Transcripts For CNBC Street 20240703 : comparemela.com

And in the luxury share, shells in bur berry sell off like theyre going out of fashion. They post a 34 drop in quarterly profits, the ceo warning of weak demand in key markets. And mixed fortunes for europes lenders as they post a 6 share but the bank posts a drop. President trump hitting china with new tariffs. The white house is sending a clear message to beijing. The message to them from us would be the same message they would give us, which is were going to protect our workers, and were going to protect our sectors of the economy that are being attacked basically by the prc. Welcome to this edition of street signs. Speaking about growth demand for this year then, theyre forecasting there will be growth, but thats about 140,000 barrels a day to around 1. 1 Million Barrels a day according to their monthly report. Theyre saying theyre referring to its lower 2024 growth demand for the whole year. They say weak deliveries notably in europe shifted their First Quarter demand into contraction. The iea also says Global Oil Demand is growing by 1. 2 Million Barrels a day next year. Thats just slightly higher than from the previous forecast they had in place the previous month, the iea saying the oil supply will increase by 580 billion barrels or 580 thousand, i should say, my apologies, 580,000 to record 172 Million Barrels per day. The iea is saying even if opec voluntarily cuts production, the Global Oil Supply could jump by 1. 8 Million Barrels per day in 2025. Thats compared to 580,000 Barrels Per Day increasing in 2024. Oil markets looking more balanced overall particularly then as we head to 2025. Of course, we have seen this oil price pretty much remain somewhat in range there between 80 and 90 a barrel and thats where youre seeing it in play, the consistency having hit that 90 a barrel not so long ago. Overall whats this market looking like . There are really significant gains we have seen out of the european stockmarket. We saw the dow jones go up eight days in a row. Now youre seeing eight days in a row for even the stoxx 600, managing to move well in this mornings trade, up 123 points. A significant uptick across the board. But the direction, where does that come from . Of course, yesterdays ppi numbers coming in a little bit hotter than expected. But it was the revision as well that was expected. That dropped off from a negative 0. 1 to negative 0. 2. What does that Service Level actually mean for the overall picture . Well unpack that as well in a bit as we get into the risk of the european markets. We had seen the ftse 100 continue its trajectory higher. Is 8,500 going to be hitting today . Half a per selkt higher so far. The lack of burberry getting into the mix. The ftse 100 as well. The miners have been at play. What happens with the overall context of completely restructuring for Anglo American . What does that mean . Some of those luxury players may be getting hampered down by what you saw out of burberrys numbers. Its not looking too good. Well get into that detail in just a bit. The dax out of germany up a third of a percent. Again, the earnings picture still in play. The commerzbank beingone well look at as well. Well get into those perhaps a little later on in theshow. Generally positivity is what well see. Onto the flat line sectors, this will give a sense of things moving along. Construction materials, flat. Household goods down and retail taking a hit. Autos flatlining. Real estate managing to move higher, 1. 2 . Big question. Were still asking in and around that Interest Rate. The likes of anglo will be the ones well be looking at overall for that. Burberry has warned of challenging times ahead. This will come straight after the firm reported today a 34 drop in full year operating profit. The british retailer expects wholesale revenue to fall 25 in the first half of this year as increased distribution costs hit the business. That stock now down 2. 7 so far. As you can tell, it has had a torrid year or so at the very least then. This is not just a 12month story of a 54 decline. It really has been a significant decline over a long period of time. In fact, yesterday, we spoke about the luxury sector with the ceo. He said its not a long play in europe. Listen to his words. What were going to see is europe does well sans luxury. Thats been the real winner. I think the one thing were going to see is not everyone has to go out and be a showme person, and i say that because i come from you know, im considered a wealthy person, and i watch that around me. The question is theyre reaching so far down into average people. When we finally do get a deep recession or traditional recession, where will those buyers go for the stocks . Charlotte is joining us to unpack the conversation a little more. Just yesterday saying everything is going to go up except luxury. Ty think thats the case now. Burberry is certainly getting hit with the numbers. Certainly what were seeing with the slowdown of burberry you have the winners and the losers. They just dont go and buy anymore. Its been difficult for burberry. Theyve been trying to turn around. Of course, its even tougher when demand is softening at the moment. The profit warning they have a lowered guidance at the lower end of that guidance, 480 million pounds. Operating profits are down 34 . And they expect the first half of this year to remain challenging, but they hope that in the second half they start to see some of the work they have done to have the stock bear fruit. The whole sale revenue would be down 25 in the first half. They really worked on the distribution. They had an oversale. They tried to control the distribution better. They control as well some of the pricing and they try to elevate the brand through the distribution as well. Theyre working very hard on this. In q4, we see asiapacific down 17 . We know theres a demand. Americas was also down 12 . The ceo speaking on the color of europe saying the uk and the home market significantly underperforming the sales in the rest of the country. In paris and milan, theyre doing much better than london. Thats interesting there. They say they havent recovered with their retail sales since the pandemic. You can see theyre working hard, but its difficult. They presented their first collection last year. They started hitting the stores only in september. That might be just the very beginning of seeing the effect of this new elevated product heating the stores and whether they ignite a bit of demand there. Its been wide for burberry. The soft demand in luxury overall, again, dividing some of the winners and some of the losers. Big luxury groups that have difficult brands, they try. Of course, this is a sole brand and it can be a bit difficult. What do you do when you have in common this struggle with another, and that is gucci. You have something new in play that hopefully fixes them. Is that what burberry is saying . The way your designs look, theyre old, not up to scratch, not fulfilling the fan shuscon sues consumer at this stage . Yes and no. Gucci, theyve been extremely, extremely desirent a few years ago. There was a bit of a fatigue. Now they try to give a different look and feel to the brand. Hes presenting his new collection rs his one coming up days ag, coming back to the roots of where gucci started. Theyre giving the benefit of the doubt when it comes to gucci. Theyre looking at their elevation. The bags are starting to get good reception. Theyre trying to trigger putting advancements there. At burberry, the ushs have been going on for a long time. They kind of lowered the visibility of the brand. They had a bit of a revival at the end of the year. They came back in fashion but started to fizzle out. Theyre trying that again. They put it on the map. They hope to see if effect in burberry, but it hasnt happened not yet. It may not be clothing, but we have luxury numbers coming out on friday. Well see how that one fairs. To your note, there are winners and losers. Lvmh, up 80 since 2020. Hermes, up 200 since 2020. Kering down,6 . Burberry, down 50 . All of those since 2020 have had significant hits. To your point, there are winners and losers in this space. Its just not everyone going higher. Charlotte, ees go to commerzba. The firm raised its outlook for the year. On the other side, dutch abn a. M. Raised theirs up 4. 97 . If you look at the risk costs, they were only 3 million. Its continuing. If you look at the rates, 1. 9d , its still close to historic lows and with the economic side, theyre still quite positive. So with the economic backdrop we see a benign environment. And also if you look at the pipeline, for example, for corporate lebnding, its really being supported by a strong company. The stocks banking index hitting a high for the first time in nine years. The bond has also attracted short sellers. Im convinced the rebound will last. Others are getting hit with the short sellers a as well. David pierce, director for Strategic Initiatives joining us now. David, before we get into a lot more of what you put out in your notes, i want to talk about the u. S. Banks versus european banks and your sense on which ones are standing out for you right now in what is clearly a difficult market where Net Interest Income is perhaps getting a little bit of a hit as well, some fatigue coming into play too. Is that the sense youre getting . Yeah, but i think that the european banks in general get more out of this Interest Rate rise than the u. S. Bank. The u. S. Banks tend to have longer mortgages on their books, and so theyre locked into a lot longer term with the lower Interest Rates. So i think the european baenks, the way they structure mortgages, seems to be much more favorable for them than the u. S. Banks right now. I think the u. S. Banks are lagging compared to whats going on in europe. Its just a fairly interesting one to kind of look at as well, especially in this market. High Interest Rate environmental as well. One would think that with rates still remaining this high, you would still get them continuing to hit higher. But i can see the change youre thinking about. If we move overall to this market as well and this consumer demand then, that kept on staying sticky as well. How much does Government Spending have to play. This is a conversation ive had as well recently. The government is spending a lot more on the United States. Thats surely holding up inflation. It really is. And it takes it takes a lot of different forms. You know, we had a lot of government incentives. Theres been a lot of government money going into the economy. And that just kind of churns, you know. We pay them, they pay us. So theres a lot of, still, incentives going on for, you know, green energy, green vehicles, things like that. You know, we were having this conversation earlier today that really this all started back during covid, you know. Covid is really what put the brakes on the economy, and the government started pumping money into the economy, giving people incentives. Thats really what started this whole inflation run that we have had over the last few years. So thats a big thing. And then youve got in addition to that this is kind of ined a very tendly, but if you think about all of the lets just take ukraine, for instance. Were sending a lot of military infrastructure to yukraine, sending lots of money to ukraine. That means the People Manufacturing those kinds of products are getting more business, and its driving more business there, so their employees have got more money, theyre driving more money into the economy. I agree with you. Its really something that the governments say they want to slow this thing down and then they pump incentive money back into the economy, and its kind of a catch22 situation. It certainly feels that way. Would a stick inflation surprise you given the strength of the u. S. Economy and what we just made note of with regard to spending or did the gdp numbers as well as the jobs report, which was weaker than the market anticipated, is that beginning to show cracks in these numbers . It is really transitory because you have got so many things that are still really strong with the world economy. And then theres things that are areas that are struggling. You know, i was just in japan a couple of weeks ago, and everything in japan feels really, really down. It does not feel vibrant. It does not feel exciting. It does not feel like theres a lot of confidence in their economy. From there i went to korea. Korea is just on fire and everything was vibrant and exciting. Then i went to sydney. It was the same thing there. I go to london, and everything is being built, and the same thing is happening here in the u. S. I feel a lot of vibrancy. When i go to mainland europe, it doesnt feel nearly as vibrant. So i think that theres still a long ways to go. I think weve got a ways go before we start seeing these rate cuts. Im thinking november, december before we start seeing a rate cut. And chairman powell, hes pretty conservative, and he does not like to try to be ahead of the market he really reacts to the market. And so when hes saying that theres no real rate cuts in sight, i dont believe that there really is. Certainly an interesting one. Markets higher state site, hitting records again. The nasdaq, were seeing that come to fruition. But it doesnt feel like theres many major catalysts for the moves were seeing right now. Without a move lower in Interest Rates, does that bull trade continue then as well because theres nothing that will drive it forward, it seems. Well, if you look at the u. S. Lets look at the u. S. Consumer. They are really still very, very bullish. If you still go to car dealerships, theyre having a hard time keeping inventories in. There is a huge demand for still buying products. Even though Interest Rates are higher, people are still buying houses. I was talking to a friend last night. Their daughter sold their house about a year and a half ago because they knew the housing prices were going to crash because Interest Rates are going up. Guess what . Housing prices didnt crash, and theyre still going up even though Interest Rates are going up. So it is a crazy thing to think weve had so much interest increase and people are still consuming. It has not really made a huge impact. I think it has slowed the growth down, but it has not really turned us into a negative growth situation. You know theres still so much demand, and i think theres still going to be a lot of demand. David, i just hope youre not still on, you know, japanese or korean time right now because it is 2 00 a. M. Where you are. Yeah, it is. We appreciate you coming on this early as well for our show. Thank you so much for joining us. David pierce, ill talk to you again. Director for Strategic Initiatives at gps capital markets. Coming up on the show, the u. S. Ambassador to the eu discusses whether the european bloc could follow suit. Well bring you that interview after the short break. Shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and its ready to go our cost for shipping, were cut in half just like that go to shipstation tv and get 2 months free what is cirkul . Cirkul is what you hope for when life tosses lemons your way. Cirkul is your frosted treat with a sweet kick of confidence. Cirkul is the Effortless Energy that gets you in the zone. Cirkul, available at walmart and drinkcirkul. Com. Norman, bad news. I never graduated from med school. What . But the good news is. Xfinity mobile just got even better now, you can automatically connect to wifi speeds up to a gig on the go. Plus, buy one unlimited line and get one free for a year. I gotta get this deal. Thats like 20 a month per unlimited line. I dont want to miss that. Thats amazing doc. Mobile savings are calling. Visit xfinitymobile. Com to learn more. Doc . This homestyle Chicken Salad wrap from subway this is how you do it. Savory chicken, crisp veggies all wrapped up these wraps are amazing. People can hear my thoughts . Thats a problem. Stay fresh out there welcome back. The u. S. Hikes tariffs on chinese items including evs, chips, batteries, and metals. It will quadruple over 100 . Our semiconductor duties are set to increase by half. The u. S. Ambassador to the eu struck in a harsh tone, speesking exclusively to cnbc. He said talks are ongoing amid further action. Sylvia joining us with more from brussels. That hawkish tone, sylvia, is one that china has consistently said were still trying to make sure were open to all the markets in the world, to try to be as fair as possible, and the u. S. Saying, well, we dont think you are. Reporter so a surprise was not really a surprise. We knew they were working on this. We know President Biden has been very vocal about the need to have further economic security, and really to detach their economy to some extejts from china, the key here is the tariffs is chinese evs from the u. S. Is actually not too significant on chinese ev makers because they dont have a huge part of the u. S. Market. However, that story could be different if the eu goes ahead with tariffs also on chinese evs because there is a third of the chinese exports of evs that come to the eu. So they have a bigger chunk of the market here. Now, we know that the European Commission has been looking at subsidies from chinese authorities to ev makers there, considering whether or not they were unfair to the rest of the market, and that investigation is likely to conclude this summer. So theres quite a lot of conversations in brussels about potentially seeing the eu impose tariffs on the chinese evs. When i had a chance to speak to the ambassador to the eu, he said there is a common vision between the u. S. And the deal. Lets listen. Ive sat through two summits now between the eu and the United States. None of this will come as a surprise to either side, especially to the president s because theyve talked extensively about the problem of overcapacity in the peoples republic of china and how its distorting our markets in the Million Barrels<\/a> a day according to their monthly report. Theyre saying theyre referring to its lower 2024 growth demand for the whole year. They say weak deliveries notably in europe shifted their First Quarter<\/a> demand into contraction. The iea also says Global Oil Demand<\/a> is growing by 1. 2 Million Barrels<\/a> a day next year. Thats just slightly higher than from the previous forecast they had in place the previous month, the iea saying the oil supply will increase by 580 billion barrels or 580 thousand, i should say, my apologies, 580,000 to record 172 Million Barrels<\/a> per day. The iea is saying even if opec voluntarily cuts production, the Global Oil Supply<\/a> could jump by 1. 8 Million Barrels<\/a> per day in 2025. Thats compared to 580,000 Barrels Per Day<\/a> increasing in 2024. Oil markets looking more balanced overall particularly then as we head to 2025. Of course, we have seen this oil price pretty much remain somewhat in range there between 80 and 90 a barrel and thats where youre seeing it in play, the consistency having hit that 90 a barrel not so long ago. Overall whats this market looking like . There are really significant gains we have seen out of the european stockmarket. We saw the dow jones go up eight days in a row. Now youre seeing eight days in a row for even the stoxx 600, managing to move well in this mornings trade, up 123 points. A significant uptick across the board. But the direction, where does that come from . Of course, yesterdays ppi numbers coming in a little bit hotter than expected. But it was the revision as well that was expected. That dropped off from a negative 0. 1 to negative 0. 2. What does that Service Level<\/a> actually mean for the overall picture . Well unpack that as well in a bit as we get into the risk of the european markets. We had seen the ftse 100 continue its trajectory higher. Is 8,500 going to be hitting today . Half a per selkt higher so far. The lack of burberry getting into the mix. The ftse 100 as well. The miners have been at play. What happens with the overall context of completely restructuring for Anglo American<\/a> . What does that mean . Some of those luxury players may be getting hampered down by what you saw out of burberrys numbers. Its not looking too good. Well get into that detail in just a bit. The dax out of germany up a third of a percent. Again, the earnings picture still in play. The commerzbank beingone well look at as well. Well get into those perhaps a little later on in theshow. Generally positivity is what well see. Onto the flat line sectors, this will give a sense of things moving along. Construction materials, flat. Household goods down and retail taking a hit. Autos flatlining. Real estate managing to move higher, 1. 2 . Big question. Were still asking in and around that Interest Rate<\/a>. The likes of anglo will be the ones well be looking at overall for that. Burberry has warned of challenging times ahead. This will come straight after the firm reported today a 34 drop in full year operating profit. The british retailer expects wholesale revenue to fall 25 in the first half of this year as increased distribution costs hit the business. That stock now down 2. 7 so far. As you can tell, it has had a torrid year or so at the very least then. This is not just a 12month story of a 54 decline. It really has been a significant decline over a long period of time. In fact, yesterday, we spoke about the luxury sector with the ceo. He said its not a long play in europe. Listen to his words. What were going to see is europe does well sans luxury. Thats been the real winner. I think the one thing were going to see is not everyone has to go out and be a showme person, and i say that because i come from you know, im considered a wealthy person, and i watch that around me. The question is theyre reaching so far down into average people. When we finally do get a deep recession or traditional recession, where will those buyers go for the stocks . Charlotte is joining us to unpack the conversation a little more. Just yesterday saying everything is going to go up except luxury. Ty think thats the case now. Burberry is certainly getting hit with the numbers. Certainly what were seeing with the slowdown of burberry you have the winners and the losers. They just dont go and buy anymore. Its been difficult for burberry. Theyve been trying to turn around. Of course, its even tougher when demand is softening at the moment. The profit warning they have a lowered guidance at the lower end of that guidance, 480 million pounds. Operating profits are down 34 . And they expect the first half of this year to remain challenging, but they hope that in the second half they start to see some of the work they have done to have the stock bear fruit. The whole sale revenue would be down 25 in the first half. They really worked on the distribution. They had an oversale. They tried to control the distribution better. They control as well some of the pricing and they try to elevate the brand through the distribution as well. Theyre working very hard on this. In q4, we see asiapacific down 17 . We know theres a demand. Americas was also down 12 . The ceo speaking on the color of europe saying the uk and the home market significantly underperforming the sales in the rest of the country. In paris and milan, theyre doing much better than london. Thats interesting there. They say they havent recovered with their retail sales since the pandemic. You can see theyre working hard, but its difficult. They presented their first collection last year. They started hitting the stores only in september. That might be just the very beginning of seeing the effect of this new elevated product heating the stores and whether they ignite a bit of demand there. Its been wide for burberry. The soft demand in luxury overall, again, dividing some of the winners and some of the losers. Big luxury groups that have difficult brands, they try. Of course, this is a sole brand and it can be a bit difficult. What do you do when you have in common this struggle with another, and that is gucci. You have something new in play that hopefully fixes them. Is that what burberry is saying . The way your designs look, theyre old, not up to scratch, not fulfilling the fan shuscon sues consumer at this stage . Yes and no. Gucci, theyve been extremely, extremely desirent a few years ago. There was a bit of a fatigue. Now they try to give a different look and feel to the brand. Hes presenting his new collection rs his one coming up days ag, coming back to the roots of where gucci started. Theyre giving the benefit of the doubt when it comes to gucci. Theyre looking at their elevation. The bags are starting to get good reception. Theyre trying to trigger putting advancements there. At burberry, the ushs have been going on for a long time. They kind of lowered the visibility of the brand. They had a bit of a revival at the end of the year. They came back in fashion but started to fizzle out. Theyre trying that again. They put it on the map. They hope to see if effect in burberry, but it hasnt happened not yet. It may not be clothing, but we have luxury numbers coming out on friday. Well see how that one fairs. To your note, there are winners and losers. Lvmh, up 80 since 2020. Hermes, up 200 since 2020. Kering down,6 . Burberry, down 50 . All of those since 2020 have had significant hits. To your point, there are winners and losers in this space. Its just not everyone going higher. Charlotte, ees go to commerzba. The firm raised its outlook for the year. On the other side, dutch abn a. M. Raised theirs up 4. 97 . If you look at the risk costs, they were only 3 million. Its continuing. If you look at the rates, 1. 9d , its still close to historic lows and with the economic side, theyre still quite positive. So with the economic backdrop we see a benign environment. And also if you look at the pipeline, for example, for corporate lebnding, its really being supported by a strong company. The stocks banking index hitting a high for the first time in nine years. The bond has also attracted short sellers. Im convinced the rebound will last. Others are getting hit with the short sellers a as well. David pierce, director for Strategic Initiatives<\/a> joining us now. David, before we get into a lot more of what you put out in your notes, i want to talk about the u. S. Banks versus european banks and your sense on which ones are standing out for you right now in what is clearly a difficult market where Net Interest Income<\/a> is perhaps getting a little bit of a hit as well, some fatigue coming into play too. Is that the sense youre getting . Yeah, but i think that the european banks in general get more out of this Interest Rate<\/a> rise than the u. S. Bank. The u. S. Banks tend to have longer mortgages on their books, and so theyre locked into a lot longer term with the lower Interest Rate<\/a>s. So i think the european baenks, the way they structure mortgages, seems to be much more favorable for them than the u. S. Banks right now. I think the u. S. Banks are lagging compared to whats going on in europe. Its just a fairly interesting one to kind of look at as well, especially in this market. High Interest Rate<\/a> environmental as well. One would think that with rates still remaining this high, you would still get them continuing to hit higher. But i can see the change youre thinking about. If we move overall to this market as well and this consumer demand then, that kept on staying sticky as well. How much does Government Spending<\/a> have to play. This is a conversation ive had as well recently. The government is spending a lot more on the United States<\/a>. Thats surely holding up inflation. It really is. And it takes it takes a lot of different forms. You know, we had a lot of government incentives. Theres been a lot of government money going into the economy. And that just kind of churns, you know. We pay them, they pay us. So theres a lot of, still, incentives going on for, you know, green energy, green vehicles, things like that. You know, we were having this conversation earlier today that really this all started back during covid, you know. Covid is really what put the brakes on the economy, and the government started pumping money into the economy, giving people incentives. Thats really what started this whole inflation run that we have had over the last few years. So thats a big thing. And then youve got in addition to that this is kind of ined a very tendly, but if you think about all of the lets just take ukraine, for instance. Were sending a lot of military infrastructure to yukraine, sending lots of money to ukraine. That means the People Manufacturing<\/a> those kinds of products are getting more business, and its driving more business there, so their employees have got more money, theyre driving more money into the economy. I agree with you. Its really something that the governments say they want to slow this thing down and then they pump incentive money back into the economy, and its kind of a catch22 situation. It certainly feels that way. Would a stick inflation surprise you given the strength of the u. S. Economy and what we just made note of with regard to spending or did the gdp numbers as well as the jobs report, which was weaker than the market anticipated, is that beginning to show cracks in these numbers . It is really transitory because you have got so many things that are still really strong with the world economy. And then theres things that are areas that are struggling. You know, i was just in japan a couple of weeks ago, and everything in japan feels really, really down. It does not feel vibrant. It does not feel exciting. It does not feel like theres a lot of confidence in their economy. From there i went to korea. Korea is just on fire and everything was vibrant and exciting. Then i went to sydney. It was the same thing there. I go to london, and everything is being built, and the same thing is happening here in the u. S. I feel a lot of vibrancy. When i go to mainland europe, it doesnt feel nearly as vibrant. So i think that theres still a long ways to go. I think weve got a ways go before we start seeing these rate cuts. Im thinking november, december before we start seeing a rate cut. And chairman powell, hes pretty conservative, and he does not like to try to be ahead of the market he really reacts to the market. And so when hes saying that theres no real rate cuts in sight, i dont believe that there really is. Certainly an interesting one. Markets higher state site, hitting records again. The nasdaq, were seeing that come to fruition. But it doesnt feel like theres many major catalysts for the moves were seeing right now. Without a move lower in Interest Rate<\/a>s, does that bull trade continue then as well because theres nothing that will drive it forward, it seems. Well, if you look at the u. S. Lets look at the u. S. Consumer. They are really still very, very bullish. If you still go to car dealerships, theyre having a hard time keeping inventories in. There is a huge demand for still buying products. Even though Interest Rate<\/a>s are higher, people are still buying houses. I was talking to a friend last night. Their daughter sold their house about a year and a half ago because they knew the housing prices were going to crash because Interest Rate<\/a>s are going up. Guess what . Housing prices didnt crash, and theyre still going up even though Interest Rate<\/a>s are going up. So it is a crazy thing to think weve had so much interest increase and people are still consuming. It has not really made a huge impact. I think it has slowed the growth down, but it has not really turned us into a negative growth situation. You know theres still so much demand, and i think theres still going to be a lot of demand. David, i just hope youre not still on, you know, japanese or korean time right now because it is 2 00 a. M. Where you are. Yeah, it is. We appreciate you coming on this early as well for our show. Thank you so much for joining us. David pierce, ill talk to you again. Director for Strategic Initiatives<\/a> at gps capital markets. Coming up on the show, the u. S. Ambassador to the eu discusses whether the european bloc could follow suit. Well bring you that interview after the short break. Shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and its ready to go our cost for shipping, were cut in half just like that go to shipstation tv and get 2 months free what is cirkul . Cirkul is what you hope for when life tosses lemons your way. Cirkul is your frosted treat with a sweet kick of confidence. Cirkul is the Effortless Energy<\/a> that gets you in the zone. Cirkul, available at walmart and drinkcirkul. Com. Norman, bad news. I never graduated from med school. What . But the good news is. Xfinity mobile just got even better now, you can automatically connect to wifi speeds up to a gig on the go. Plus, buy one unlimited line and get one free for a year. I gotta get this deal. Thats like 20 a month per unlimited line. I dont want to miss that. Thats amazing doc. Mobile savings are calling. Visit xfinitymobile. Com to learn more. Doc . This homestyle Chicken Salad<\/a> wrap from subway this is how you do it. Savory chicken, crisp veggies all wrapped up these wraps are amazing. People can hear my thoughts . Thats a problem. Stay fresh out there welcome back. The u. S. Hikes tariffs on chinese items including evs, chips, batteries, and metals. It will quadruple over 100 . Our semiconductor duties are set to increase by half. The u. S. Ambassador to the eu struck in a harsh tone, speesking exclusively to cnbc. He said talks are ongoing amid further action. Sylvia joining us with more from brussels. That hawkish tone, sylvia, is one that china has consistently said were still trying to make sure were open to all the markets in the world, to try to be as fair as possible, and the u. S. Saying, well, we dont think you are. Reporter so a surprise was not really a surprise. We knew they were working on this. We know President Biden<\/a> has been very vocal about the need to have further economic security, and really to detach their economy to some extejts from china, the key here is the tariffs is chinese evs from the u. S. Is actually not too significant on chinese ev makers because they dont have a huge part of the u. S. Market. However, that story could be different if the eu goes ahead with tariffs also on chinese evs because there is a third of the chinese exports of evs that come to the eu. So they have a bigger chunk of the market here. Now, we know that the European Commission<\/a> has been looking at subsidies from chinese authorities to ev makers there, considering whether or not they were unfair to the rest of the market, and that investigation is likely to conclude this summer. So theres quite a lot of conversations in brussels about potentially seeing the eu impose tariffs on the chinese evs. When i had a chance to speak to the ambassador to the eu, he said there is a common vision between the u. S. And the deal. Lets listen. Ive sat through two summits now between the eu and the United States<\/a>. None of this will come as a surprise to either side, especially to the president s because theyve talked extensively about the problem of overcapacity in the peoples republic of china and how its distorting our markets in the United States<\/a> and their markets in europe. And i think the message to them from us would be the same message they would give us, which is were going to protect our workers, and were going to protect our sectors of the economy that are being attacked basically by the prc. Especially in the green tech area, theyve had their issues with solar panels. Theyre facing problems with their electric vehicles, batteries, and so are we. Our message to them and them to us is were going to protect our workers and our businesses. You mentioned you were in the last two European Council<\/a> meetings. No, no, summits. Summits. I was wondering to what extent you recall the meeting on the tariffs with these evs. Iactually dont know what theyre going to do. Their investigations are on overcapacity of the electric vehicle markets. But ive been in the meetings where they talk about it, but they clearly have a common vision of what the problem is. Its not simply with, you know, green tech in the ev, electric vehicle area. Its also on the aluminum and steel. Its now beginning to focus on overcapacity and the use of markets as it is with critical minerals. Theyve talked a lot about it. To the extent they share values, the only problem is working out the details. In that sense, were negotiating agreements between the two systems, between the eu and the United States<\/a>. Reporter lets see how this investigation will conclude. We know that at this stage, theres a bit of a difference of opinion between germany and france and that might impact the outcome of whetherer o not the eu will impose tariffs and how big the tariffs will look like. Lets wait and see for the end of the investigation. In the meantime, well have a conversation with enrico letta and how they continue to deepen the single markets as we approach the european election. On top of that, theyre unveiling new economic forecasts, and well have a chance to speak to po polo gentiloni, the commissioner, later on this morning. Thanks so much for great interviews as well. Great reporting on brussels. Coming up on the show, the International Agency<\/a> releases their latest outlook for the oil market. Well discuss next. 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. What is cirkul . Cirkul is the fuel you need to take flight. Cirkul is the energy that gets you to the next level. Cirkul is what you hope for when life tosses lemons your way. Cirkul, available at walmart and drinkcirkul. Com. 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<\/a> 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<\/a> today at the number on your screen, or visit coventrydirect. Com. Shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and its ready to go our cost for shipping, were cut in half just like that go to shipstation tv and get 2 months free im arabile gumede, and these are your headlines this hour. The risk rally rolling on. The corporate earnings leaving the stoxx 600 and investors brace for the cpi report, fed chair Jerome Powell<\/a> signaling rate hikes will stay higher for longer. By many, many respects its restrictive, and thats going to be a question that time will have to tell. Running out of fashion or going out of fashion. Shares in burberry selling off after the luxury group posted a 30 drop in quarterly profit, with the ceo warning of weak demand in key markets. Mixed fortunes for europes le lenders. Dutch rival abn amno posted a drop in net income. The International Agency<\/a> citing weaker activity and falling consumption particularly in europe. Lets move straight to that story. The International Energy<\/a> agency lowering the cost of oil this year. Now, the iea says Global Demand<\/a> will rise by 1. 1 Million Barrels<\/a> per day on the back of weakness in developed markers. Victor is the lead crude analyst. Thank you so much for the time. Its been a very volatile market. Usually thats what you get out of the oilg market, but we look like we could be in for some instability. Is that what youre seeing . Well, absolutely. I think were seeing crude is offset by the good news coming from china, the United States<\/a> regarding actual demand. I think a lot of people thought the actually physical demand would be much worse. Thats not the case. Physical demand has been quite, quite surprising, but macrois dragging everything down and the end result is net zero. Were pretty much standing in one place. Brenlts is still 83 a barrel. Something needs to shiftdownward instead of upward. If demand continues to weaken yes, the demand for evs may have slowed, but its still higher up there, and you have this push for greener technologies and greener gases, et cetera. That would mean you predominantly lost a lot of that demand. Its not necessarily coming back to market. So the demand story is one that might maintain its level of weakness as well . Well, i think it requires an unprecedented amount of courage and bravery to assume that oil demand would grow 2 Million Barrels<\/a> a day in 2024 or even higher, because ultimately at some point there needs to be a saturation in the markets, and we just shouldnt be growing that quickly. I think oil demand will be growing across the entire decade, the 2020s, and i dont think its happening in 2026 or 27. We still need to wait for it. But the actual year on year increments will get so much smaller than they have been in the past decades. We need to get used to it. So i think ev penetration certainly a thing. We should not give up on oil. Increments will be tiny. 1 million is a very tiny amount given the conditions were in. The conditions are very restring active and yet oil kdemands are growing. Opec would be fine with this, wouldntly . They . Oh, absolutely. If they were to say 1. 5 Million Barrels<\/a> a day and we stay at the prices right now, no one would be upset. Pretty much thats a reflect of reality. For some reason they tend to be too optimistic. That i see everywhere a potential, but not every potential will be realized as we will see later o then year. That Global Growth<\/a> story is one to look out for. Stateside that looks like that may be able to grow a little quicker than some of the rest of the world, if the rest of the world would pick up, surely that means demand also inches higher, or is that small increment there as well, that even if it gross higher, the oil segment is not going to be as sizeable as weve seen it before . Oh, absolutely. Im fully with you. We need to get accustomed to the idea that not everyone is supposed to grow. Europe will not grow. The United States<\/a> is stagnating before starting to basically follow suit and basically doing what europe has been doing for the past couple of months already, effectively declining. It will really just be asia and africa. Well have a twotier market. The Atlantic Basin<\/a> is declining, asia is growing, and the two will start to compensate for one another. The losses in europe, the losses in the United States<\/a> will be come pen sated by asia. So effectively the growth will be much, much smaller in the future. Thats what we need to get accustomed to. Well still grow, but the percentage points, the absolute terms will be miniscule. Viktor, i appreciate the time. I mentioned that over your right shoulder. Its a sunset or picture. It looks like its going to be gorges. Thats the future of the oil industry. Thank you so much for your time. He helped us unpack the oil market a little bit more. Heres a story for you, google showing its latest model on ai. The new lightweight ai known as gemini 1. 5 flash, will be able to summarize conversations and extractd data from documents in a faster and more costeffective way. Ceo cinder pichai said theyre growing more at ease. Its evolving continually. Theyve been asking questions for a while. With generative a. I. Weve been doing it better. Feedback has been good, right . User engagement has been positive, the feedback has been great. I think it makes the product much better, so its a great direction. What about advertisers, because this will change the business model. In some cases youll get links. In some searches youll get a generative ai ancer, which will move the links lower down on the page. What are you telling them about their users . The great thing is users still look at our information. Ads work on quality and relevancy at the right time. Weve been able to test that out, and its working well as we expected it to. So i think it will be a smooth transition, and thats what we are seeing. So despite all of that, if you saw the share price of google having launched this, what it says is, yes, a lightweight model ai, its still significant in the big scheme of things. Theres expected to be this revolutionary change. It certainly has been. But even just on the back of that then, if you take a look at alphabet yesterday, it only went up 0. 6 on the back of this launch, in fact. Thats because perhaps of late, maybe there might be some fatigue, and thats just a question mark of what youre see across the board. Nvidia there. The big gain was tesla. Are we getting this ai fatigue in the market . Because meta said it would spend 35 to 40 billion more on ai products particularly to try to increase User Engagement<\/a> as well. Their stock got hurt 16 on the day. They got hurt 16 on the back of that spend. Softbank will focus on that as well. Apple finally touted ai within its devices, particularly in its ipad and the possible tieup with chatgpt. Its not like appalshop the eyes out this week. It doesnt seem like there was much to say about that. Openai released gpt 4. 0. Google announced new shares as we just spoke about. Has it gotten to the point where theres too much happening in the space and itsing the rubber hitting the road when it comes to ai . Monetizing it . It actually being seen if your profits . The question is who is making money out of ai . Is it just nvidia, or have the other tech players also begun to make money out of it or are they spending money on it, which obviously helps the likes of nvidia and tmc and the chipmakers. I think this is where divergence starts to come in. Well see how this fairs over time. Im not saying one or the other is possible, but certainly anything can happen in play. Its a very interesting market to look out for. Coming up on the show, its less than six hours until we get the latest look at u. S. Consumer price inflation. Well take you through what to expect. Well do that next. What is cirkul . Cirkul is what you hope for when life tosses lemons your way. Cirkul is your frosted treat with a sweet kick of confidence. Cirkul is the Effortless Energy<\/a> that gets you in the zone. Cirkul, available at walmart and drinkcirkul. Com. Hi. Im Wolfgang Puck<\/a> when i started my online store Wolfgang Puck<\/a> 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<\/a> helps manage orders reduce shipping costs and print out shipping labels its my secret ingredient shipstation the number 1 choice of Online Sellers<\/a> and Wolfgang Puck<\/a> go to shipstation. Com tv and get 2 months free norman, bad news. I never graduated and wolfrom med school. What . But the good news is. Xfinity mobile just got even better now, you can automatically connect to wifi speeds up to a gig on the go. Plus, buy one unlimited line and get one free for a year. I gotta get this deal. Thats like 20 a month per unlimited line. I dont want to miss that. Thats amazing doc. Mobile savings are calling. Visit xfinitymobile. Com to learn more. Doc . Welcome back, u. S. April Producer Prices<\/a> top forecasts by 2. 2 . Thats the biggest increase in a year. Some that are used to look at the inflation measure eased. Well get a cpi figure later. Fed chair Jerome Powell<\/a> also described the cpi report more mixed than hot. Speaking at the Foreign Bankers Association<\/a> in amsterdam, powell talked about it being restrictive and indicated the fed will keep the rates higher for longer. Having the restrictive policy, we have the highest Interest Rate<\/a>s in some time. It may be that it takes longer than expected to do its work and bring inflation down. I am confident we will do that, but that we will get inflation down to 2 and ultimately we will need to do with our policy rate. By many, many measures the policy rate is restrictive. The question is it sufficiently restrictive, and i think thats going to be a question that time will have to tell. Entertaining the possibility is that could be a very small probability, but i say i have said that i dont think that its likely based on the data that we have that the next move that we make would be a rate hike. I think its more likely that well be at a place where we hold the policy rate where it is. Steven blitz joining us. Thanks for the time. Are we restrictive enough . Did yesterdays cpi give us a sense that this is fine, we dont need to move any further . Well, i dont think wering are that restrictive, but, again, thats the idea, isnt it. If you look at the market rates compared to precovid and the praise of the economy, its its hard to say that the economy that the fed policys tight enough to really slow the economy down to the extent that you would usually see to create a downturn in inflation. So what we have is high enough to keep growth at a pace so that the natural rate of inflation, which is what the fed is really banking on of 12 reveals itself slowly over time without creating a recession. The previous guest on the show actually called it transitory, that stickiness in inflation, using the dreaded t word that the fed doesnt like to see right now. But is it actuallytransitory . Were seeing the uptick, the stickiness thats continuing to hurt a little bit. Still around 3. 6 is the anticipation here. Is it as transitory as we think, or would powell be at risk of ignoring an inflation resurgence . Well, i think personally i think hes a bit at risk, okay . I think and the problem is when you look at the numbers, you see the rates of inflation slowing in some cases. You see the rates of inflation coming back up again in some of the good sector because of the upturn in manufacturing activity, small as it is, but still its reaccelerating. But the real problem is you have this huge jump in the level of prices, and prices change more and more frequently than wages do, and nominally wages have slowed, but its still behind what it was for most job sectors, and that means theres still going to be a push for higher wage growth going forward, and thats going to manifest itself in service prices. Yeah. I mean, thats going to be interesting because thats really the point that was shown just in that ppi figure as well yesterday. How does the labor market feature into this, especially s this cpi print and where rates are at this time . I think the best news is you got 170,000. I mean, i think thats a much more normal number to get. I know everybody jumped on it being a slowdown of the economy. But 170, 150, those kinds of numbers are more common when you have an Unemployment Rate<\/a> inside of 4 . And the problem was getting 250 and 300, right . So the feds looking at this. Theyve got a rolling threemonth rate on inflation thats higher than the yearoveryear rate, and the backdrop on that, because remember inflation is a lagging indicator. The backdrop on that is still a strong labor market. So it doesnt give you a lot of comfort that the yearoveryear rates going to continue to decelerate. In fact, im sorry to tell you it is going to be the opposite. So hes going to stick where he is. Hes definitely not going to hike unless we see jumps of yearoveryear above 4 . Hes still going to squeeze it down. But, boy, hes running a risk here. Hes running a risk on that, and hes running a risk on a too strong drawer working against the industrial policy of the administration. You could also then say actually hes done everything he could. He only has one piece of you know, one piece of equipment to try to bring down inflation rates, and that is, you know, Interest Rate<\/a>s being higher. He could say that the government has a part to play here because spendings just gone up too high. Thats how you get inflation down. Youre 100 right. If you go back over time and look, youll see that Government Spending<\/a> as a percent of gdp has jumped, and as long as thats on the rise and you do have a deficit thats at 6 versus 3 of gdp, that pushes a lot of spending through, and that makes it a lot harder. You know, this goes to the point of whether or not the feds core belief that inflation goes back 2 because of the slowing population growth, you still have Global Sourcing<\/a> and labor capital and Technology Replacing<\/a> labor, that as long as you have all these pieces, inflation over time is going to go back to 2 . Now turning to some higher number. And thats what gives them the ultimate confidence that they dont have to create a recession to get back to 2 , but obviously theres a large group of us out there who think otherwise. Yeah, look. It seems like a very long road to 2 it feels like at this stage, and it may certainly tang some time. Remember, there was the whole thing, higher for longer. He said that last year. Hes still saying it. Steven, appreciate the time, especially for the early rise to join us on squawk box or street signs i should say. Steven blitz is the chief u. S. Economist at ts lombard. Speaking to our sister channel, sky news, jpmorgan chases jamie dimon says the u. S. Economy needs to be cogny zablt of borrowing its way to growth. I want to high light. Thats just what i was speaking to steven about, that the u. S. Government is spending far more than it has in the past, which is keeping inflation a little bit higher. So if we go back to literally what jamie dimon is also making note of then here, hes saying that the u. S. Economy needs to be cognizant of borrowing its way into growth. Heres what he had to say. America has spent a lot of money. During covid and after covid and our deficit is f now, thats a lot, but obviously that drives growth. So any country can borrow money and drive growth but its not always good growth. We have to focus on our deficit issue as little more. That did drive growth. Is that a big warning . Do you think theres a comeuppance to come in the next couple of years . I dont think its a big comeuppance. I dont think its the next couple of years, but thats why we have higher inflation and sticky inflation. If you want to do a great job in your country and with you have a 6 deficit and 100 to gdp, this could go on for a while, but the sooner we focus on it, the better. Im hoping the government focuses on how do we reduce that deficit and have good growth. Dimon was also asked about the now white house tariffs on china and whether were likely to see more trade tensions. America has the right to protect etc. When it comes to unfair trade. There has been some unfair trade, but we sell few evs in the United States<\/a>. I look at it a little differently. As long as china is on the side of russia, were going to have a hard time, and taiwan is always going to create problems if that doesnt resolve properwill i in the future. But other than that, the western world has a good hand. High gdps, good growth, good innovations. Weve got a lot of allies. Weve got nato. We should remember all that. And we have competition with china. I think the American Government<\/a> is doing the right thing to fully engage. That doesnt mean china is going to like everything we do, just like we dont like everything they do. It double have to be war. It can be tough competition, and we should be prepared for that. Again, i think the most important thing is we do it together. Certainly interesting conversation coming through from jamie dimon. Overall, lets take a look at how the markets are looking then. If you start out of europe, you see a slightly mixed picture. The ftse 100 managing to move higher, a third of a percent. It was around half a percent higher not so long ago and hitting a fresh record high, so easing off that top on that front there while, of course, if you focus on the United States<\/a>, you do have that cpi print. Were a couple of hours away from that then. Still anticipated to be too high to cut rates. That ink you so much for joining us on street signs. Thats it for your todays show. Im arabile gumede. Worldwide exchange is next. My name is Ashley Cortez<\/a> and im the founder of the stay Beautiful Foundation<\/a> when i started in 2016 i would go to the post office and literally fill out each persons name on a label and now with shipstation we are shipping 500 beauty boxes a month it takes less than 5 minutes for me to get all of my labels and get beauty in the hands of women who are battling cancer so much quicker shipstation the 1 choice of Online Sellers<\/a> go to shipstation. Com tv and get 2 months free 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<\/a> 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<\/a> today at the number on your screen, or visit coventrydirect. Com. What is cirkul . Cirkul is the fuel you need to take flight. Cirkul is the energy that gets you to the next level. Cirkul is what you hope for when life tosses lemons your way. Cirkul, available at walmart and drinkcirkul. Com. Its hard to run a business on your own. Make it easier on yourself. With shopify, you have everything you need to sell online and in person. You can have your inventory, payments, and customers in sync across all the places you sell. It doesnt have to be lonely at the top. Join the millions to finding success on their own terms. Start your journey with a free trial today. Norman, bad news. I never graduated from med school. What . But the good news is. Xfinity mobile just got even better now, you can automatically connect to wifi speeds up to a gig on the go. Plus, buy one unlimited line and get one free for a year. I gotta get this deal. Thats like 20 a month per unlimited line. I dont want to miss that. Thats amazing doc. Mobile savings are calling. Visit xfinitymobile. Com to learn more. Doc . Its 5 00 a. M. At cnbc Global Headquarters<\/a> and im dominic chu in for frank holland. Fed chair Jerome Powell<\/a> doubles down on his view that the next move will not be a hike. Ahead of that, u. S. Stock futures surging in some directions with the nasdaq back at alltime highs. Helping things along in a very big way as google opens ais latest chatgpt final","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia600404.us.archive.org\/29\/items\/CNBC_20240515_080000_Street_Signs\/CNBC_20240515_080000_Street_Signs.thumbs\/CNBC_20240515_080000_Street_Signs_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240703T12:35:10+00:00"}