could see violence to the downside opec and their allies are aware of that. They have a degree of stability, at least 20 below where they would like to see the price. Quite frankly, they would like to see 60 plus, and even then many individual treasuries do not balance the books for these countries as well. If they can get stability first through some form of rebalancing and then get a price rise later in the year, thats the ultimate aim. Lets not forget the fact is, they originally flooded the market with oil and certainly the saudis did in order to, perhaps, dominate the market and perhaps beat u. S. Shale to the customers as well. Theyre very much of mind that they want to finish the job and not give u. S. S shale an out at this moment, julianna. Steve, thank you so much for setting the scene for us well be back out to you shortly. Well give viewers a look at the latest factory activity in the uk as the country moves to reopen its country after coronavirus lockdown well see where steve is today just after this break. Tempurpedics mission is to give you truly transformative sleep. So, no more tossing and turning. Because only tempurpedic adapts and responds to your body. So you get deep, uninterrupted sleep. During the tempurpedic summer of sleep, all tempurpedic mattresses are on sale welcome back to street signs. Im Julianna Tatelbaum and these are yo you are headlines protests rock cities across america. Hundreds are arrested. Curfews are imposed and the National Guard is called in as rallies turn violent in multiple capitals. European equities shrug off unrest in america and regeopolitical concerns following the hang seng higher on relief that President Trump has not reignited the trade war with china. U. S. Crude prices turn their best month on record in may, but brent and wti move lower in early trade. Amid talk opec and allies will bring forward their meeting to this thursday. Light at the end of the tunnel the latest European Manufacturing data signals the worst may be over but that recovery will be slow. Lets get you a check on european markets we did see a bit of a pullback at the end of last week. On friday there were concerns circulating around the market on what we may hear with President Trump in regards to his action in beijing surrounding their move towards hong kong the fact that President Trump stopped short of reigniting the trade war with china seems to have caused seems to have spurred a little bit of a relief rally in the stocks. Were looking at green across the board for european markets we have come off the highs of the day. Its worth noting at one point the ibex 35, the spanish benchmark, was trading north of 2 we pulled back a little from the highs but still in positive territory. Weve had flash pmis coming through not flash, final pmis coming through all morning for the European Countries we have the uk number now coming out. And the may final manufacturing pmi for theunited kingdom has come in at 40. 7. Thats jump a touch ahead of flash estimates of 40. 6. The overall theme for both the uk and the eurozone is that may, we are continuing to see sharp declines but we have bounced off the lows seen in april. Less severe fall than seen last month causing many investors to take the view that the worst is behind us. Of course, the question still remains whether a second wave is a major risk, that we should be thinking about longer term for now the data suggests we have seen the nearterm lows lets get out to steve now, who joins us with more steve, here in the uk, a lot of changes kicking in today i would love for you to run us through them, but run us through the balancing act the uk government is now trying to maintain between reopening the economy and also doing it in a way where the experts feel comfortable that a second wave isnt right around the corner. Absolutely. As our next guest knows, i know hes listening in as well, the fact of the matter is, not all scientists will agree about the path out of lockdown and the ramifications not only, of course, for the covid19 pandemic and for all realnesses as well. Well come to that feeding off the back of the pmis, banging along the expectations, way above the alltime low in the previous month as well. Yes, today is marking of course not only the 1st of june but another easing of the lockdown, outdoor market, car show rooms, certain parts of Economic Activity that have been shut up to today, allowed to open. Including the primary schools. My own daughter has gone back with huge social distancing and restrictions and safety going into the magnificent effort the schools are doing to reopen as well and, indeed, some sport as well, including the first horse racing fixture up in new castle taking place today. There is activity, albeit under strenuous activity this is a queue that wouldnt have happened over the last six, seven, eight weeks its a queue outside ikea. You have a couple hundred people queueing ikea today opening up their stores, 19 Stores Across the uk, 5 in and around london another bit of resumption. Ikea has social distancing, they have sanitizers throughout a lot of people in the queue are wearing masks. They will have Cashless Payments as well. Theyre asking people to bring their own bags and be sensible the british is good about quooeing there are question marks whether the government is moving too fast theres the sage committee, the official Government Scientific Advisory Group and others as well as the independent s. A. G. E. Group found by david king, former chief economic adviser. Ive laid out a few viewpoints and facts, but in your view, i understand you think the government may be moving too quickly out of lockdown. Absolutely. Im very worried about the possibility of a second wave and the risk becomes greater with the opening up of the lockdown too early. We know that we have 8,000 new infections in the uk every day and when we went into lockdown, it wasnt very different from that so a peak much, much higher than that that. At the peak we had 1,500 deaths a day. Were down to 200 deaths a day nonetheless, the deaths follow the infection rate, and theres always a twoweek delay between the two. And i fear we can anticipate with the uplifting of the lockdown, that this could get worse. What i believe must happen as a condition of opening up the lockdown is the test, trace and isolate capability is brought up to scratch and tested for at least a week or two before we actually open up schools and so on the second is that we need to see local communities are fully engaged in the whole process remember, schools are a major part of the local community, but so are gps, so are the the whole structure of local authorities has essentially been left out of the considerations of the government until very recently if we continue with 8,000 infections a day and continue to lift the lockdown, then i fear the risk of a second wave becomes very real. Let me just say, the quicker with we get out of this epidemic, the sooner we can get back to normal activity. But if we show impatience, just as were getting it under control, and i think the government is showing impatience, the risk of a second wave becomes greater that means it takes longer david, theres been a lot of different scientific opinion, fair to say, across the spectrum one end of the spectrum is the swedish experiment of trying to get some form of herd immunity i know the infection rates and mortality rates are greater than other scandinavian countries but is there a case to be made that actually the creation of some form of herd immunity, as weve seen in sweden, should be extrapolated to other countries, and actually britain needs to get more people with a degree of antibodies, a degree of immunity perhaps as long as we protect the most vulnerable areas of community, that should be potentially a way forward . That is not a way forward i think if we go for herd immunity, the number of deaths in the population is going to be very large, indeed you say protect the vulnerable community. The process of protecting those who are vulnerable is not very clear. We know that, for example, doctors and nurses have died in premature way through dealing with patients with covid19. And these are people perfectly healthy, not showing the symptoms the problems that might be deemed to be at risk so, i think the issue of herd immunity is something we heard about a long time ago. Thank goodness were not hearing about it anymore i think what we will see in sweden is a continuing rise of the number of cases until they have Something Like 40 of their population becoming immune but, frankly, do we know how long that immunity will last there are signs the immunity may not last a very long time. However, its one way of getting out of the epidemic, if you want to go down that route, but, please, remember the number of deaths in the community will go up dramatically. We already in britain have the highest rate of deaths per head of population in the world and so as we move forward in time, we have to ask, why was that its because we went into the lockdown far too late. Even a week earlier and the number of fatalities have been reduced. Two weeks earlier, so on so, every time theres an epidemic of this kind, we know you have to get ahead of it. This isnt a scientific issue to be discussed you have to get ahead of it. You have to put in the process as quickly as possible to get the virus out of the public. Sir david, lets stick with what we have right now, and in your view this the measures being taken now to ease the lockdown could lead to a second wave if we do see a second wave hit the united kingdom, what do you think about introducing partial lockdowns in the future to address the second wave, adjusting for age and risk, is that an effective approach to dealing with a second wave i dont think a partial lockdown is really the answer. It is correct that communities in britain, the possibility of a second wave is much greater than other parts of the country if i just pick up this issue of immunity, the estimate is that roughly 17 of people in london may be immune at the moment, but the whole country its about 5 . Thats a very small number so, what we may see is that the outbreak occurring in other parts of the country will be greater. Let me just give you as an example of really i apologize. Let me just give as an example the flux of people weve seen over the weekend going to the beach. Now, outdoors, two meters apart, thats not a problem but how do they get to the beach . In coaches, in trains. The coaches and trains were full this weekend Going Forwards the beaches, and buses as well that is where the virus sits one person with the virus in coach puts the whole coach full of people at risk. I think we have to be extremely careful. I wouldnt lift the lockdown since weve had nine weeks of Good Behavior from the public, in lifting the lockdown in any way, people are taking their eyes off the importance of carrying on just a few more weeks so that we can get this thing under control. Sir david, lastly, you mentioned the importance of the track and trace system here in the uk now lots of talk about the reopening of european borders to facilitate tourism throughout the summer lots of different track and trace type measures being implemented across the different countries. Do you think this is actually a useful tool given incompatibility of these systems across europe. I think this is a useful tool if i take greece, the country that has really behaved properly throughout this outbreak greece is now virtually out of the epidemic they have a total death rate of in greece, total death rate in greece of 150 deaths thats how many were having per day here thats because they acted very, very quickly they shut down their borders except people coming in. They were put into hotels in athens for two weeks before they were allowed to go out into the country. The greeks have set an example to the rest of the European Countries. They say theyre going to open up their borders to incoming travelers, but they will, of course, be tested at the border. If you are found to be with the virus, you will be quarantined thats the risk you face if you go back to greece. I think that the business of allowing travel is a key to many, many of the economies of europe we do want to see economies recover as quickly as possible but we must do it very cautiously sir david, thank you for sharing your thoughts with us this morning really appreciate your time. Sir dade king, former chief scientific adviser. Coming up on the show, protests break out across the United States as americans express their outrage at the death of an unarmed black man in minneapolis. We have more after the break [ ] think you need to buy expensive skincare products to see dramatic results . Try olay skin care. Just one jar of microsculpting cream has the hydrating power of 5 jars of a prestige cream, which helps plump skin cells and visibly smooth wrinkles. While new olay retinol24. Provides visibly smoother, brighter skin. For dramatic skincare results, try olay. And now receive 25 off your purchase at olay. Com brand power. Helping you buy better. Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Welcome back to street signs. Protests erupted overnight across the United States again over the death of george floyd the 48yearold was killed while being arrested in minneapolis on memorial day his death sparked rallies and unrest in at least a dozen american cities, including here in north carolina, where Police Used Tear Gas to disperse crowds the images youre seeing in front of you some peaceful rallyings turned violent over the weekend leading to the arrest of several hundred people at least 40 cities have imposed curfews to help stem the violence the National Guard was also mobilized in several states in efforts to keep the peace. As protesters clashed with Law Enforcement. We have seen some reaction in the corporate side of things as well. Let me take you to a few companies in focus apple left many of its Stores Closed on sunday due to the ongoing unrest, citing the health and safety of its workers. Tim cook addressed the death of george floyd in a companywide memo saying there was deeply rooted discrimination within the criminal Justice System and called for the creation of a better, more just world for everyone amazon shut several of its whole food Stores Across the country over the weekend as it complied with curfews in several major u. S. Cities. The ecommerce giant also adjusted the closing time in multiple locations in a bid to ensure employees could get home safely target announced it is temporarily closing 175 of its stores due to the ongoing protests it comes after the minneapolisbased company said several of its outlets had been targeted by demonstrators. President trump was taken into a secure bunker on friday night as demonstrators gathered outside the white house. The u. S. Leader stayed mostly silent over the weekend but blamed an Extremist Group for the violence, declaring the antifascist group, antifa. Radical groups, criminals, thugs and others all throughout our country and throughout the world will not be allowed to set communities ablaze we wont let it happen it harms those who have the least. And we will be protecting those who have the least the leadership of the National Guard and the department of justice are now in close communication with state and city officials in minnesota, and were coordinating our efforts with local Law Enforcement all across our nation. In America Justice is never achieved at the hands of an angry mob. I will not allow angry mobs to dominate wont happen our nbc colleague jay gray joins us now live from minneapolis. Thank you so much, jay, for being with us so early run us through, what is happening now in minneapolis where all of this kicked off also, if you can connectictextue this significant moment. Reporter its been amazing to see all of this unfold. It did start here, obviously, with the death of george floyd look, large pockets of this entire city are either boarded up right now or, as you can see behind us, burned out, including this neighborhood where floyd died exactly a week ago today. Overnight for the first time here it seemed there was a sense of calm while across the country there continues to be outrage that seems to be intensifying. We saw fires just a block or so away from the white house last night, fires in cities like new york and boston, los angeles had heavy looting and protests there. There does seem to be just this growing frustration that is turning in many areas to fury. Weve got curfews enacted in several cities, as you talked about, julianna. Weve got a lot of people, tens of thousands, millions, if you go from new york to los angeles, that are really on edge right now with everything thats unfolding after floyds death. Jay, i just want to ask you, we cant look at this in a vacuum these protests are obviously going on against the back drop of this looming coronavirus threat what are you hearing, whats your understanding of the analysis around the potential for resurgence in coronavirus cases given all these, you know, protesters getting together in such big groups . Reporter its a very big concern, especially here in minnesota where theyve seen a spike in the virus now youve got thousands gathering, many without face masks while close together thats a big concern again, its a concern in several cities with the protests growing. We really appreciate you being with us this morning thank you so much for your coverage pushing on Chinas Foreign Ministry has accused the u. S. Of being addicted to quitting after President Trump pulled america out of the World Health Organization the u. S. Leader also banned certain chinese nationals from entering the country in retaliation for the imposition of new security laws in hong kong the Foreign Ministry spokesperson said beijing would have firm countermeasures but pleaded with washington to stop going on the wrong path. President trump stepped back from seeking changes to the u. S. china trade deal on friday. Instead, announcing steps to revoke hong kongs special trade status with america. Investors had been fearful of a resumption in trade hostilities ahead of the president s announcement with chip makers and phone manufacturers particularly concern our next guest believes trumps strategy will pay off for Semiconductor Manufacturers in the short term, but remains cautious on longerterm issues that is dan ives, managing director, equity research. Thank you for being with us. You like all of us were watching President Trumps News Conference on friday whether he would put the phase one trade deal into question he steered away from doing that. So, how confident are you no you or how do you feel about the tech and Semiconductor Stocks given he seems to be all rhetoric at this stage look, i mean, this is really what i view as a green light to continue to buy semis as well as apple. This is really the fear, that there was going to be a wrench thrown in the supply chain with a phase one issue, really what i view as the overhang with that sort of more bark than bite, i view it right now that stock, in terms of semis and apple, i think you can continue to see these stocks up another 10 , 15 Going Forward this was the biggest fear of tech investors going into fridays speech. Its interesting when you talk about the biggest fear for tech investors, because last week it felt for a couple of days anyway that more regulation could be one of the big fears as we look toward the rest of the year given the battle that unfolded between twitter and President Trump. Obviously, the headlines over the weekend are around the protests seem to have overshadowed or dominated that story for now. But whats your take on how that development that story is likely to develop and the fact that facebook has come out effectively taking the opposite approach when it comes to President Trump and his communication . Yeah, you know, the dorsey versus trump battle, the biggest fear is around the regulation battle thats brewing going into the late summer fall we look at facebook, google, amazon as well thats why i think it was important that zuckerberg and facebook took the opposite stand because for an investor perspective its all about regulation its a slippery slope. Thats what we saw withtwitter it starts here but where does it lead to . Does that put gasoline in the engines of some in the beltway going after big tech, which is the broader worry as we go into the fall, especially a president ial election. In terms of the scale of that risk, when we talk about more regulation, is this potentially going to be an entire Business Model risk for some of these tech players our view is likely its funds but, no doubt, youre seeing a drum roll from the doj sister a state a. G. Perspective, but also in terms of the senate as were starting to see more and more hearings. Bezos will lookikely will be th in the fall. One thing i would point out, youll see big tech really halt any major m a. I think youll see a lot more scrutiny with that youre seeing that with facebook, google, fitbit thats the big issue, big tech, the main way theyll continue to add to their Product Portfolio is acquisitionings a bigger spotlight on that given the antitrust worries, especially going in the next 6 to 12 months. Interesting m a is potentially going to suffer as a result of this i want your view on tech more broadly. Earlier in the show we were recapping the monthly move across markets the month of may, tech was the key outperformer looking at u. S. Markets. Theyve driven the overall bounce from the lows of march. Now that investors are showing a little more appetite for the value, more cyclical parts of the market, whats the risk that some of that trade unwinds i mean, theres some fears out there. I continue to think when i look at f. A. N. G. Names up another 20 , 25 for the rest of the year i think tech continues to lead this market forward because theres a lack of secular growth names. When you look at areas like cloud, cyber security, the work from home names, youll see stocks move higher as well as the Risk Appetite increasing even on the economic rebound names going into the second half thats why i think youll see more of a small cap, midcap rally in tech to follow some large cap brethren always a 34rur to have you on thank you for joining us early dan ives, equity research, wedbush joining us from wall street. Were looking at red on the board there, but no major moves. This follows a second strong month for wall street. The rally continued in may led by tech as we heard there. Now investors digesting the fact that President Trump held back on friday, didnt go ahead and put the phase one trade deal on the table. Fresh headlines coming out around china thats certainly a risk investors will continue to watch as well as the protests continuing across america. Thats it for todays show im Julianna Tatelbaum Worldwide Exchange is up next. Breaking news. Another crisis in america. Protests rock cities from los angeles to philadelphia, new york city and minneapolis. The unrest coming just as much of the country begins to reopen. There are fears the protests could spark a new wave of cases, fatalities and lockdowns many cities enacting curfews on its citizens as investors continue to focus on the escalating tension between the United States and china over hong kong. Americas Unemployment Rate nearly a 15 will all