Transcripts For CNBC Street 20240703

We have a longerterm horizon and take them independently than any other sicycle. Iag is marking an operating profit for the First Quarter and marking a busy summer season. And Prime Minister Benjamin Netanyahu vows to stand alone ifness pushing back against a warning by President Biden not to invade rafah. If we have to, we will fight with our fingernails and with gods lhelp, we will win together good morning you can see a mostly green day for the european markets not as busy of an earnings day of course, were coming off the bank of england decision to hold rates steady governor Andrew Bailey striking a dovish tone. The stoxx 600 is up over. 50 . On pace for a sixday winning streak the markets started off mixed and then the markets moved higher after the decision. Stocks on pace for the sixday win streak right now lets go to the boards the ftse 100 here is up o over. 50 . Hitting a fresh record high. A quiet day for earnings iag is boosting that index the dax is up almost. 75 . Take a look at the ftse mib. Up. 75 . Also taking a look at the ibex up over. 50 bbva moves higher as the takeover saga continues moving the spanish index up. 50 . Take a look at the sectors we mentioned iag travel and leisure getting a boost. You see we are seeing utilities as the leader up over 1. 5 right now. Oil and gas is getting a boost oil prices are higher on middle east tensions as well as stronger than expected chinese data you see over here with autos which are down. 25 . It is still a laggard today. It is weighed down by mercedesbenz. We see mercedesbenz shares continue to fall the ceo saying the fully electric transition will take longer than expected the previous target was 2030 autos is the laggard this morning. We moving on to u. S. Futures is a mostly positive day in the United States. The dow would open up 100 points higher lets stick with the u. S the weekly jobless claims with 2 231,000 americans filing for unemployment benefits. Continuing claims increased by 1. 78 million which supis up 17,0 from the previous week ma mary daly says it will take longer. It will come down sometimes and stubborn in the three months before we jump to the conclusion if we jumped to that same conclusion last year that everything was golden, you heard all of us, but me, which i said repeatedly, it is too early to declare victory. In the three months we have seen is why you dont declare victory before you get confident we are hearing from Goldman Sachs president and he is saying a soft landing is possible, but he is concerned about government spending. We are looking at a softlanding scenario. That doesnt mean everything is perfect and lands on a nice, soft pillow. I think that is what we are seeing right now i was taken by comments you made at the conference in april about the debt and the demand for treasury auctions and leverage in the treasury system and looking at the uk trust budget as a cautionary tale. Can you expand on that how much do you see rhyming in the u. S. What i was referring to is the stock of treasury in the marketplace which has grown consi considerably both parties are showing little discipline in the context of spending and fiscal stimulus fiscal stimulus was needed out of the pandemic, but we have gone too far we are the reserve currency , bu we should not abuse that privi privilege. It is risky. We have low unemployment and high fiscal spend. We need more stimulus and less running room you are reliant now with less buying of Foreign Government of Treasury Stock you are less reliant on households to fund we worry about whether u. S. Houses will buy and the price of demand to continue to buy. I wish the government on both sides of the aisle would pay more attention to that we are joined by the European Equity Market Strategist for morning star michael, good morning. Good morning. We heard about the soft landing in the United States a couple of weeks ago, people believed we were in a goldilocks scenario the european economy is in the goldilocks scenario right now. What sectors in europe see the biggest upside as we wait for the cuts and after the cuts . Does it change definitely if you look at the sectors that are offering value to investors, it is more of the defensive sectors. The likes of utilities, pharmaceuticals and healthcare and on the Consumer Staples and cyclical side offers a lot of value. If we see Interest Rate cuts, you should see that feed through to the economy and increased Consumer Spending and things like this. You would expect valuation to reverse if we see the Interest Rate decreases. You are bullish on utilities before a possible cut. One of the reasons according to the note is the dividend yield is there you also like consumer cyclicals. That is the most undervalued sector in europe that is a head scratcher for me. Isnt the consumer stretched and facing higher cost of living absolutely. Those high Interest Rates we have seen are still feeding through mortgage holders they are seeing the mortgage bills increase month on month as the rates come through you are right. Its a tough place to be as a consumer with not a lot of spare cash on discretionary items. That situation with the decrease in Interest Rates should start feeding through. The fact that information which we have come off 18month highs of inflation which is normalizing which should lead to lower prices in the supermarket. That should help the consumer. What areas of consumer cyclicals are you looking at here we see consumers more stretched with rates easing, they have to pick and choose where they spend that money. That is right i think if you look at company where is you see value at the moment, areyou are looking at nestle and abinbev and Home Builders as well which have been beaten up badly in the uk over the last six or nine months. They should see the large boost as Interest Rate decreases finally come through there specific names helps with the audience i want to ask you you are focused on valuation trading at a 5 premium according to your metrics. I look ed at your chart and it was january and february of 2022 that was before the big drop in the market are we in danger of the situation where history may repeat itself . I think that is always the d danger you should be aware of here and you dont want to be blaise here going into the ma markets. We s we saw it with the european gdp and those signals are weak, but positive and turning a corner. Investors will take optimism from that. You said valuation is over valued, but investors will look at the economic catalyst and be positive the stocks hitting fresh record highs i want to talk about the other side of the coin a lot of the thesis depends on the rate cuts coming from the ecb. We are seeing oil move a bit higher right now if we dont get rate cuts or if oil prices rise, does that change your thesis dramatically or sectors you see benefitting before the cut i think it is a matter of timing if the rate cuts get pushed out, like in the u. S. At the moment, investors are hopeful for rate cuts now and maybe it is closer to the end of the year or even 2025, that does cause dismay for investors and could lead to a selloff as you stated. The situation in europe is slightly different the Economic Situation is weaker rate cuts with the economists polls for june, it seems nailed on at this stage like you mentioned earlier, the bank of england and dovish comments yesterday are getting investors hopeful for rate cuts in the uk sooner if you are investor and looking to set up your portfolio with the idea these rate cuts are coming sooner rather than later, what is the data point they should focus on is it pmi or is it inflation it is a general picture of the overall economy. If you look at pmi and production data from the uk which is starting to look positive that goldilocks scenario is not too positive that puts policymakers off with the rates as has happened in the u. S the macro picture is important, but the bottomup picture is important. We mentioned 5 , but it is not offp putting for investors there is value in sectors. Even if the macro catalyst doesnt come through or comes through in the next month, the bottomup picture looks good for investors. Valuations in certain places still look attractive. Okay. Sounds similar to the u. S. Every data point seems to matter with that next cut michael, thank you very much our u. S. Coacolleagues will spe to Neel Kashkari and Austan Goolsbee today coming up on the show, spains economy minister criticizes bbvas hostile takeover bid for sabadell. Nvsal have more on that coertion coming up next on cnbc smarter at every stage of your business. Take full control of your brand with your own custom store. Scale faster with tools that let you manage every sale from every channel. And sell more with the best converting checkout on the planet. A lot more. Take your business to the next stage when you switch to shopify. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. When we started our business we were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of Online Sellers. Go to shipstation. Com tv and get 2 months free. Right now you can get a free footlong at subway. Just buy any footlong in the app and get one free. Just scan the qr code and Enter Promo Code flbogo it only works from the other side of the screen, buddy. You still got a land line in your house. Order now in the subway app. Welcome back to street signs. Sabadell says the bbva rules has produced incomplete information. This is the first hostile takeover bid since the 1980s and comes after the sabadell board said it under valued the prospects. Shareholders are interested in the offer. Our team has had contact with many of those shareholders and some of them have reached out to us with a clear expression of favorable views on the transaction. Again, they will have to make their decisions in due time. It will be in a few months when the acceptance tender happens. We have received interest and some shareholders are quite important at the table with the favorable opinion on the transaction. Speaking to cnbc earlier today, the spanish economic minister expressed concerns of the proposed merger. We feel the hostile bid is having an impact in terms of increased uncertainty and volatility in the market and secondary impacts of increased concentration in an already highly concentrated market with the detrimental effects with the consumer welfare and also having a step back in the financial agenda which is important in the rural areas and also a negative impact with the Financial Stability and mission of merger policy in spain. The third is the regional impact with the impact of sabadell concentrated in two regions in spain. Let me pick up on the instrument itself. You mentioned hostile. This is interesting. We had to go right back into history and bbva history it was one of the companies that launched a hostile bid back in the day. It is unusual. If this bid was not hostile and it was friendly, you would be more supportive . As i said, this is one additional concern for us because of the impact with the additional volatility and uncertainty. There are other important arguments in terms of the concentration that will limit competition in the market. Thats still there respective of the way this takeover would take place. We will talk more about the story with the head of financials for federated hermes. Great to have you here now your notes about this are fascinating. You say there is historical precedent for bbva and sabadell hostile takeover it is not in the spanish Banking Sector you are looking at this one . You have to explain. It will take six months and we would not know the result before the First Quarter of 2025 i think the different people which we heard from the spanish politician and they are talking on the political grounds with the action in catalonia and i understand his concern on the work force in catalonia with sabadell from the economic side, his argument is flawed in the sense that actually bbva and sabadell could increase the Financial Stability in spain bbva said clearly yesterday it is going to be a cost saving the fixed costs in the industry will increase in the south it makes sense to have this economy of scale one thing he said that was interesting as i listened to the interview earlier and one thing he talked about was the regional con scentration of sabadells business it may be destabilizing to the region which could have a domino effect he was speaking a second language which was impressive to begin with here. That was the scenario he was setting up do you feel these regions could spread to a wider crisis to be fair, i also doubt the posturing. I think it is the election result in catalonia and that is what he has to say a lot of politics. I doubt he will ever vote against because it comes six months after the ecb and the bank of spain give their response then the government will come last i doubt he will oppose the takeover you already touched on this, but i want to be clear, what do you believe about sabadells believe it under values their business and the stock moves are at issue for them. The deal may be a siege and take months it depends on the Stock Performance of bbva during that time it will i think sabadell management is correct in trying to extract a better concession from bbva. Ultimately, they wanted a cash component. Its at premium at the end of the day, sabadell shareholders inside just for a Corporate Governance perspective, they are trying to extract a bargain. That is the siege, if you want to say, it will drag on and get the most out of the bbva approach. One other question about the spanish banking regulator concerns it looks like 150 and 200 banks in spain does this takeover have ripple effects with the ability of creditor credit is there a Systemic Risk there larger banks can absorb larger fixed costs it can create a better system and better price in the risk credit if you say, you combine sabadell in spain with someone like bbva which is good in retail, you have a better balanced group the reason bbva wants sabadell badly is to refocus the group from the emerging market from mexico and turkey into spain spain, if you look at the economy, is predicted to grow more than the European Growth for the next two years they want to capitalize on this. Lets talk about the eurozone we heard from the ceo and he said the con the sol dags is li likely if the cuts go as expected in june with 75 basis points of cuts, does that make consolidation less likely or more likely . I think more likely i dont know how many cuts it is a fortune teller game. I think the next step is lower rates and then banks will have to resort more on known banking income with fees and management insurance. Not every bank can propose this second line of growth in earnings i think the focus will be on costs and since banking is a scale game, we will see more consolidation. Im sure we will have you back on to talk about this again. Comparing it to the siege of allesie. Thank you very much for coming in moving on, back to uk news the government has approved a merger of vodafone with threeuk it is facing a separate probe which opened an investigation foot deal last month British Airways owner with better First Quarter results silvia is here to breakdown the quarter. Thats right, frank we are seeing a positive comment from iag this morning. We can show you the shares and how they are trading so far. They popped 1. 2 in the open they eased slightly. At this stage, they are moving higher by 1 this is on the back of the latest results and comments from the ceo suggesting that there is high demand for travel and that is a continuing trend. To give you the outlook for the stock, the ceo said they are above 80 projected bookings for the Second Quarter and over 40 for the third quarter. The outlook here is quite positive that Strong Demand for travel is a trend. Let me share you the numbers the total revenue came in at 6. 4 billion euro that is an improvement compared to the First Quarter of 2023 also an improvement with operating profit where you were mentioning 68 million euro when it comes to that from 9 million at the start of 2023 there are a couple of areas under the spotlight for the company. We know they have a lot of Strong Performance with north atlantic and europe as regions however, there are signs of struggling with africa, middle east and south asia as well as asia pacific we will see if they manage to get more ground when it comes to these areas, but nonetheless, what we got today, frank, was indeed a positive comment from iag. Silvia, thank you very much coming up on the show, the bank of england keeps rates on hold with one more policymaker backing a cut. We will bring you our conversation with governor andrew blecongp teaiy mi uafr this break hi. Im Wolfgang Puck when i started my online store Wolfgang Puck home i knew there would be a lot of orders to fill and i wanted them to ship out fast thats why i chose Shipstation Shipstation helps manage orders reduce shipping costs and print out shipping labels its my secret ingredient shipstation the number 1 choice of Online Sellers and Wolfgang Puck go to shipstation. Com tv and get 2 months free we put our heart into celebrating moms. We are local farmers, bakers, florists and makers who grow and create with a passion. 1800 flowers. For mom, with love. Happy friday welcome to street signs. Im holFrank Holland. These are the headlines. The dow notches a second day of gains and jobless data. The uk emerging from recession with hotter than expected First Quarter numbers governor Andrew Bailey telling cnbc that decisions will not be influenced by politics. We can take the jobs with a longer term horizon and take them independently of any other cycle the thats going on around us iag beats estimates to post 70 million euro in the First Quarter profit as the Airline Group forecasts a busy summer season. Israeli Prime Minister Benjamin Netanyahu vows to stand alone and pushing back against the warning from President Biden not to invade rafah. Translator if we have to, we will fight with our fingernails. With gods help, we will win together welcome back to street signs. You see a mostly positive day on the markets. Stocks on a fiveday win streak. That streak may go up to six yesterday was a mixed start to the day and then the bank of england decision dovish tone from governor Andrew Bailey stocks looking like it is on a sixday win streak look at the boards the ftse 100 is at a record high up over. 50 same story when it comes to the dax. Seeing the dax up. 75 also, we are seeing the ftse 100 moving higher as Anglo American shareholders considering a renewed bhp bid. That is giving a boost to the ftse take a look at the ftse mib. One of the leaders moving higher following media bank results bbva is moving the spanish index higher as the takeover saga continues. Ibex 35 up over. 50 we want to look at other boards this morning excuse me. The uk economy ill come back to the uk the uk economy has left recession growing by 0. 6 in the first three months of the year that was ahead of the 0. 4 jeremy hunt told sky news that the uk has turned a corner the uk economy is growing faster over the last quarter, not just in france or germany or italy, but faster than the United States. I think whats more encouraging is the longerterm data we are now seeing about the economy since 2010, we created more jobs in the uk than any other country in europe. We attracted more greenfield Foreign Investment not just anywhere in europe, but anywhere in the world apart from the United States and china. We have a Huge Technology sector the imf says we will grow faster than any european economy. For families having a really tough time, this is an indication that difficult decisions that we have taken over recent years are beginning to payoff and we need to stick with them. Sticking with the uk, the bank of england held the rates with the Deputy Governor holding in for a 25basis point rate cut. Governor Andrew Bailey says the rate cut may need to be cut more in the coming quarters and describing june as neither ruled out or finished. Market rates on the wake of the decision is seeing a 40 chance of a rate cut in june and 50 basis points of easing in 2024 steve sat down with governor Andrew Bailey and asked him about the rate cut what those three things have in common is they underline the judgment of how persistent the inflation shock we have seen in recent times is going to be. The first is Services Inflation which is still at 6 on the latest numbers the private sector wages and the state of the quantity side of the labor market they are all good indicators of that we made an important change in the report we published that we have reduced what we think is the degree of persistence going forward. Inflation will come down a bit faster and more. Thats important now, to your question, what i want to see is the evidence now starting to pile up to back up that judgment. Thats what im looking for. Its slow progress. It is slow getting to target. Cpi and headline and core level is persistently and annoyingly high compared to what we like to see. I know you want to get cpi down to 2 in the Second Quarter. Will you have enough evidence for june to be in play let me say this, a year ago, exactly a year ago, we bitten our hands off together we were not that optimistic a year ago because we thought we have been through a difficult time and we were going to have more persistence and more embedded as we were raising Interest Rates at that time. It is important to have that in mind im not going to say it is not the way we will do it. We will not say it is this meeting or that meeting or the other meeting. Each meeting we come along and reassess the situation i think what we have to do and i hope we have given it which is a road map. The traditional theory goes, you solve inflation before you worry about recession. Are they worrying indicators that although recession has abated for now, that the consumer, the key part of the economy, your agents as we said on page 62, box e of the report, they are worried about what they are seeing on the consumer front. Actually, all of the evidence we have gotten has gone into formulating our view on the growth for the First Quarter that will come out tomorrow. It is a short time whohorizon on that one we are looking at a stronger growth picture i think the First Quarter has been encouraging in that sense. You are right to state that on that box this is why the agents are so valuable to us they have come to us and said, look, you just need to know our contacts are not as optimistic as the survey suggests we have to balance that off which we try to do and well see. We are now joined by the senior fixed Income Portfolio manager. We were talking about eating your hand. Interesting turn of phrase by governor Andrew Bailey i want your reaction to the comments was it more dovish than you expected bailey struck a dovish tone about cuts coming forward. We would agree. As we have been thinking about this, this has been the next step toward cutting rates for the uk it really started in march where you see the two hikers moving to hold and one member calling for a cut. Of course, this is just an extension of the path that the bank is traveling if you look at that voting record here. They move down to a cut. You have a 72 position. It was not widely expected in the market the market was torn between one cutter and the rest on hold and two cutters. It came as a bit of a surprise there was a change of an important sentence in the Monetary Policy statement as well it was important which was about the bank being more actively looking at data. In the press conference, it is where governor bailey laid down the law in what they are looking for here they are data dependent. They are looking at the incoming data they have two Market Reports one is next week and two inflation reports. The important thing here is the second round of the bank with the bank less worried about going forward. Now it is really going to be about Services Inflation if that comes down, we think the bank of england can move. Take a look right now the ftse 100 is at a record high we see the sterling make gains on the dollar with the dovish st tone talk about a great situation if you are a uk investor. Where do you see opportunities in the uk . A lot of people believe it is under valued if your thesis hinges on a cut, you mentioned the inflation report, what do you see to say it is time to go allin on the uk that is an important point if you take a step back the swedish bank cut rates they cut 25. They did note they were worried about the weakness of the Swedish Krona and the u. S. Dollar if you look at the feds reaction last week, you mentioned goldilocks it is clear that Central Banks are more cognizant of growth than what markets expected that may very well translate into more of a goldilocks scenario we are not out of the woods yet. We have a u. S. Cpi print next week this is important for Market Participants it could be the last hot print it seems we will have a pare back of shelter and Core Services in terms of the u. S. , what we like is the short end of the yield curve. Globally . The yields are elevated on the short end of the curve in the United States and europe and asia. Absolutely. Absolutely i think we prefer as an inn institution europe and japan as we discussed before we went live, the bank of japan is hawkish which stands in contrast than the press conference that sounded dovish the minutes came out and they said they will review the yield curve control and hiking rates early. We set japan aside it is a different cycle in japan over what we are seeing in the developed markets. At the end of may and if they intervened with the yen. Almost as if on cue, we are seeing middle east tension flaring up israel pushing back against the United States. The ecb said oil prices are a factor in the decision does the bank of england weigh oil in the same way . Do you compare to the ecb . The ecb is a little more cognizant on Energy Prices with the euro being reasonably weaker based on what the ecb has been saying overall, they should judge that. The key is the domestic economy. In europe, the inflation pressure has largely been the increase in Energy Prices. In the u. S. , it has been pure demand thats why Market Participants are pricing in european Central Banks to cut rates before the fed. The strength of the u. S. Economy and you can argue how strong it is given with the claims yesterday and pmi being softer nevertheless, it will be an important variable it is hard to tell compared to the boe and ecb what matters more with oil prices it is important to be cognizant. If you look at gas price notice u the u. S. Thank you for joining us here by the way, you can see the rest of steves interview on cnbc. Com a lot of Great Questions by steve and colorful language. Eating your own hand coming up on the show, chinese ev maker zeekr super charges the u. S. Ipo we will have details coming up next raising you was no bed of roses. Are you getting me anything for mothers day . Go to 1800flowers. Com. Oh my gosh wow gorgeous i feel like royalty. Thank you. 1800flowers. Com. Happy mothers day. Happy mothers day ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. Switch to shopify and sell smarter at every stage of your business. Take full control of your brand with your own custom store. Scale faster with tools that let you manage every sale from every channel. And sell more with the best converting checkout on the planet. A lot more. Take your business to the next stage when you switch to shopify. We put our heart into celebrating moms. We are local farmers, bakers, florists and makers who grow and create with a passion. 1800 flowers. For mom, with love. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Welcome back to street signs. Apple is apologizing after the ad received backlash of cultural insensitivity. The ad shows Musical Instruments and games crushed by the hydrolic press however, social media users responded by accusing the tech giant crushing human achievements apple said it missed the mark and will pull the ad we asked the capital founder about his thoughts on the ad that ad is trying to underline and this is true with the technology upending the five areas were seeing a. I. Impact business or potentially impact our business there is no doubt it will have a Significant Impact in each of those areas i mentioned with positives and some negative impacts. A. I. Offers a lot of interesting opportunities whether employment will be at higher levels in the future as they have been in the past in some of the segments i covered means we will have to see. I think the implication that technology is revolutionizing the way, for example, the way we produce advertising and distribute the data we use and the technology we use means there is a revolution that were in the process of seeing and that ad is aimed at trying to emphasize that it is obviously controversial because of the impact on employment moving on to the european elections being less than a month away some have started negotiations on who will fill the top unelected rolls at the parliament and council silvia joins us with a preview thats right. We are gearing up for the big vote across 27 members of the eu having spoken with officials in brussels, it seems we are on track to see the president of the European Commission seems to stay we will see who will get the European Council that brings together heads of state across the eu and because the poll suggests the socialist party is likely the second biggest force in european parliament, the expectation is we will see a socialist member taking over the council. Two names are the former portuguese Prime Minister and former danish Prime Minister lets see what will happen there are a lot of changes that could take place between now and the european elections ultimately, the outcome of the vote will be critical to understand the division of roles. We need to understand the eu for the next five years. Frank, the expectation is we will see a more focused eu on defense and derisking from china and to some extent from the United States as well. All eyes on that election in the United States to understand the relationship with the eu and the u. S. A connection there. Thats interesting i want to ask what do you expect and what is the most likely outcome . I heard stevie saying Different Countries have problems. Send them to brussels. What are you expecting it seems we are going to see more members of the far right at the european parliament. We have to wait for the vote to understand what share they will actually have in the chamber to understand the weight they might have on european politics. That is the main trend as we approach these votes lets see what will end up happening and how that might impact upcoming policy making. Frank, very interesting times. So many interesting things going on elections where you will spend time in brussels silvia, thank you. Moving on to european politics chinese president xi jinping hailed hungary as an important Strategic Partner on thursday as he continued the trip to europe. Speaking to the hungarian press, xi said they upgraded their relationship with a Strategic Partnership for the new era. The Biden Administration is set to announce tariffs on china next week after 37 chinese entities to the restrictions list this includes the Technology Group which is a critical supplier to the military the Commerce Department tried to accuse them of taking American Technology for their Technology Sector Benjamin Netanyahu has viewview vowed to press ahead on rafah after the u. S. Announced it would stop sending weapons to the country if it moves ahead. This is after the National Security minister tweeted hamas hearts biden we have brie jackson with more on this story. Good morning, brie reporter good morning, frank. President bidens threat to stop sending weapons to israel is met with a range of reactions. One calling it a disappointing decision the Biden Administration is standing by the president s warning that the u. S. Would halt weapons to the Israeli Military if it moves forward with the fullscale assault on rafah. The president has stopped some shipments already. Some are blasting President Bidens decision to suspend arms deliveries to the close ally other lawmakers support the president out of concern for the more than 1 million palestinians sheltering there in rafah. Divisionsover the u. S. Respons to the israelhamas war are expected to play a key role with the president ial election decisions this november. This is a key issue for the Reelection Campaign for biden this could tip the scales for trump in battleground states in michigan, arizona and pennsylvania frank. A developing story, certainly. I have seen reports that the Israeli Military says they have enough weapons to carry out the offensive in rafah longer term, what does this mean where the u. S. Has held shipments to israel . Reporter we have seen this in the past. We saw this with the Reagan Administration which did this out of concerns over what was happening with the weapons there. We are learning more about the information about the Biden Administration is considering moving forward they say this is hinging upon if israel moves forward with the fullscale assault on rafah which President Biden has spoken out against saying he does not want it remains to be seen how israel moves forward and the Biden Administration will base its decision on that brie jackson live in washington, d. C. Thank you. Turn attention to the u. S. Markets. Zeekr has priced the u. S. Ipo at 21 a share according to multiple reports the listing which is said to be several times over subscribed values the geely backed open at 5 billion emily tan filed this report. Reporter zeekr will debut on friday under the ticker zk this is thing biggest ipo since 2021 in the u. S. This is at the top of the listing at 21 and raising 441 the million in the process in the upsized ipo. Zeekr saw Strong Demand and closed the books a day early this comes as the industry faced competition with the price war and the risk of china tariffs. Geely automobile is the Parent Company in the listing buying in 349 million in stock. Zeekr is a threeyear old start up and in the first four months, out performing xpeng and ni. Im emily tan. Back to you. The ceo of zeekr will come your way at 4 30 cet we will hear from daniel li at 16 30 cet. Over to the gaming sector. Roblox shares slumped in the last two years as concerns grow over a continued slump in the video game industry. The Gaming Platform expects bookings to be between 4 billion and 4. 1 panhbillion. Dropbox posted a beat on the top and bottom line with the revenue at 631 million. The Cloud Storage business reported adjusted earnings per share which beat ce50 cents a share. Markets are higher for the day. Green across the boards. Take a look at the ftse 100 and ftse mib the swiss index is the leader. Dax is hitting a new report high a strong day across europe u. S. Futures are also higher thats it for todays show im Frank Holland. Worldwide exchange is coming up next. It is 5 00 a. M. Here at cnbc Global Headquarters and 10 00 a. M. In london im Frank Holland and here is your five 5. Riding a win streak. Stocks looking to close out the best week since march as bad news is good news for stocks what one fed president is saying today that could dash some hopes of a sooner than expected cut from powell and the fed. Bounceback in china Goldman Sachs out with the bullish view as citi and Morgan Stanley say not so fast. A correction apple is