Transcripts For CNBC Street Signs 20240712

Identify other key issues the governing council will aim to address in the next few months there is however, one issue on which i can decide today all members of the governing council will agree with me we must complain much bet tort general public what we are doing and why we are doing it and we must talk to people that we do not normally reach this has to case cade through our review, inflation name, inflation measure, tools and effectiveness and how they take into account new challenges that people actually care about housing cost, Climate Change and inequality im fully committed to that. Monitory policy can only be credible if we are sure our goals are true and shared by the people we serve. As an independent central bank, we are and we will remain accountable to them. Thank you very much for your attention. A warm welcome to street signs. If you are just joining us, im Julianna Tatelbaum lets kick off with what we just heard from madam lagarde she was delivering a speech at the ecb. If you tuned in a few minutes ago, when she kicked off, she opened talking about three issues that were featured prominently. These center around inflation. She said, how to formulate the inflation range and measure of inflation that lies beyond the inflation name are three key issues to foous focus on the review she also said the phillips curve may be in tact but remain flat there is a lot of debate whether the phillips curve is dead or may be looking less useful she just wrapped up raising key considerations moving forward. One around the policy. She raised the question of what should the standardized Central Bank Tool Kit look like when the policy is normal policy. That would be a key question moving forward wrapping up talking about fiscal policy saying that fiscal policy empowers by fostering demand and the same time monitory policy makes fiscal policy effective. Annette, what did you make of madam lagardes speech i think you have summarized it perfectly i can only add some details when it comes to her contemplation whether this crisis might be more disinflationary or not. Hear the jury is out because obviously the first take from that crisis is that we are seeing a serious dis inflationary trend if you look through that, thats what im hearing from the ecb. They are not convinced whether the nondis inflationary affects can be seen now. There will be shifts in economic structure and perhaps changes in the way our companies are producing and procuring their components which mean the prices could actually rise. Thats one el vent also, her general comments that Monetary Policy needs to be better explained to the general public that is her main goal and one of the reasons she got the job. Before draghi, there was a general connection with the general public it is difficult to explain it but i think what her aim is, to outline the measures there to be deployed or explain it more often, why they do what. Most likely that speech was also the grand opening in a world where we perhaps never see a general normalization of policy. What she was reiterating was that they need to get inflation back to its target where the target is is part of the strategy review but also the standard policy tools may actually stay in place because it needs they need to stay in place to boost inflation or to have inflation at a level they want to have it. Back to you. Annette, thank you for joining us and weighing in i want to bring you fresh comments out of volkswagen they continue to expect positive operating results in 2020. September deliveries and orders expected to be higher than a year ago they plan to invest 14 billion in technology and autonomy driving through 2024 and volkswagen reiterating plans to vest 33 billion in electric mobility by 2024 they plan to hike the production in the house from 60 to 10 they are planning to integrate more of that supply chain. Overall, the message being they expect the upward trend to continue for the rest of 2020. So a positive update from volkswagen lets look at european markets and how we are trading we are seeing red across the board. Fairly muted moves after yesterdays president ial debate. The first of its kind. Well be right back. Welcome back to street signs. Im Julianna Tatelbaum these are your headlines ecb president said failure to meet inflation targets could shorten policy horizon after saying Central Banks actions supported the economy. Our economies are changing increasingly quickly we need to keep track of broad concepts that capture the costs people face in their every day life it is about future proofing how we measure inflation the president ial debates trade barbs over virus response. We won the election and there for we have the right to choose her. The American People have a right to have a say in who the Supreme Court nominee is, that say occurs when they vote for United States senators and the president of the United States shares in shell trade higher after the oil giant announces plans to cut 9,000 jobs as it transitions to lowcarbon energy after a drive for a stake in the waste water company. Lets get a check on the european markets it has been a choppy session we started the move with the stoxx 600 a little above the flat line. We have turned negative. Every major region participating. The dax and the cac 40 down 0. 7 this is pulling alongside a weakening in u. S. Futures. So perhaps some of that sentiment hitting the markets as well the main benchmark dropped 0. 4 reflecting evenly spread losses. Banks dropping about 2. 2 . Lets dive in to see what the sector split looks like. Utilities and oil and gas holding up well about 0. 5. Shell shares within that basket performing particularly well after the announcement of job cuts food and bef, reecity state. On the down side, well look at the worst performers travel and leisure down 9. 5 taking the biggest hit as they continue to weigh the rising case numbers and what that means for further restrictions here. Technology down 1. 3 autos down 1. 1 we heard from volkswagen offering positive comments around the next couple of months from here toward the end of the year also reiterating plans. President trump has once again sown doubt over the outcome of the election warning of fraud expected the deluge of mailin ballots. We might not know for months. Take a look at what happened in manhattan and new jersey, virginia they are not losing 2 or 1 they are losing 30 and 40 it is a fraud and a shame. Can you imagine where they say you have to have your ballot in by november 10 november 10. That is seven days after the election in theory should have been announced okay. Joe biden promised to support the results of the election and dismissed concerns over the integrity of the vote. Here is the deal. Well count the ballots. Some of these cant even be opened until election day. If there is thousands of ballots, it will take time to do it by the way, our military, theyve been voting by ballot since the end of the civil war why is it for them somehow not fraudulent we have this report from cleveland. Reporter no handshake for the first president ial debate in covid times. The candidates diving straight in to hand to hand combats im not here to call out his lies Everybody Knows hes a liar. Yougraduated last in his class not first. President , can you let him finish he doesnt know how to do that the moderator repeatedly asking President Trump to stop interrupting you are the worst president america has ever had in 47 months, ive done more than youve done in 47 years joe biden hammering President Trump for his handling of the pandemic he panicked or he just looked at the stock market. One of the two because guess what, a lot of people died. A lot more will die. This guy will close down the whole country and destroy our country. Our country is coming back incredibly well. We handed him a booming economy. He blue it taking on race in america this exchange over violence in american cities. This is a president who used everything as a dog whistle to generate racist hate ed and division the people of this country want and demand law and order and you are afraid to even say it President Trump notably refused to say white supremacist. If i see tens of thousands of ballots manipulated. Show up and vote. Vote, vote, vote two very different approaches from the two men vowing to lead this country out of this crisis. In cleveland, alice barr, nbc news well have more analysis as we are joined by Anthony Coley at 10 45 cet back to some key corporates in focus. Covestro has bought dsms resin unit they have denied they are in take over talks with Apollo Management seeing a sharp reaction. It looks like investors in that stock dont like the terms of this deal. That would be when the share price reaction would suggest dsm in contrast, a unit that is the company that is selling quite the option reaction. Shares up 3. 5 lets talk chip maker, micron as it does not know when it can get a license to sell to huawei. Has been hit by sanctions from the Trump Administration youve got to look at european chip makers down asml down about 2 ams down also taking a hit in the oil sector, shell says it will cut 10 of its work force over the next few years. Saying the overhaul could lead to some 2. 5 billion in cost savings. In the latest operations update, shell also said it would slash oil and Gas Production to equivalent of just over 3,000 barrels a day. Veolia has raised its offer to buy 29. 9 stake in rival suez the story rolls on lets bring in charlotte for the latest we were waiting to see if veolia would up its offer they have. Does this change the prospects of getting this deal done . It is interesting they announced they were looking at raising the offer from the 18 euro share one of the key elements was the french government and has a key voice in whether this deal in vee oela can buy stake in suez it was interesting to see the french finance minister said we need time. This new improved offer from veolia is only valid until midnight tonight they are open to have a period of six months where the two companies can discuss and try to reach an agreement if after six months, then they said they will submit others to Share Holders and that they would consider going hostile this is not his preferred scenario another thing mentioned is that they committed to maintain full employment in france that is something the french government was keep to keep an eye on part of the offer veolia committed to is selling the french water business of suez. That was the stumbling block of the two companies merging together because of the concerns over the specific business already found a buyer from that and said they are committed to protect jobs in france as part of that operation. One final thing, they want suez to remove a mechanism in place to put this french work into business to a dutch foundation, which is a poison pill trying to block this merger. Now with this improved offer saying this mechanism has to be improved interesting to see this new development and one of the m a french saga and the latest chapter. So midnight being the deadline in any case, market responding positively to this we see them both at the top with veolia up 2 and suez up more than 7 on the French Market this is a complex story there is so many different players to keep straight youve got veolia hoping to buy suez and then onge with the french government. Theyve been pushing back. Ultimately, they have to decide whether this is a deal they want to go ahead with does todays proproesal address this the sixmonth negotiation is part of the way to woe suez. It is the french government that really has a voice here. We heard from activist Amber Capital who wrote a letter to them and said this offer was a unique opportunity to create value for the shareholders with the covid crisis, this being positive for ng resharing restructure and strategy they were going through saying, remember, the french appetite for national champion. This would be, no doubt. Remember veolia when they made the approach that this would be like man city and Manchester United getting together. They have to convince ng, the french government and suez further down the line. Thank you for making a complicated story easy to digest the uk has reported more than 7,000 new covid cases in the last 24 hours. The highest number since the pandemic began the Prime Minister is set to give an outbreak later today tighter restrictions about households mixing. Residents will not be able to meet people from other households in doors as infections continue to rise in the region the Spanish Government is set to provide new rules for areas with high infection rates. In madrid, the capital became the latest hot spot logging over 50,000 new cases in the past two weeks and could provide a breakthrough in the standoff between officials and the government over how best to respond. Moving on to germany, fresh restrictions around public gatherings as the country reported more than 2,000 new cases over the past 24 hours announcing new measures, german chancellor also stressed they must keep track of guests to avoid becoming coronavirus hotbeds. Translator we must ensure in restaurants and other places were personal details are required, that they are properly completed. In places where more than 35 new infections and hundred thousand residents, the number of people attending should be limited to 50 and no more than 25 should attend those held in private homes. If the number of infections hit 50 per 100,000 residents, those figures should be cut from 25 to 10 disney plans to layoff 28,000 employees as california location remains shut the state of california receipt sifts to lift the decision as a factor disney reported a 2 billion operating loss it furloughed more than 100,000 employees earlier amid the initial lockdown a huge impact at disney. Shares of palantir are going to debut on the Stock Exchange as a direct listing. Valuing the company just under 16 billion. The data firm has enlisted provisions to ensure its founders maintain control of the company in the future. Lets look at futures. You can see red across the board, the dow is set to open about 150 points lower the s p 500 looking at a soft start as well looking 20 points lower. Yesterday, the s p dropped about 0. 5 and the market was unable to maintain that strong momentum on monday. Coming up, a september fall will snap a fivemonth win streak more on that after the break welcome back to street signs. Im Julianna Tatelbaum these are your headlines ecb president says a failure to shorten policy horizon could impact our economies are changing increasingly quickly we need to keep track of broad concepts that touch what people face in their ever day life. It is about future proving the president ial debates get off to a heated start. Trading barbs. We won the election and there for we have the right to choose her. Very few people knowingly would say otherwise. The American People have a right to have a say in who the Supreme Court nominee is that say occurs when they vote for United States senators and the president of the United States shares in shell trade higher after the oil giant announces plans to cut 9,000 jobs as it transitions to low carbon. Getting closer, shares shoot towards the stoxx 600 after the rival veolia raises a stake in the waiste Water Management company. European markets are off to a weak start we did get glimpse of green early on the ftd se 100 down. Bouncing off the absolute lows in the morning the ftse mib down in italy we saw the stoxx 600600 fell 0. 5 banks under performing we have seen a little bounce back oil and gas up 0. 6 . Shell shares performing well within that basket u. S. Futures red on the board there. The dow about 160 points lower we saw the dow fall about 130 points the s p 500 looking to open a bit weaker and the nasdaq looking to open about 90 points lore this is after the first of the president ial debates between joe biden and President Trump. Closing out september the final day of september, you can see the cac 40 underperforming in the indices. The ftse 100 and the dax holding up a little better europe overall where major indices have taken a harder hitter the nasdaq down 6 . Scott, great to have you with us lets kick off on the note where you see things moving forward. What we have seen is that the policy response and the virus response following that has been better than in the United States we have seen the restart coming out of the virus and policies. What we notice is that europe is doing a better job and allowing their economies to open. When we look at the percentage of economic growth, europe is way ahead and regaining what we had loss in many respects, the idea that fundamental perspective, the response is better, more stringent to begin with but has allowed mobility to return and activity to return the thing weve been working with for some time reflecting the policies around the virus. If you look at the u. S. , the bulk of the selloff has been the prime beneficiaries since march. At the start of that selloff in early september, some were taking it as a bullish sign so far as it meant that investors were looking to access the stocks and come out of these Growth Stocks viewed as a safer way to invest your money do you think thats away we should look at it Going Forward that it should be optimistic or positive signal. Depending on the out come of the election and the amount of fiscal spending, both covid related and Sustainable Energy related. We could see a broadening, it is not just technology. It is the companies that have benefitted in many respects from the crisis we expect not necessarily a rotation out of that but a broadening of that rally that would include a smaller cap name that are part of that same benefit from the covid19 crisis not really necessarily a rotation but a broadening out of the smaller caps to the megacaps lets talk about the fed average inflation policy has been a real focal point for investors. You seem to be higher in the inflation camp how do you see inflation coming in the quarters . Not for tomorrow but some what in the near term part of it is the covid crisis itself would reinforce the trends for example like we just talked about, the Large Companies dominating the landscape. We think those bringing higher than production costs. They will increase prices must leverage return of higher wages. There are a number of things the covid19 crisis has accelerated that we think are inflationary again, what Christine Lagarde was mentioning this morning. If you add all of those up, then i think the pictures have fully appreciated it what are your thoughts on madam lagardes speech i think in many respects, what we are seeing is this policy revolution. Monetary and fiscal policy are working hand in hand to address both the covid crisis and broader Economic Impact of the crisis that is something i think investors have begun to factor into their markets when we look at things like fiscal spending, it becomes important. They are linked together the ecb looks Going Forward and obviously the inflation profile that they are focused on they are looking at how governments respond to the fiscal policies as well as Monetary Policy. So really it is this policy revolution that continues we are seeing in the United States and will continue elsewhere. Lets dive into some of your asset class views. You have turned neutral on equities, credit and cash. One area we like very much is markets globally where we think will be a little more challenging those longer term rates would rise in both Monetary Policy and refinancing allowing for those adve advantageous rates looking at the spreads and generally looking through where we find that in particular as the investors high yield. This stuck out to me in the latest Research Given the nontraditional private assets. What can you say to assure them that these are desirable assets to consider . Is. The private markets are not as liquid as public markets. There is this very important idea that by vesting and doing the credit work around the additional investment. There is a liquidity and a benefit from higher than expected returns and being able to understand to allow for the attractive and correlated the return which is how we view the higher market and greater resilience to the ebb and flow of the markets thank you for joining us. As a reminder, you can follow us on street signs on twitter to get involved in the conversation a lot to talk about behind the first president ial debate. Tweet me directly cnbc julianna still ahead, donald trump and joe biden clash in that first debate well have more on that next welcome back to street signs. The u. S. Senate is attempting to pass a budget to avoid a government shut down the u. S. House of representatives agreed to the bill democratic speaker of the house pelosi has expressed hope after holding talks as the two sides prepare for more talks today telling larry kudlow, the cnbc aims to push through some of the specific proposals we have made concrete, specific, well targeted and smart policy proposals to aid well targeted sectors, such as returning to school and helping Small Businesses we want to help the airlines, we can have more assistances to unemployment we are not ending this we are not the ones doing this well have an exclusive interview coming up. And President Trump and joe biden clash in their first debate before the november election the Heated Exchange often descended into name calling with both candidates trading insults and accusations. The u. S. President once again blamed china if we would have listed to you, the country would have been left wide open one person is too much, its chinas fault. It never happened. It is chinas fault. You dont know how many people died in china, russia, india they dont give you a straight count, just so you understand. Biden claimed trump failed to protect meshes saying, he quote, panicked no one, no, we didnt shut down the economy this is his economy. He shut it down. The reason he shut it down you folks at home, how many of you woke up and had an empty chair at the table because somebody died. You lost your mom or dad and you couldnt even speak to them. Joining us now, Anthony Coley. A former Deputy Assistant treasury secretary in the Obama Administration he also advised former republican Richard Baker while he was managing. Thank you for stag up after last nights debate let me first ask you, do you think there was a winner from last nights debate. Thank you for having me i can tell you who the loser is. The loser is the American People weve never seen anything quite like this in American History for 90 seconds this was billed as a debate. It really wasnt a debate. This president bullied and bulldozed his way through a 90 minute conversation filled with lies, in5 0 rasryes and untruths he kept the Fact Checkers on their toes the reality is, i worked in the obama treasury department. I am not his audience. There are a lot of people when you think about the expected elector rat who see in donald trump a disruptor and what to change the status quo. Many of these people walked away, i think happy with what they saw last night. One thing in particular that struck me as particularly res ne nating with this group he said hes done more in 47 months than joe biden has done in 47 years. Im a democrat, ive heard that. That stung a little bit. When you talk about President Trumps supporters they view him as disruptors. What about the undecided voters. Estimates seem to range between 9 to 14 , the number of people who are waiting to decide to vote for do you think last night made the decision for any of those people thats the Million Dollar question you said it right. They are about 10 to 14 of persuadable voters there are people like me who will spend the next 30, 40 days to people who dont pay attention. If im donald trump, how do i talk to people if i were advising him, i would focus on the how the economy worked leading into this coronavirus pandemic and quite frankly on the back end of the pandemic, where we are right now. This is september 30, the final day of the Third Quarter the Federal Reserve bank is suggesting that gdp growth for this particular quarter will be upwards of 7 what we saw in the last quarter the last quarter was 9. 5 growth in gdp when you get beneath the layers, there is a lot of nuance there the American Economy is working for people who p residences in that area but not necessarily for the nursery worker or hospital worker. I think joe biden is in as strong as a position he could be right now. The reality is that this president needed momentum to shake up this race the data says hes not doing as good as he wanted to do with those persuadable voters you talked about roughly 10 of the electorate. I grew up in north carolina. That is a swing state. I dont know many suburban women who quite frankly would have been turned on or pleased with all of that bickering and talking over each other last night. Thats the Million Dollar question, how effective was he it remains to be seen. We know going into the debate, bidens strategy was expected to focus on President Trumps handling of the pandemic we did see joe biden talk about this in last nights debate but some of his supporters have been critical that he doesnt come off strong enough. Do you think that is a missed opportunity that has passed. So do you think we could see biden resurface and push to get them to go against President Trump on that basis. Joe biden was at his best last night when he looked directly to the camera and talked to the American People. Even while donald trump was doing his antics over to the side you played in the lead up to this clip how joe biden makes it real he didnt talk about numbers on the coronavirus, he talked about people who have lost loved ones. He looked directly in his eye and talked about those folks the coronavirus and the handling of it is an issue for this president. If joe biden talks about his handling of the virus just based on the data, how many countries have handled this better than the United States. We used to be a Global Leader when handling global crises. Under Donald Trumps watch, we are not. A lot of the frustration was really coming from both sides of the table last night i think it is fair to say both republicans and democrats wish we got more policy insight instead of talking over each other. We have the Vice President ial debate coming up in early october. Do you think that could be a real opportunity here for voters to get insight into how the administrations plan to push ahead. Is this a more important Vice President ial debate than in years past it is an important. I will tell you both Vice President pence and senator harris, we are not going to see that chaos we saw last night this is both a lady and a gentleman. I think well have the type of policy discussion that quite frankly we are used to having in america. The next president ial debate is a different format this is a format that i think is a week after this debate with pence and harris this is a town hall format if it happens, there is already some talk right now that there is no use to having a debate if the debate happens, it is a different format i think donald trump will have a harder time talking over moderators and doing it in front of a socially distanced audience in a taun hall format. Well have to leave it there. Founding partner, Corner Office strategies lets look at u. S. Futures and how we are poised to start the day on wall street red across the board not quite as red as earlier this morning looking at the dow jones following about a 130point drop yesterday. Following a 0. 3 drop yesterday. The s p looking at a relatively soft start following a drop yesterday for the s p as well. That is it for street signs. Worldwide exchange is coming up next. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save up to 400 a year on your wireless bill. With the carrier rated 1 in customer satisfaction. Call, click, or visit your local xfinity store today. It is 5 00 stocks looking to close out an already sour month on a low note futures point to triple losses for the dow. Nothing but chaos in cleveland as President Trump and former Vice President go head to head in the first 2020 president ial debate the 17year wait is over for wall street as palanti