Shares in siemens slump with a quarterly loss it reviews the russia business no technical justification behind the cuts. We have no major announcement from the breakdown of operations this is why i cannot reconcile a technical reason for the supply of gas. And moodys cuts the italy outlook to negative with the political volatility in rome the center level is falling apart ahead of the key general election good morning welcome to another trading week. European markets digesting the strong payroll report of 528,000. Almost double what the market considered very strong number the Unemployment Rate also lower. Coming in lower heexpectations a recession defying number that reaction so far across markets has been positive. Stoxx 600 today is all trading in the green as far as the heat map is concerned the index is up 5 Percentage Points the week as a whole, the stoxx 600, down. 60 starting off on a better foot. This is the breakdown. The toftse 100 is higher today despite the gloomy Economic Outlook from the bank of england. Cac in france up. 73 . They sold uk assets and we are seeing a bit of positive reaction in the Waste Management company. Xetra dax in germany the German Energy regulators warning consumers need to reduce consumption by 1 5 as we head tto the winter months. And the ftse mib is up. 23 . The political situation continues to be the number one focus for italian stocks going forward. As for sectors, you can see it is a positive day. Every sector trading in the green. Utilities are 1. 1 higher. One spot of red on the board with banks trading below he the flat line. We had a strong reaction after the nonfarm payroll on friday today, things are bouncing back. 10year france is trading at 1. 43 italy as well. Just around the 3 Percentage Points key psychological levels fixed income has started to come back we traced about 10 or 20 of the sell off on friday julianna lets turn to equities in the u. S. We had the sell off in tre treasuries in the 2year treasury and 10year treasury jumping. In terms of stocks this morning, all three stateside are pointing stronger Dow Jones Industrial average is looking to rally over 100 points s p and nasdaq looking to gain ground last week, we saw significant outperformance of the nasdaq which gained 2 . Stronger for the dow and s p lets talk about that and the payroll report nonfarm payrolls rising 528,000. More than double than estimate Unemployment Rate topping forecast at 3. 5 and average Hourly Earnings jumped 0. 5 this will likely force the Federal Reserve to continue hiking aggressively to cool the economy and bring down inflation. Goldman sachs economist told cnbc the july payroll numbers could force the fed to act, but other releases like the inflation figures on wednesday will determine how aggressive it will be come september this was a hawkish report as far as policies are concerned. It is not surprising this market is selling off on this information. It does increase the possibility the fed will have to do more our expectation is the 50 basis point move at the next meeting this increases the risk of 75. The market moved in the direction of 75. There are reports and two cpis before the fmoc meeting. We will see what happens we have the cio who is joining us right now lets kickoff with thenfp numbers are friday clearly the market reacted strongly to the report we saw the spike in yields stateside. Did the numbers with the report on friday do anything to change your view for the path forward for the Federal Reserve . We had a lot in the turn around by the Monetary Policy by the end of the year. You could think it was feasible. You think the change of course of Monetary Policy will be rapid. In terms of numbers, i totally agree with the recent speaker. It increased the chance we will have a 75 basis point in september, but it is not a done deal. What does it mean for equity performance in the coming months the rally we have seen in equities in midjuly was driven by the weaker expectations and the fed would not hike aggr aggressively do you think that still stands should you be chasing the rally . Certainly not this is not the view the rally has been strong, but the fact you had reaction on the bond market on friday and we will check this week what will happen with the number and cpi one key factors that supported the rally was the strong bond market in the months of july and disappeared to a certain extent. Second, we still have the key issue looming. How much will history advise the earnings numbers for the Third Quarter . For the time being, earnings season has been good the forecast or perspective not being that strong. We considered that the two elements that can support further rally on the equity market are not clearly there the bond market rallied and earnings is not yet the earnings season is good. The earnings revision could come it is better not to chase the rally on the equity for the coming months. I want to ask about the shape of the yield curve we have yields flashed up right now. A lot of people are talking about the yield curve inversion and the difference with the 2year treasury and 10year treasury is minus 40 typically the curve has never been this inverted without recession coming on. Is it your view this time could be different or are we just sitting here waiting for that recession to actually hit. Thats a very good question i wouldnt say this time is different. You know, it is early to say this time is different we need to understand the cycle is very particular because in the sense you have the credit and ukraine crisis and all of the elements that come together. It is really difficult to have a lot of visibly issues in the economy cycle. You sneed to review month by month and the market is priced in recession since june. Do we have recession i dont know i am not able to answer this question for the time being. I consider that for example the speech of janet yellen has been good in the sense of yes, you can speak about recession and market fear recession, but the numbers are not telling you there is recession we need to be nimble and check what is happening week by week and month by month we should have more visibility by the early fall in the u. S. In particular it just feels like an impossibly difficult time to put your money into the market because of the macro headwinds and the volatility were seeing in stock markets and you look at the results of berkshire hathaway, the greatest investor of all time, Warren Buffett saying this is the best quarter. The tech invest or tycoon with those months where do you put this money knowing there is a recession and you are faced with high inflation pressure and the fed hellbent on tightening it . I say at the end of the day, the key decision is the markets are volatility and you stick with your guns and i think that is what we did it was very difficult, as you mentioned, it is a difficult market environment i think equities have the potential if we think in terms of the next 12 months. You need to think about how you invest and you need to observe the numbers coming i think cash for the time being gives you the flexibility is interesting to have cash you know, everything is possible in this environment. We could have recession, but you could also get a satisfactory rate in the coming 12 months i think on the bond side, we know it is difficult to make money on the bond side i would not chase the bond rally that we speexperienced the lasto months you need to have some hedge funds or equal strategy for your portfolio to keep investment equities because those are the place to migrate and that is going to protect you against inflation partially. We have certain names in the Asset Allocation this is the way to move forward, i think. Excellent thank you for that response. Francois, thank you for joining us today Softbank Vision Fund posted a loss of 2 trillion yen in the Second Quarter after bets on tech firms failed to pay off losing the company 3. 16otal. Argen, give us a reason why they are falling and sustained so many losses and continuing down the path which is investing in nacent Startup Companies that lose cash and hope to ipo and gain profit from there are a few things at play, joumanna we have seen flinflation and Central Banks deal with that it has put pressure on the public market. Softbank says the losses in the south korean firm and doordash with stocks hit hard in the Second Quarter that negative sentiment in tech stocks has filtered through to the private market we are seeing valuations now come down quite significantly. It is also led to a lack of ipos softbank relied on the ipo market to get companies to the market and make their money off that and reinvest it into other companies as well. Thats also dried up somewhat as well which put pressure on it we have seen the regulatory tightening in china for the Domestic Technology which hurt share prices masioshi son has given a good view in the world. He gave a candid view at the press conference listen in. This quarter, 3 trillion yen loss previous quarter, 2 trillion loss in total, i said 6 trillion yen earlier. Actually, it is 5 trillion yen loss previous year, we made 5 trillion yen gain. So at the same level of the amount has been lost so, when we record the big gain, i actually was very proud, myself, and when i look back, im a bit embarrassed and i heard a lesson so the factors of loss are two things one is the global stock market tur turmoil and the other is the rapid fall of yen. He said he will play defense. It made 10 billion on prepaid forward contracts of alibaba shares in the quarter. It sold off its uber stake as well so it looks like softbank is bolstering the Balance Sheet to give investors confidence. You have seen in last few minutes the Company Announce a 400 billion yen Share Buyback amounts to 6. 3 of its shares as well to shore up some confidence in the company guys argen, in terms of the Investor Sentiment around softbank, it has been a volatile ride to your extent with investors in the space, do you think the measures will go far enough in terms of restoring confidence in masioshi son they need discipline from softbank at this point one thing that softbank has done in the past is being very aggressive on investment and the creiticism of the company is it hasnt looked at quality when it comes to investment. We know wework for example it was good when the tech market was going off high valuations. Now they come under significant pressure masioshi son is making investment not just for the sake of it, but in companies that it does believe has a future and has strong Balance Sheet and has a big market to address as well. Thats not necessarily the case with the investment that softbank has made. Argen, great to have you thi morning. Sticking with the tech space. Elon musk challenged the twitter ceo to a public debate he asks if the spam account numbers were accurate. Musk said if confirming the number of accounts is accurate, he should go ahead a source close to the company told cnbc a debate is not happening outside of the pending trial in october. And coming up, pointing the finger at russia to reinstall a key turbine to boost gas fwslo to europe. His thoughts next. Welcome back to the program. German residents reduce energy by 1 5 to avoid a gas shortage this year. Muller told a german newspaper it would be legitimate to introduce austerity measures to save jobs. A Third Quarter net loss of 533 million euro and expects losses to exceed those of last year the company is counting the cost of restructuring the russia business and poor performance. Siemens energy remain deadlocks of the delivery of the turbine for the pipeline it was unclear when the turbine would arrive in russia. It is one of the most world famous turbines. Why it is needed it is a normal cause of maintenance what we are doing here you have six units installed and five are operating and you have a spare to continue with the maintenance and operations that is a unit which is waiting for and it sits in germany we prepared all import paper to russia we obviously do need certain import information from the russian client which has not taken place yet. We are in daily discussion was them it has not been cleared yet. Obviously, there are other units to be operated as we have said and underline it, we cannot reconcile the direct consequences of the one spare turbine and the cuts in gas supply it is really something up to ga gazprom as a customer. Christian, pulling this together and three other turbines and russians say need major overhauls, how pessimistic should we be about the supply through nord stream 1 . As i said before, i cannot see necessarily this is technical reasons. This overhaul is scheduled overhaul this turbine, which is currently in the discussion, was supposed to be exchanged this september so there is nothing in terms of delay yet. There is obviously other turbines expected to be overhauled we still have no major announcement of any breakdown from the operations. This is why i cannot reconcile a technical reason to the supply of gas there could be other reasons and i cannot comment on. Christian, being at the front of this and what transpiring with the turbine, are you saying the russians are using mai maintenance as an excuse these turbines are more than ten years old. We get called when maintenance is warranted all of the daytoday operation is under control of the russian customer i cannot judge on it i can only judge on what i get every day. In this regard, we are trying our most and the rest is up to the russian customer on what is possible and not possible. Meanwhile, chinese exports continuing to rise in july despite the slowing Global Demand rise of 18 for the fastest gain this year as china struggles to recover from the covid slump as one set of Chinese Military drills were set to wrap up, another kicked off beijing started drills in the yellow sea on saturday which will continue until the middle of august. Another military operation kick o ed on sunday china announced the war games in the wake of u. S. House speaker Nancy Pelosis visit to taiwan where she said the ironclad support of democracy continues. And italy and moodys cut the rating from negative to stable they cited unknown political futures as the downgrade despite the headwinds, data shows the economy grew 1 in the Second Quarter which was actually stronger than expected. On the political side of things, a conservative alliance led by the italy far right Brothers Party is topping opinion polls ahead of the election next month. The party formed a conservative alliance with liga. Left alliance brokedown with the centrist Party Instead trying up a separate alliance. Italians will vote in the snap general election on september 25th we are watching closely. A quick word, julianna, the left is in disarray right now italy cannot get the Coalition Group together the more political infighting, the more the left and right is benefitting. This is going to be a tough time for the markets to ignore if it continues. Coming up, how lenders are faring with the hike in Central Bank Rates we will discuss next welcome back to street signs. Im Julianna Tatelbaum im joumanna bercetche. These are your headlines equities push higher with majors kicking off in the green as investors continue to gauge the recession defying u. S. Jobs report. Softbank posts a loss of 3. 1 trillion yen with most coming from the vision fund arm the Company Confirms the exit in uber. Thequarterly net loss of 500 billion euro for siemens ceo tells cnbc he sees no justify jin justice justification of the turbines. This is why i cannot reconcile the technical reason of gas a big p win for President Biden as Senate Democrats pass the 740 billion economic bill dubbed the inflation reduction package. We are about an hour and a half into the first trading session of the week. Beside me you see it is green across the board european equities reacting to the payroll report on friday the aftermath is the fact that the market seems to be thinking the u. S. Not headed straight for recession the way there have been fears before the strong report came out. It is a big week for data. We could get more clues as the u. S. Economy is doing. That will effect trade in europe the cpi coming out on wednesday is the key one to watch. That is not all. The u. S. Ppi coming out and eurozone Industrial Production numbers and uk data on friday. A lot more to come this week as of now, european equities hi higher in terms of currency, the dollar trading on the back foot dollar index down 17 basis points euro is trading firm against the dollar fixed income markets are stronger as joumanna talked about it higher move in treasury. 2year treasury gaining 18 basis points the 10year treasury gaining 14 points we saw sovereign bonds take a beating on friday. This morning, italian 10year treasury is trading with 3. 02 we have the german bund trading with the yield of 88 basis points joumanna lets look at european banks are trading this morning we tend to watch these from time to time. Deutsche bank down a bit and hsbc trading about. 10 firmer ubs in switzerland up 1. 9 Percentage Points. Some of the largest banks have been speaking to cnbc this earnings season about the monetary tightening cycle and how they are managing the risk. We are looking at tough circumstances in terms of where this is all going. Whether it