The brewing giant refuses to offer guidance for next year the pace of recovery, as you point out is uncertain and is very local infin yan shares jump as they point to a recovery in the chip maker. The outlook is improving within automotive, we have seen recovery. Also korea we expect that the worst is behind us. The threeway deal, President Trump says the u. S. Treasury should be paid a substantial amount of money for facilitating the part of the bid of the chinese app tiktok i think maybe a deal is going to be made it is a great asset but not in the United States unless they have the approval of the United States a very warm welcome to street signs. Lets get right to the Market Action trading has been under way about 60 minutes and has been a very turbulent hour currently about 25 basis points below the flat line. We have crossed into and out of positive territory the results front, some companies actually offering a fairly optimistic recovery on the outlook. Getting investors confident enough to hold on to the err will i gains we saw. This does mask some divergence we are seeing a strong bid for unvalued parts of the market oil and gas been one of the key sectors and investors taking money out of the Growth Market that has benefitted as of late lets get right to one of the key focuses. That is bp the company had its dividend for the first time in years after a reported loss of 6. 7 billion. The company wrote down oil and gas assets worth around 6. 5 billion he attempts to refocus the oil giant towards Renewable Energy bp shares trading higher towards the top of the stoxx 600 this morning. Lets look at the majors weve got green across the board with shell about 2. 5 . One of the best performers up. Total up about 2. 5 . Lets get to nick to talk about these numbers that have come through today. We have bp slashing its dividend for the first time yet shares move higher. Does this make sense to you . I think the dividend cut was very much expected and frankly inevitable we have shell dramatically cut its dividend in the previous quarter. No great surprise there. Clearly, it was a really tough quarter for bp, maybe due to low oil prices their oil prices have been lower than shell it is interesting you use the word inevitable. Theyve come out this morning saying the company will invest 40 to 50 of total Energy Solution by 2030 was this inevitable as well . Looney, remember, only took up his post in february. Before going into this great storm. I think hes showing real determination. His predecessor was associated with fixing the Oil Spill Disaster hes trying to put his stamp on the company. Hed probably like us to focus on the long term there are going to be real significant difficulties in the short term where the oil market is not out of the woods in the current quarter. You talk about the near term difficulties the oil market, he has less control over what happens from a macro point of view. What are some of the other key challenges that are going to take place between now and 2030 when he expects it to be further down the line in terms of their place in the Energy Transition he said this morning, he told journalists that trillions of dollars will be spent replumbing and rewiring the earths system. If bp wants to be part of that i think investors need to have caution with the spending on the White Elephant and others saying what is the key i skill set clearly setting bp and climbing a 40 cut on oil and Gas Production by the end of this decade what weve seen across the sector is some companies acting and making acquisitions. Chevron announcing the acquisition. Bp engineering up from a year ago. Is that going to con trastrain . Yes, so bp has the highest debt gearing among the peers those big ticket acquisitions he did repeat that he does have a target that will instill some caution and restrains where they are a bit more cautious about this energy strategy. Do you believe looney will do that and set out for their gearing . That sets the asset sales that makes sense if you look at the portfolio where it is too pricey and where you can cut your emissions as well north america will remain a very strong part of bps portfolio. There is a lot of opportunity there to really bring the emissions down and do the oil and Gas Production do some biofuels and other forms of energy and another big emphasis on reducing emissions there. If you look at bp strategy, they had been trying to diversify in other markets like europe how is the pandemic affecting that strategy . I think it will speed it up europe, certainly in the downstream, refined Product Services it depends on being able to export products. Bp is on the path to expand in india where they see a brother market they want to get closer to consumers but are trying to combine fuel sales with other energy transmission. From the sound of it, they are saying the energy provision. A lot of different bets on renewables and gradually increasing the investment. Before we let you go, love to get your take on the broader oil market we caught up with the shell ceo last week. He offered a pretty constructive tone around opec plus suggesting that he thinks theyll going to be disciplined what is your take . Is it likely we can continue discipline and compliance from opec around the supply agreements theyve made thus far . There are a number of countries that didnt really comply fully with the Opec Plus Group and had promised to do so. Coincidentally, a number of them are countries where we have bp production thats actually why we see bp say we are going to be lower this quarter than last when the opec cuts were supposed to be steeper. Angola and iraq are good examples of that theyve got some catching up to do whether they are going to fulfill their commitments, theres a lot of politics and behind the scenes negotiation but some of the big players like saudi arabia are putting a lot of pressure on these countries it will be a compromise. Iraq has always said oil is the life blood for its economy hard to see that it will fulfill its commitment hard to see a lot of pressure on them Companies Like bp will temporarily be part of that. Nick, thank you for sharing your expertise and alabanalysis. Lets push on. Natixis shares up after the Company Posted a 57 million euro Second Quarter loss as it was hit by weak performance in the trading unit they have also replaced the executive citing strategic differences over the future. Easy jet expands summer schedule and now intends to fly 40 of its capacity up from 30 . Investors do like that news. Shares are up more than 9 but this comes after a tumultuous run dsm with a Second Quarter forecast despite an 8 fall as the pandemic weighed on the materials business also issuing a costout look for the rest of the year citing visibility catching up with the ceo to express concerns around a second wave the materials side where we serve markets like automotive, building here, i have to say the second wave is a concern given the spikes we are seeing in various geographies. We are operating around the world and are very conscious about the fact that particularly in the americas, yes, there is a second wave but still the first wave which is ongoing. Lack of visibility the guidance and we are taking all the measures we can to make ourselves competitive. Diageo saw demand slide in most key markets but the company backed its dividend target d disspite saying recovery was uncertain. The consumer demand will come back we are confident about that. The pace of recovery as you point out is uncertain it is very local it depends on which part of the world. However banqueting, for example, these are large groups getting together, that will take a little more time shares getting hit hard this morning. You can follow us on twitter at street signs cnbc you can tweet me directly cnbc julianna lets look at the futures, we have turned negative. All pointing to a weaker start we had seen patches of green earlier but investors struggling to hold on to those early gains as investors keep an e oyen washington lets see if we can get an eye on further stimulus. Hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. Welcome back to street signs. Bayer has posted a 9. 5 billion net loss after settling 95,000 roundup weed killer cases bayer shares lower by about 3. 3 Commerce Bank has appointed a new chairman reaboving concerns. The private equity group told the board in a letter it had serio serio serious doubts seeing the bank lose over 50 of the value in the last two years. Shares trading higher by about 4. 4 lets look at broader european markets. We have a mixed session under way. It has been a bit of a roller coaster. We have divergence regionally. Weve got the italian and french markets trading higher investors digesting these earnings deciding where to put their money and whether it is time to put money back to work in some of the most unloved value parts of the market of those in favor. On that note, lets look at autos. Trading very firmly this morning. The best sector. Psa up, renault up 3. 7 . A lot coming through investors taking a look at the trade and saying some of these value parts have been oversold in recent weeks. Looking at the banking sector. We saw Commerce Bank, up 1. 5 uni credit up. Deutsche bank shares also trading higher across the board, we have some strong gains worth mentioning that banks would underperform Goldman Sachs says markets could be stuck with below average returns and above average volatility the head of Asset Allocation joins us now christian, what do you mean by that term you used explain what that means in terms of your view and asset strategy . We often get asked that i think the idea is that the last decade is pretty extra in terms of equities. It is not just a strong bull market on its own. It has been a really strong period and below average volatility that means returns are going to be flatter and fatter in terms of the volatility. The key driver behind that is that valuations have expanded so much further it has been a story of the cycle and this recovery as well because the key driver of markets in the last two months but also since march have been declines in bond yields and more recently, declines in real yields that means lower returns and very high uncertainty on the Growth Outlook both in near term and long termand increasing uncertainty on inflation all in all, that makes us in the medium term less excited about the risk return. Fat and flat markets. Not all stocks within equities have seen the same kind of appreciation and valuation move higher weve actually seen growth benefit much more with a little reversal of the trade are there opportunities to still make use and get a return here . As i mentioned earlier, the key driver has not been optimism on wealth and inflation you had break even inflation given a pretty high probability in the near term and over 10year horizon. Those have gotten repriced together, we pushup new rates. Growth stocks have a lot in the future you discount it less anything that has a stable and reliable growth cash flow has benefitted we have seen signs that growth is under way clearly the Earnings Seasons are a bit more mixed we also see the leading data because the earnings are ba backlogged there is a window for the market to get a bit more positive on the assets. We really need to watch those. One other thing that sticks out is the diversification becomes more affective that is true now more than in the last decade. In the last 30 years, you had one of the best diversifiers which also had a positive return which was the bond market there is a real risk if you have a sharp decline in growth and the return of the deflation fears are up with the rear rates where weve seen the market has come down. If we pushup the rates, that is the benchmark return that will weigh on gold and equities that is one of the key risks you are facing that you have a bare market and that is a new feature. A challenge which most investors have to face either to accept higher risk or find alternative ways to deal with it another element is where we see the dollar going how does that happen in your view how do we go from here to 20 lower. What is the time frame and the catalyst for that . There are a lot of drivers. Certainly, there is a valuation where investors and the bond market was the best market so it attracted a lot of Capital Growth and might ease a lot of differences on yields an growth because you have the federal narrowing aggressively in front of the crisis. You might ask yourself questions about the growth differential and those that are currently meaningful in the returns. I think the reason why the team is quite bullish on that basis not just that the u. S. Is underperforming in regards to growth and fighting the political wave the rest of the world where they are quite bullish is doing very well so that growth is outperforming in the u. S that creates the u. S. Capital growth and across assets, u. S. Offers more value right now with regard to credit and high yield has a much less high default rate we have more value and those places to some extent as a whole. In some places we see value and that makes more bearish for the dollar we see it there offering more value. Head of Asset Allocation coming up on the show, show me the money praup looks to secure part of the tiktok sale price for the u. S. Economy more when we come back the covid19 pandemic is creating Food Insecurity on a scale not seen in decades. An estimated 54 million americans will struggle with hunger. With 200 food banks and 60,000 meal programs, feeding america is the largest hungerrelief organization in the country. Join Morgan Stanley in supporting feeding america and your local Community Food bank. Welcome back to street signs. Im Julianna Tatelbaum these are your headlines bp slashes its dividend for the first time in 10 years but keeps the cut in line with expectations with a record 6. 7 billion loss. No cheer for diageo with a drop of revenues in south africa sticks with dividend but declines to offer guidance for next year. The consumer demand will come back the pace of recovery is uncertain and very local infin yan shares jump as they point to a recovery in the auto sector posting a Third Quarter operating loss telling cnbc the outlook is improving. Within automotive, we have seen certain recovery. China getting a back flow is alsokorea. I think a deal will be made it is a great asset unless they have the approval of the United States european markets have been open about an hour now the ftse 100 and the dax right below that line. In italy, the ftse mib trading about. 8 higher a lot of Companies Offering fairly upbeat offerings around the rates. The months of june and july have been slightly more encouraging we are also seeing the trend come through with the most unloved value catching a bid as investors shift towards the sector lets look at the breakdown. We have an equal board here. Oil and gas, auto and banks are firmly in the lead here this morning. Its frar to say those are the most unloved parts of the market oil and gas. Bp there at the top of the stoxx 600 after that company cut its dividend and said they are going to accelerate. On the down side, we have the more defensive part of the market underperforming food and bef and others down more than 1 lets look at the u. S. Futures is we were looking at a bit more green with a fresh record high microsoft was a bit higher in trading. It looks like investors are pausing. Looking for a 40 rise the Software Group continues to see a solid demand additionally, looking to expand the augumented Reality Shares up by about 4. 5 . Infineon posts a 93 million loss but confirmed it is sticking to the full year guidance it has seen a slight recovery in auto and others. Annette, is it all about the guidance is that what has investors excited this morning actually, its all about the guidance because they are more profitable and they expect it to be more profitable in the final quarter of their fiscal year also, this quarter profitability was better than expected also the revenue came in higher than expected and the loss can be attributed to the board in the Second Quarter the general trend when it comes to the revenue line is better than expected is what i was saying. Essentially what the companies were saying when it is seeing the worst behind them. This is very important because they are making 40 of their revenue with the car industry supplying ships to that sector also, they are expecting an uptick in demand when it comes to the last fiscal quarter of 4 q. I put also exclusively with the ceo and ask them about how they manage to drive profitability in that very difficult environment. First of all, we had slightly better revenues but considering the bank situation, this is not very special from our point of view on the other side we extremely wellmanaged our cost situation on the opec side and the operations area. We were able to variablize the cost using shorttime work to help us improve on that margin. Also, they are seeing tentative signs of recovery which should be good for them going forward. Having said that, they are still cautiously optimistic about the outlook not giving any for 2021, the fiscal year which already starts in october. Given the uncertainty over the development of the coronavirus prices and what it means for the world economy. Julianna, back to you. Thank you for bringing that to us. Lets get to one of the big stories. That is around tiktok. President trump says the u. S. Treasury should be paid a substantial amount of money for facilitating a potential deal for microsoft to buy the chinese app tiktok arjun has more on this this is without precedent. The president suggesting the government deserves sort of a finders fee for a deal like this this is all part of a highly fast moving, unusual story starting with the fact that microsoft is only looking to buy a part of tiktok in certain markets of canada, new zealand, australia and u. S. President trump said that could be complicated he did give microsoft the go ahead to pursue that and said somehow, some way, the u. S. Treasury would need to take a cut of that deal lets listen in to the rational for that you buy it, that price goes in to whoever owns it because i guesses it china i said a very substantial portion of that price will have to come into the treasury of the United States because we are making it possible for that deal to happen. Right now, they dont have any rights unless we give it to them if we are going to give them rights, it has to come into this country. Of course, this is the year 2020 and anything can happen there are a number of questions and uncertainties surrounding this deal. President trump said an American Company would have to buy tiktok by september 15 or the app would be banned in the u. S for this deal to be successful, youll see how it will be able to buy part of that. Then how it does go ahead and split that and also who will run tiktok within the Microsoft Organization and what kind of price tag will tiktok come with as well a lot of questions there there has been reaction in china around the moves made by the u. S. And microsoft the editor and chief of the statebacked global times saying that the u. S. Is a rouge country saying this amounts to open robbery. The china daily also accused of the u. S. Of carrying out a theft of the Chinese Company and a smash and grab they did mention that china has many ways to respond to this they are threatening retaliation and it is unclear what that might be as of now well keep our comments out for now. Stay right there, we have some comments coming through right now. This is an internal letter to employees. Saying the goal was not to sell but rather to ban the app. Saying antichinese sentiment has risen in many countries in the last two years he tells employees that the current atmosphere says the company must anticipate further difficulties that is from the bite dance ceo. You say we could see an escalation here from the chinese side of things what is optimal from bite dance . What do they want to happen here for bite dance, this is going to be a tough period for them for sure as the ceo just mentioned there. What was interesting about tiktok, it was one of the first examples of the chinese social media app that cracked the market and other markets as well it was seen as a threat to facebook and youtube for byte dance, this represented their ability to crack Global Markets. That is really going to hurt them in china, byte dance offers a version specifically for the Chinese Market plus it is dipping into other areas like mobil gaming and other areas as well. The Chinese Market for byte dance is a place they can still thrive and play. The market has become more difficult now given the situation. Really, this is byte dances only Global Market at the moment always great to have you on the show and to have you react in real time thank you to ar arjun coming from china the u. S. Lawmakers move closer to a deal on a massive new stimulus package more after the break hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Welcome back to street signs. Hurricane isaias has been downgraded to a Tropical Storm gradually weakening and bringing strong winds along the east coast today. I home my family in boston has umbrellas ready. New jersey governor tightens restrictions on indoor gatherings these events will be restricted to 25 roam capacity with a maximum of 25 people that is down from 100. White house Health Advisor says states with infections should reconsider lockdowns adding that it is crucial this be contained before flu season he added there is a degree of airborn spread of the virus circulation and recirculation of air if you have any degree of air solization and you are in and in door space where air is being circulated, it makes sense to assume that is a much greater risk than if you were outside. Over the last 24 hours, a number of fed officials has called on lawmakers to raise federal spending chicago fed president said fiscal support was fundamental to a long term recovery. Saying that pulling support from consumers and businesses would be traumatic to the economy. White house officials said they have made progress in talks to a massive key stimulus package including exceptions of benefits from unemployed americans and shielding companies. Hit out at democrats for increased demands for state and local governments during the pandemic they want bailout money they are not interested in the people, unemployment, evictions, which is a big deal. Im going to stop it because ill do it myself, if i have to. I have a lot of powers with respect to executive orders. We are looking at that very seriously right now. Lets bring in the professor of international politics. Thanks for joining us. Would love to hear how you think President Trump stands at this point heading into the november elections. We all think we are very clear now that polling position across the states including heartland states and swing states, President Trump is far behind Vice President biden. So i think that in effect, hes now eating into the support of some of his core con stit one sis. When we look at places like portland where federal Law Enforcement have been very, very active a lot of people like veterans and mothers being treated very, very badly and facing the full force of the law i think President Trump is in a very, very difficult position with regard to november. Just a few days ago, President Trump floated the idea of pushing the elections back. That was immediately received with criticism in the days since then, it has fallen away a bit. Surely he knew this would be the reaction what do you think his aim was . I think well see it in the context of even the victory of 2016, he agreed to the idea there was voter fraud. He has been saying the inquiry robbed him of the first two years of his administration and saying those off the cuff remarks. When we get into the july and august of an election year, hes trying to legitimize not only the delaying of the election but the results of the election, that could cause a great deal of chaos especially if he loses narrowly and that could well tie up the country in real political turmoil which has potential for a large amount of strive and violence as well in this scenario you you are painting, President Trump loses by a narrow march ggin and refu to leave office. What does that look like there are 50 separate elections. Every state has a single one each state legislature will be the one which will certificate the actual results for that state. If republican states decide theyll go with President Trump and challenge the electoral result, you could have complete break down of the political system that whole idea of a smooth transfer of power from one president , one administration to the other would be out of the way. We had an example in 2016 with president obama. President trump isnt like that. He thrives on strive and crisis. I think this would royal the whole political system weve got the kind of pandemic protests, the post george floyd, black lives matter protests. Those would pail in significance of what would happen after november 3 if President Trump bares out that kind of action. I want to ask you about what is happening between u. S. And china. Many have called the tech war, the new cold war, the new version of what we saw between the United States and soviet union. You dont think thats an accurate characterization . Why not . It feels a little like a cold war. There was two camps communist and capitalism we do not have those china is nowhere near. You may call it a communist and maxist state but has landed on capitolism over the past few years. And we dont have the kind of basic buildings blocks of a cold war. We have geopolitical competition. Even that has an deciditisecurid the rising power in china. Even that, there is a prag ma tichl involved you can have the bri but make it more ransparent. We have a jockeying for position, an attempt to try to suborder na suborder nate china. The soviet union was a weak economy. In the end, china is nowhere near that kind of competitor it is interdependent thats why we can see germany, britain and australia are not fully buying the trump line on china. Nor are the democrats fully, actually what weve got in geopolitical competition underpinned by the dependence that causes a ex concern. I dont even think trump buys his own message the way hes speaking about im surprised to hear you call relations as pragmatic. Looking at what is happening with tiktok with President Trump saying hes going to ban the video app in the United States and now looking at microsoft potentially buying the u. S. Operations of it are you being too generous calling the relations pragmatic . I think weve got to take a kind of long term and short term view the short Term Position is clear, President Trump is in a desperate position in terms of the election hes mishandled the pandemic the chinese handled it a little better of course they did withhold information for some time. The mishandling of that and the outbreak after George Floyds killing that has taken a high ground away from President Trump. So hes very desperate the cunnikung if you or the wuhn virus, hes ramping that up. China and the United States is where they are today because of the relationship between them since 1978 the interdependence is fully recognized china is not going anywhere and the u. S. Has no interest of knocking china out they may want reforms in china but the chinese economy couldnt just disappear and leave the rest of the world untouched. Thats where the problem lies. Youve got china as a big power. Economically, it is very, very powerful and interdependent thank you for sharing your comments with us u. S. Futures lets look where we stand. Red across the board the s p 500, the dow and nasdaq pointing to a weaker start after the rally we saw yesterday with the nasdaq posting a fresh record high. Thats it for the show im Julianna Tatelbaum orwi ehaes n wlddexcng iupext. Hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. It is 5 00 at cnbc and your top five 5. Tech looking for more gains this morning. One stock getting all the love as its Market Company closes in on the 2 trillion mark. Bracing for isaias the storm building up speed. A live report from the eye of the storm coming up