Selloff in snap as earnings disappoint uniper shares are dipping and the economy minister accuses russia of blackmailing europe on gas. Italy prepares for a september election after the coalition collapses after being forced to accept Mario Draghis resignation. It has been a tremendously busy week for europe we are squaring off the week with pmi data out of the major economies. Germany and france a short while back to bring you the eurozone pmi flash number it has on the surface side coming in at 50. 6 in july versus consensus number of 52 disappointing and also a slowdown from where we were in june back at 53. As for the manufacturing number, that came in at 46. 1 a remarkable slowdown from june. 49. 3 in june the total composite number for july came in at 49. 4 again, slowing down from the numbers in june which was 52 much lower than consensus at 51. Disappointing. Germany and france a short while ago and Chris Williamson was on the show speaking to julianna a while ago and saying services and manufacturing seeing activity nose dive a remarkable reaction in the 10year bund yield down 14 basis points today after the selloff of ecb hiking Interest Rates it took the market by surprise today, you can see the bund market is reacting to the fact that the data has started to turn and questions about the ecbs willingness to keep tightening and hiking rates in the environment where the data is slowing 2year bund down 19 basis points we see reaction in the currency. Currency is coming up. I have been talking and lets recap the german data. Business activity shrinking in july services pmi from 49. 2 Manufacturing Sector contracted coming in well shy of last months 52 reading both had been expected to show growth in france, Flash Services data came in lower than last month at 52. 1 the manufacturing reading showed the sector contracting again for expectations of growth this is the picture for currency the irony, ecb hiked 50 basis points they are keeping a close eye on the currency we bounced after yesterdays announcement all of these pmi numbers have taken that positivity out of the euro today of we have come off. 90 another look at european yields. Big moves there across all of the different bunds. 10 basis points lower. Spain is 15 basis points lower italy is down 9 basis points today. Not keeping up with the move in 10yo 10year bund on a spread. It is a bit wider. Turning to earnings now. Posted record results for the Second Quarter nor norsk it nearly doubled on the year to 11. 6 billion norwegian crowns. I have to say the cfo is joining us on the show just talk us through some of the tailwinds you have seen and the reason the catalyst for you posting such strong results this quarter. Strong results this quarter and the fifth consecutive quarter with record results. The big driver is the aluminum price and premium on the aluminum prices. We are benefitting from the markets in the Second Quarter. We are the norwegian producer and benefitting from the appreciation of the dollar this combined with the strong earnings in recycling and greener products and High Energy Prices benefitting our results can i just ask you one of the major themes for Companies Last quarter, but more this quarter, is that of rising costs. How have you had to adapt to rising input costs well, rising input costs we see across operations also when it comes to fuel and oil and pitch. We have seen this start to flatten a bit. We have not taken any additional measures than continuing to produce and absorbing the cost with a higher margin. Just in terms of some of the costs, the catalyst being logistics bottlenecks. Do you see signs of that easing in the second half of the year we see it easing to some extent of course, it is volatility. You see in freight coming up in places and some of the harbor bottlenecks loosening up unless we see more covid restrictions in place such as china, the outlook is a bit more positive than it was a here ago. There has been a lot of focus on the Energy Storage situation across the countries in europe and im interested to you because your reservoir provided 90 of norways levels how do you see it panning out in the winter months . In europe and norway, the Energy Markets are tighter now we had a drier period in the southwest norway and draining that reservoir it has pushed prices upwards if we have a situation with normal rain during the period to come, the balance should be okay moving into the winter quarters. If we have less rain and improvements in hydro logical balance than normal, the situation can be more cons constrained. This is due to the market prices driven up and this drives the consumer changes and the like. I guess we will have to go forward and see how the weather plays out to know what the situation will be like in the Fourth Quarter for a company like hydro, we have power contracts for the majority of the proper duction we sellec electricity in the market just the final question he to wrap it up do you have a view on the power issues has the market integrated enough or is this a degree of fragme fragmentation . There is some degree of fragmentation. I think there is a lot of comments and work and discussion to be had before all countries align on one solution. We are not fully there yet it is very important which is unde undertaken i believe we will find a good solution as we move forward. Excellent thank you so much for coming on the show and sharing your thoughts on the erarnings. Coming up on street signs. Snap plunges in double digits in the Second Quarter find out why after the break they use stamps. Com all the services of the post office only cheaper get a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again. Welcome back to street signs. Lets get a check of the markets. What a week it has been. We had the political shenanigans culminating with the elections on the 25th and the ecb hike rates for the first time in 11 years yesterday by 50 basis points the market pencilled in 35 basis points and the tool with the antifragmentation tool and the nord stream 1 flows. The Energy Market has been watching that closely. Finally today, it has come to a head because we have the eurozone flash pmi numbers disappointing. The eurozone as a whole coming in disappointing manufacturing and services as the cost of living crisis is biting as far as services is concerned and manufacturing with major bottlenecks. Stoxx 600 reaction is positive up. 2 the others have not been positive bund and european bund markets are rallying and the euro is coming off as for individual markets, the indices breakdown. Ftse 100 up. 20 this despite weak uk retail sales data and Weak Consumer Confidence data coming in this morning. 9 30 is when the pmi numbers come in. Cac 40 in france is flat index levels in germany are flat despite the disappointing pmi. Ftse mib in italy is down. 10 some positivity on the bank side after the ecb rate hike yesterday. A boone for the banking sector. It is mixed this morning cyclicals on the back foot autos down and basic resources are down similarly this turned after the pmi data this morning the defensive plays with utilities up 1. 2 . Real estate up 1 . Oil and gas is up. 90 in terms of company earnings, posted an 18 bump in sale fos for the first half of year for sika. The swiss chemical confirmed the annual Sales Forecast despite admitting tougher Market Conditions the ceo of sika joins us on the show today good morning, thomas tell us your overall impression of the first half of the year. It seems as the numbers came out stronger, but the Market Reaction is a bit telling. It is not as much or not as strong as some analysts had been hoping for okay. Good morning thanks for sharing yes, you mentioned it. Top conditions and getting more tough over the six months. The year started as expected with the challenges passing over from last year then we he saw with twar in ukraine the stress building up and europe with the impact on the supply chain and especially on the automotive side and the markets around the globe and in north america which is particularly strong and not so much impacted by the situation in europe. China in lockdown for more than two months which was heavy impact to our business the last two months we were recovering well. For us, the economic instability we anticipate is to continue still, we see our own elements which are the Market Penetration which expands which we see strong signs in china. Also very strong sustainable volume growth in the americas which gives us confidence for a full year that we will be able to deliver output and as our profit grows above 10 net sales growth. It is interesting to hear you spell it out on the geographic level. I wonder if the big bounce is beginning to dwindle especially with so much of the world facing a cost of living crisis and scaling back on more Discretionary Spending clearly construction is a sector that is cyclical as we follow those trends to some part that is correct. We have areas in europe with exceptional demand especially on the small improvements and Home Improvements people were operating their home office or their facilities which pushed last year business especially in europe this is not as strong as it was. Thats clearly a factor. Other than that, we have strong demands in north america and south america and beyond lets say the recovery from the demands are healthy. Also on new construction there might be stress. We are resilient with refurbishment. A lot of infrastructure and building have maintenance needs which cannot be postponed. This is healthy for business and takes us out of the cyclical element. Sir, sika is a company which is active in producing or using or making products used in waterproofing and helping to support concrete as we know, concrete is one of the largest carbon he emitters i wonder if you worry about the outlook with the focus to move to greener and cleaner alternatives concrete doesnt fit into the mix. Absolutely. The concrete contribution to the overall co2 emission is tremendous here it is a Building Material which has great value, but we have to solve the co2 footprint. For this, our solutions are excellent enabling factors to bring the footprint of the concrete overall down. I think it cannot continue as this, but also not easily replaceable material soon. The concrete footprint on co2 can be opt myimized by bringing materials to make them suitable for the application and use in construction here, absolutely cement is a big contribution and needs to reestablish itself with a lower footprint. Here, we can play a detrimental role to bring this forward sdpforward. Thank you for your thoughts the ceo of sika. Reporting earnings today now a deal to bail outuniper could be announced today according to reuters the German Government will take a stake in the utility firm. Uniper is the biggest supporter of russian gas, but losing money as it buys gas elsewhere because of reduced delivers from gazprom. It could pass prices on to con consumers. Retail sales fell in june with fuel and clothing leading the declines mays drop was lower to negative this as a survey finds british confidence at a 48year low amid soaring inflation. And the uk competition in markets authority cleared bt groups planned adventure with warner discovery bt Group Welcomes the move. And delivery hero is popping on t on the preliminary Second Quarter. It is expected to jump to 1. 2 billion euro and topping the forecast for the year. Quite the reaction in the stock today. Up about 16 and up 40 over the last three months. Unisoft slashed guidance in half the french video game publisher is cutting growth forecast from 20 to 10 for the year and is pushing back the release of the avatar video game set to coincide with the release of the film and snap shares are down 20 in extended u. S. Trading this after the social Media Company reported disappointing Second Quarter results on weakening advertising demand and announced plans to slow hiring due to weakening Revenue Group the snap disappointing earnings spilled over to other tech and social Media Companies this is a picture for meta for example. The Parent Company of facebook down 4. 7 . Twitter down about 2 points knockon effect from snap and spilling into other tech names. This is a picture for alphabet and pinterest down for the day. Julia boorstin filed this report missing on the top and bottom lines. Revenue of 1. 1 billion. That was a bit lighter the Company Announcing it lost 2 Cents Per Share versus 1 cent which the street forecasted. Revenue growth was flat compared to a year ago. That is compared to the 18 the Company Growth in Third Quarter. It is down from the 13 growth from the Second Quarter. All of this comes after the Company Already lowered its growth forecast. All of the negative news overshadowing better than expected user growth the company added 15 million daily active users in the quarter and guided to better than expected growth in the Third Quarter projecting that Third Quarter daily users will be 360 million snap Ceo Evan Spiegel saying they are not satisfied with the results. He pointed to impact from policy changes and Macro Economic challenges and competition for what he called ad dollars that are growing slowly he said it would take time before we see significant improvement. Now to address the shortfall, sp spiegel says they are looking to address sources. They are looking to drive productivity and including a reduced rate of hiring and strict reprioritization of goals and initiatives. In other news, snap authorized a 500 million stock buyback julia boorstin, cnbc business news, los angeles. And also coming up on street signs. Germany says moscow is blackmailing europe as nord stream 1 is operating at reduced capacity and the pipeline is held up by red tape. Well be right back. Why do nearly one million businesses choose stamps. Com to mail and ship . No more trips to the post office no more paying full price for postage and great rates from usps and ups mail letters ship packages anytime anywhere for less a lot less get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again welcome back to street signs. Im Joumanna Bercetche these are the headlines. Euro accelerates losses as Business Activity slips into contraction territory with forecasts below expected and the ecb goes for a 50 basis point hike the first in a decade. Finally lifting the benchmark rate out of territory. Rallied to the consensus of 50 basis points. So it is a strong indication on both accounts in relation to the higher step that we are taking to exit from negative Interest Rates. Italy preparing for a september election after the president is forced to accept Mario Draghis resignation there is no parliament to support the government or new majority this made it inevitable that the solution was expected. And germanys economy minister accuses russia of blackmailing europe on gas we are just awaiting the flash pmi data from the uk while we wait, lets look at sterling you can see sterling reacted as well to the weaker eurozone pmi numbers a half hour ago. Expectation is the uk will have weaker numbers coming through. Eurozone pmi pointed to a contraction. Chris williamson is saying it is worth minus 0. 1 for the eurozone economy we are watching that closely and reaction in gilt the lowest since july. Thats where we are as we broken through 2 and Flash Services pmi come in at 53. 3. Lower than back in june at 54. 3. The composite pmi coming in at 52. 8 that is versus june at 53. That is softer, but not as weak in the eurozone. It is in expansion territory you see just as we get the numbers, the pound has bounced slightly indicative they are not as bad as people anticipating particularly the ones we got in the eurozone to tell you the consensus number 52 and composite number at 52. 2. A little bit of a beat there manufacturing as we said came in at 52. 8 versus 52. Manufacturing slightly better than expected as well. A little better result out of the uk compared to the eurozone. That is the picture for the pound. Elsewhere, ukraine and russia set to sign a deal to resume black sea grain exports after two months of negotiations this is according to the turkish president Recep Tayyip Erdogan the grains stuck in silos while food prices rised. And hungarys foreign minister argued it is unable to pivot away from reliance from russia swiftly without damaging its economy. A neutral stance has been taken from western allies. A deal to bailout uniper could be announced today the German Government weill take a significant stake in the firm it is losing money as it buys gas elsewhere because it reduced delivers from gazprom. The nord stream 1 Pipeline Maintenance issued which stifled gas supplies to europe is part due to a missing turbine the part is stuck in germany because moscow has not yet issued permits to transport it back the turbine was sent to canada for maintenance and returned to are germany five days ago. Reuters sources says it could be weeks before it can be returned. Germanys economy minister said russia is blackmailing europe over energy. Translator increasingly registering energy which is discussed and technical issues polit politicized. The turbines from canada is an example. It is an example russia doesnt want to take it back the reason for technical problems has a political background that is the opposite of the energy gauarantor im happy heto bring in the Senior Analyst at lng. Thank you for coming on the show the number one question for europe right now is how feasible will it be for eurozone countries to stop being dependent on russian gas and if it can sort itself out in the next 12 months i think in general, the eurozone countries have to focus on what is in their control. As of this point, a lot of attention given what happens with the turbine in russia and if flows will go back to normal or stay at 20 honestly, at this point, they have to focus on what is in their control. That is the demand side measures things likes turning down thermostats and Swimming Pool temperatures things within their control. Thats where the focus should be that is interesting about the demand side of things. One thing that caught the markets attention is the eu looking to enforce a 15 reduction in demand. How can they actually, in practice, go about doing that . How can they force people to lower thermostats in houses and entertain that the public is respecting what they are calling for . As of this point, im not aware it is enforceable yet. My understanding is it is a voluntary reduction. They have warned that if supplies were to get cut further or if we were to see absence of supplies from other courses, for instance, like lng, they would need to come to a drastic point of having to force reduction as it is implemented, as of many things right now, it is still unclear. Lets talk about the storage targets. Eu set an 80 storage target of gas to be achieved by november we know germany is still sitting at 65 how achievable is it that these eurozone countries can achieve 80 by november . Nord stream 1 running at full capacity was required to hit those targets. Obviously without that happening, we are looking at 60 to 70 it could be lower if nord stream 1 were to go to zero it is extremely difficult and they need to attract materially more energy cargos than they already are if they need to achieve Something Like that. Sorry to go back to nord stream 1. This was a big week with maintenance. We know it is back online, but flowing running at 40 of full capacity what does that do to the overall gas storage numbers in terms of how you see this playing out the next couple months in terms of nord stream 1 running close to 60, that is the 40 capacity figure you are talking about. When we think about that, then we think probably close to 65 of Storage Capacity by the end of october again, that is materially lower than the 80 they are aiming for. Nord stream 1 needs to go back to full volumes if 80 is to become reality can i just ask for your view in how you see european gas prices playing out it boils down to that. You have Companies Like uniper forced to buy gas at wholesale prices that are higher than the prices they sell to consumers. What is the outlook for european gas in the second half of the year as with most things, things look uncertain at this point this is expecting nord stream 1 will not return to full capacity at any point before the end of the winter and probably factoring in somewhere between 30 to 60 mcmd. Flows are currently indicating we should expect prices close to 50 per btu this winter. If nord stream 1 were to stop and russia has been dragging their feet, i believe, on permitting the turbine to be reinstalled. Those factors could send prices back up to over 70 per btu. That is a drastic development. It could have the dangerous economic consequences. Your point is markets will likely continue to be supported and natural gas and lng as well. The reason i bring this up is ive been in italy the last couple days. One of the things Prime Minister draghi did before resigning is he signed a new agreement with algeria. Algeria currently is the biggest supplier of gas to italy they managed to divert or try to divert a good chunk of the gas receiving from russia into algeria now. I wonder your outlook for lng with deals with algeria and qatar and azerbaijan how do you see this playing out . In terms of magnitude, last year, russian pipeline gas into europe was somewhere to the tune of 150 billion cubic meters. All of these deals are getting worked with azerbaijan. Lng is a single most scaleable tool in the arsenal to replace any material proportion of russian gas. We are talking about 150 bcm lng can replace a good third of that thats going to be far larger than sources from gas from many of the other sources. It makes sense. Thank you very much for sharing your views today on the show Senior Analyst for gas and lng u. S. President joe biden has tested positive for covid. D biden has been fully vaccinated and received two booster shots is experiencing mild symptoms and will continue to work in isolation. And the january 6th Committee Held the eighth hearing with new witnesses and setting out what former President Trump was doing as supporters attacked the u. S. Capitol. Nbcs susan mccginnuess filed this report. Hoping to see a strong statement clearing out the capitol. Reporter laying out a minute by minute account of trumps conduct. President trump did not fail to act in the 187 minutes between leaving and telling the mob to go home he chose not to act. We fight like hell. Reporter from the end of the speech to the video message to the attackers more than three hours later. Go home we love you. Youre very special. Reporter the committee juxtaposing with rioters clashing with police against a president doing nothing but watch on tv. All the while ignoring the pleas. They need to leave the capitol. Reporter former Deputy Press SecretarySarah Matthews saying Vice President pence let him down the darkest days in the nations history and President Trump was treating it as a celebratory occasion with that tweet. Reporter showing a day later, trump refusing to say the election was over. I dont want to say the election is over congress has certified the results. Reporter the committee weaving a narrative believes it shows the lack of action is a dereliction of duty. For hours, donald trump chose not to answer the pleas from Congress Reporter and broke his oath of office. Susan mcginnis, nbc news, washington. Coming up on street signs. The regusignation ofar mio drag as the economy collapses in italy. Well discuss more stay with us welcome back to the show the ecb has hiked rates by 50 basis points and announced details of the antifragmentation tool with president christine l agarde of going big. This comes six weeks after july would see a hike of 25 basis points president le garde said the hikes would be based on the data we will determine in september on the basis of the data we receive. This is a projection exercise in september, remember . It will include all of the National Central bank and data on the data we receive at the time of the projections, we will determine what step we take on the normalization path that we are taking in order to deliver on the meeting of 2 that doesnt mean to say that we are changing the ultimate point of arrival, okay we are accelerating the exit and following the path of normalization that we have planned. Le a garde says this is to me sure this is transitioned smoothly across the euro area. With the scale of purchases depending on the severity of the risk it focuses on Public Security and a risk of criteria compliance and absence of balance and fiscal sustainability and equality with creditors. That begs the question if you are compliant with the criteria, why need the help in the first place . La garde set out which countries are eligible at bunds continue to widen the discretion in assessment will determine on the basis of the Eligibility Criteria on the basis of the indicators that signal or not disorderly Market Dynamics whether or not a country is eligible and whether it activates the tpi voila. We had positive take from italy. Maire said the governing counselor said the decision on the tpi is showing unity and the commitment to the euro italy is recovering from last couple days it is holding a snap election in september after mario draghi stepped down he stepped down after allies refused to participate in the confidence vote in the parliament this week it will be a major couple of months for italy lets bring a timeline of what we can expect. September 25th is now the general election this is the first time italy holds a general election in autumn in history. They are held in spring usually. The chamber will meet for the first time to put together the budget law the allimportant budget in the legal system and there will be a new electoral law where onethird of the parliamentary seats have been taken out 600 are up for grabs all eyes on the polls. Lets see how they have been evolving in the last couple weeks. We still have brothers of italy at the top at 23 of the total share of the vote. Brothers of it aaly is the only that hasnt participated in the government they are antiimmigration and euro skeptic they have softened that in the past year. On the right, we have lega at 15 . A the expectation is those three parties on the right will come together and perhaps lead the next government. Of course, on the left, pd at 22 and centrist party we need to watch all of this will happen in a couple of months time. Never a dull moment for italian politics lets bring in the senior credit analyst. Welcome. I want to ask how closely are you watching the political situ situation . I say this with all of the love in my heart. It changes every 14 months as a longterm investor, do you look through the changes in the government and focus on the fundamentals thats a great question one tries to take a longterm view in looking at the situation and the fundamentals for italian banks are sound, but the reality is one that you cannot completely divorce italian banks from the broader macro environment where they operate that is due to the fact that italian banks are substantial holders of government bonds. You know any material widening in the spread of german bunds has an impact on the portfolio that does impact on the capitalization we definitely closely follow the developments can i bring it back to yesterday . The ecb hiked 50 basis points. That is more than the market expected surely that is a positive for the banks . What is your view . Definitely. We now migrating back to the situation where we have positive Interest Rates and the importance of that is it allows banks to start making money from the deposits again which is a bread and butter revenue stream for italian banks. Yesterday was very positive actually that with excess liquidity and positive franchises. From the income perspective, it is good for them and you have the announcement with the antifragmentation tool was positive in the situation which could curtail. I was going to ask about your view of the tpi mechanism. One person i spoke to yesterday said this is a tool that is put in place for countries that dont need it the countries that do need it, will not meet the environments necessary to participate in it. How relevant for what you do is the introduction of this tool . I think the goal would still be to propel spread widening on the periphery. We can only hope it does have a positive impact. You know, i think there are still a lot of details left to iron out Going Forward earlier on, we talked about the benefit of the Interest Rate hike it clearly makes sense it is positive for the banking sector. Are there any particular geographies you like to own right now in europe . I think weve probably become a bit more cautious in our outlook. We tend to like the dutch banks. We feel that they offer some d downside protection. The Spanish Banks should also benefit from the right structure of the blending books. That has a greater portion of the lending zone you can expect a wider margin. I think overall this has been positive for banking sector. Finally, as we head into the european banks earning season next week with ubs and Credit Suisse, what are you watching out for . You know, i think Credit Suisse, obviously, have a lot of idiosyncratic issues i think it is really a question of getting some sense of what the new income level for and profitability level for Credit Suisse will be Going Forward after they reduced the risk substantially. Then, you know, i think net new money inflow is important for the swiss managers you know, i think one can anticipate some pressure on fee income just from what we have seen in terms of market movements. Obviously it is management directly thank you for joining us on the show i want to bring you comments we are getting from uniper. It has been reported that fortum is agreeing to a bailout for the German Government. We should get more details in coming days. That is a point of contention. The Parent Company is going to accept the terms of the bailout. We will get more information the German Government was leaning to a 30 stake in uniper that is it for our show today. I am jmaounna bercetche. Worldwide exchange is coming up next. Stay with us when we started selling my Health Products online our shipping process was painfully slow. Then we found shipstation. Now were shipping out orders 5 times faster and were saving a ton. Go to shipstation. Com tv and get 2 months free. It is 5 00 a. M. At cnbc global headquarters. Here is your five 5. Shares of snapchat set to lose a quarter of the value at opening bell after it calls a challenging quarter. Weakness in snap dragging down social media stocks and tech sector which is set to snap a threesession winning streak if these premarket losses hold one big tech investor says the pull back could be a buy opportunity. Outside of sto