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tv   Street Signs  CNBC  July 29, 2020 4:00am-5:00am EDT

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that's all for this edition of dateline. i'm craig melvin. thank you for watching. good morning welcome to "street signs." i'm julianna tatelbaum these are your headlines deutsche bank shares rally as investment bank revenue jump 46%. rising significantly throughout the rest of the year >> we'd like to see better performance in the second half of 2020 than is the case in the second half of 2019. we don't want to get too far
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ahead of ourselves but it is gratifying to see the momentum >> barclays sets aside $3.7 million shares. sending shares lower in london telling us this bank's capital position is strong >> we remain very capitalized and liquid we sustained profitability in the face of this pandemic. that allowed us to help customers around the world >> santander sees red amid a slew of write downs. investors find the diamond in the rough at kering sales fall less than expected, dropping almost 44%. the french luxury group says there will not be a second half bounce back.
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>> as you heard there in the headlines, we heard from a number of companies across different sectors putting it all together markets trading higher up 0.2%. we are building on yesterday's gains the main benchmark breaking a two-day losing day for the european markets and also on wall street. the federal reserve, the conclusion for the meeting as well as keeping an eye on washington where big tech will be coming under scrutiny a lot for lawmakers to digest this morning a look at the regional markets
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a bit of a big picture here. kering i mentioned the stock trading higher helping lift the cac 40 a bit of red on the board for the swiss, spanish and italian markets. the dax is essentially flat. looking at the chinese markets we saw a strong rally. the shenzhen composite higher. we are keeping an eye on developments there and what may have driven gains. let's get back to earnings barclays has set aside 1.6 billion pounds to set aside for potential losses bringing provisions to 3.7 million pounds with more expected to follow
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the uk bank saw its consumer business hit as it saw a loss of demand for credit card and loans. barclays post a 1.3 billion pound pretax profit. the ceo told cnbc the bank is erring on the side of caution with the outlook >> i've been very conservative in the economic data and forecast we've used for our impairment models. that has meant we set aside 3.7 billion pounds for impairment reserves. very conservative assumptions going forward in the gdp and the uk and the u.s. but maintaining the profitability level allowed us to print the highest level of capital in the history of the
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bank our assets was 14.2% the end of june >> expecting capital markets to remain busy the second half of the year but the peak may have passed >> expecting the markets to mod rate at levels we saw in the first and second quarter i think that's a fair expectation. our fixed income currency and credit trading revenues were up 16% in the first half versus the first half of last year. clearly helping the profitability of the bank overall. we like our position we think the capital markets will continue to be the market for the financial industry the amount of issue eance of investment grade date.
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santander has posted a record of 11.1 billion euro net loss after booking impairments much of that massive write down is due to the performance of u.s. and uk acquisitions excludeing those one off items, they saw the profits slide 27% to 1.5 billion euros year on year >> the bank proposes a script dividend and intends to resume full cash dividends, quote, as soon as market conditions normalize. >> deutsche bank is higher after revenueses rose 46%. the bank struck a positive tone for the rest of the year the cfo told cnbc the bank
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stands ready to regain the market share >> is some of that has carried through to july. the trends i just described. normalization but still a transition we saw coming through are trends that would continue we like to see a better performance in the second half of 2020 than is the case in the second half of 2019. there are a lot of uncertainties in the marketplace we don't want to get too far ahead of ourselves it is gratifying to see that momentum. >> what has investors more excited this morning >> i think it is the outlook
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they are more optimistic despite the loan provisions which are very high given the slump in the second quarter the revenuout look, one could say they are hiking it slightly now they are seeing it to be flat of course i asked what he thinks would be the biggest effect of the crisis on the bank's business >> i think the crisis does two major things one is, of course, the rate environment and looks to below for an extended period that means we have to adapt our business models for an expectation of that to continue.
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another thing is an acceleration of dig tiesation in terms of the products we provide and the cost of delivery i think these things can or this environment can be a catalyst for change in the industry i don't think it directly leads to consolidation but it is a factor and accelerates factors in strategic considerations. >> how are you planning to adjust your business model to the negative rate environment? >> we talked about that last year as an initiative. also in the private bank engaging with the clients.
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about offering investment alternatives as i mentioned, it is about restructuring our business so we deliver in efficient way to make those costs more efficient through technology i think the responses to this environment are very consistent to the decisions we made last year and also the strategies for the bid businesses we laid out in our december investor day >> you've been saying those clients have been repaying those corona loans faster than expected does it mean clients are more optimistic >> i think the economy has remained more liquid than one
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might have expected in the stress period. that is true of households and corporates >> we are all uncertain in the second half of the year and going to 2021 will look like i think people are cautious about how they are managing their budget or households to a greater certainty. on the positive side, there is liquidity and resources that can accelerate consumption and business activity. on the negative, people can hold back until they see the basis for more confidence. >> mentioning the numbers is also the asset management arm. dws who has a separate rotation and was reporting today. their net in flow was a lot higher than expected
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so also positive news from that part of the business the private bank was a bit weak. it has a decline in the revenues but is still undergoing restructuring. retail banking in germany is a very low margin and under a lot of pressure given the negative rate environment back to you. >> thank you for giving us that interview and breaking down the numbers. let me give you more detail of what we've heard they've seen total revenues increase by 5% in the second quarter. the group has warned investors to expect revenues below 2019 to continue amid the pandemic the cfo outlined her view. >> in the second half of the year, we continue to be constructive in our view of the equity markets
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we are cautious and mindful that risks of a second wave or anything in front of us could put that in risk we are cautious and guided 0 and expect revenues in 2020 to be below those of 2019. regardless of that, we'll manage to absolute profit levels and deliver share holder value overall. coming up, the sale of regeneron helps osbot sanofi earnings more after the break look here, it's your very own all-in-one
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with peacock premium included at no additional cost. no strings attached. welcome back smurfit kappa the irish packaging company will pay an interim dividend the ceo explained the company's share holder payout. >> we've been able to manage through with our margins at
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17.5%. half a billion free cash flow generation over the last year. we fundamentally believe dividends are a part as the reports would say as they are down year on year. >> underlying profit at the angelo australian minor fell but was well above forecast. the china infrastructure stimulus has helped support steel demand >> in the luxury space, kering has posted a 43% fall the french operating group also saw an
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operating margin carrefour saw operating budgets jump as the giant saw a raise in profits. delivering 480 million euros in savings and promised more price cuts in the core french market group performance was also helped >> schneider posted a better than expected decline in earnings for the first half. the ceo told cnbc, he thinks the virus is here to stay for a long time but that the group is confident to its targets >> we are recommitted in the new
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environment. i see most of us will have to live with the virus. we have to do it with the right precaution making sure we operate with safety. we are in business we just do it differently. we do it to adjust to new situations >> in the health care space, sanofi has raised guidance in cost cutting the french drug maker predicts the growth of 6% to 7% above previous estimates of 5% let's get out to charlotte with more it is rare to see a company confirm guidance let alone boost the guidance on the year what does the quarter look like to raise the target for the year >> that says we are down in the
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second quarter for sanofi on the comparable basis the net income was up 5.6% saying when they saw the best stake in regeneron in may, they receiv received $11.7 billion in the sale they got the good boost from a treatment. this gave them extra boost in the u.s. looking at other businesses, vaccine sales have been down due to confinement due to no travel, vaccines are down they are expecting this as well as the consumer health care. people have been using a bit of
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that in the q 2. there for the sales are down 8%. they saw a strong demand for the flu vaccine and said that they already started shipping some of that to the u.s. as well that was interesting here to see as you said they upped their guidance to up to 6% to 7% that was interesting to see as they mentioned they signed an agreement with the uk government for the potential vaccine. they didn't disclose this transaction but said they would supply 16 million doses to the government the extra data on the calendar they said the clinical trial will start in september and they are scanning up the manufacture
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of the vaccine that they are developing so here, giving extra developments on the development of one of two vaccines working on one with the vaccine. so the only pharma working on these two vaccines at the same time they are sending shares higher about 0.7% on the french market. >> i wanted to see what you heard. sanofi had come under fire earlier for suggesting that the u.s. may get early access to the vaccine. this angered the french government, one. they've said since then, they are all for equity distribution. did we hear anything beyond how they plan to distribute to other
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parts of the world >> you are right it was an up roar where they said at the time, the u.s. would get part of that vaccine they had been warning the eu that they needed to get together to help. they would put those actions together as announcing the talks still ongoing for the eu and specific countries like france and italy that agreement with the uk this morning >> charlotte, thank you for all
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of the detail. president trump has defended the malaria drug after he called the drug, quote, a cure for covid. twitter said the post was misleading and removed it from the platform bill gates says drug treatments may greatly reduce death from the virus by the end of 2020. saying he was concerned by the spread but encouraged by recent vaccine trials >> i'm enthused by all the vaccines there is the first wave of about five and then there is the second wave that are cheaper, could be more effective but they have to wait because they didn't
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get done as quickly. you'll hear various phase threes will start johnson&johnson is a fairly good vaccine. astrazeneca and moderna are first to get out there we live every day hearingabout these. how we put the country's money behind these, this is cooperation to figure out within a country and across countries where this vaccine should go >> then on the therapeutic side, do you see any drugs out there you'll be able to get a prescription from a doctor, you'll be able to go to cvs or walgreens so that it is not and in person, in the hospital
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event. remdesivir that is possible to move to a form if we got early and to administer. there are two other anti-virals more likely to be oral before the end of the year, those two, that could be figured out. >> i would say the antibodies, in that class, eli lily, astrazeneca are doing some pretty strong work those are faster you can see the they are pew
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ti therapeutic benefit. i think we'll have substantial production by the end of the year with the production of these new tools. some of which, when you start to have serious symptoms, you would be treated before you have to go to intensive care. >> bill gates speaking there to our u.s. colleagues. coming up, uk prime minister boris johnson defends new travel measures on visitorsomg om cinfr spain. more after the break
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welcome back to "street signs. i'm julianna tatelbaum these are your headlines deutsche bank shares rally as they jump 46% but the lender warns provisions will continue to rise through the rest of the year >> we'd like to see a better performance in the second half of 2020 than was the case in the second half of 2019. we don't want to get too far
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ahead of ourselves it is gratifying to see the momentum into the second quarter. >> barclays expects increase telling cnbc the bank's capital position remains strong. >> we remain very capitalized and liquid we sustained profitability in the face of this pandemic. that allowed us to help customers around the world >> santander sees red as they posted a record loss amid a slew of write downs investors find the diamond in the rough at kering shares trade higher. dropping almost 44% as the french luxury group said it will not be a second half bounce back
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>> european investors very busy this morning we are seeing overall the market build on yesterday's gains building around .4% breaking a losing streak and contrast to the pull back we saw in wall street it is a big picture. we have the cac 40 opening up and moving after what investors have seen as a more encouraging result the ftse 100 gaining ground up about .4%. on the down side, we have italian and spanish stocks coming under a bit of pressure the dax essentially flat on the morning. the dollar weakening over the
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morning, this morning, we are seeing renewed weakness and trading about a third a percent higher sterling also climbing versus the dollar up about do.2%. it is a big day. we are looking to the federal reserve. the conclusion to the policy meeting. the dollar in focus more so than we have seen lately. the equity reports to open and we have green on the board with all three major indices pointing to a stronger start. this goes to the pull back in all three indices. the nasdaq under performing as led by amazon. the big day for tech as well with the hearing taking place in washington, so all eyes there. we'll discuss that later on in this show. for now, the uk prime minister
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has defended a rule for travelers to the uk from spain to quarantine 14 days. saying he took swift reaction from signs of a wave in europe that move called unjust. big reaction from the spanish government we had a chance to catch up with a member from the catalonia government >> as you mention, the spanish government being very critical of this decision to reimpose quarantine from people coming back from spain. they just reopened borders to try to welcome tourists. tourism is very important as 12% of their gdp
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a large percent of visitors come from europe. catalonia has been a hot spot. seeing more than 1,000 new cases in the past few days we spoke to the president of catalonia about the whole situation. in his view, the uk quarantine was unnecessary. >> this is leading a very complicated situation. in every country, there are clusters or outbreaks. when you have a global definition that, okay, catalonia is danger or spain is danger, you have to focus much more. in catalonia, there are only three outbreaks. in two small areas in the west and the north.
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the rest of the areas, they are freeze of virus, so you can visit us with no problem >> it is some what concerning of the average age of those fe infected by covid is 37.5. that's half of previously noted. is that much of what you've noticed of the young people of spain who perhaps have become tired of restrictions. >> yes you are right. the difference from the first break and this outbreak we are having now, one of the differences as you have said, this is affecting the young people they meet together and that is
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the riskthere. that's why the measures we have taken is to forbid the meetings of more than 10 people we have forbided to drink outside in public spaces, the beaches for instance before midnight we want to appeal to our young people to be responsible now, even much more than in the first wave >> that was the president of the region speaking to cnbc earlier. this morning, repeating some of the calls made earlier to young people to keep the social dancing rules. he compared the situation to the one in february telling people it is everybody's responsibility to keep the epidemic under control in the region. he said the local government
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wouldn't hesitate to take stronger mercede stronger measure telling citizens to not travel to catalonia following residents of france. earlier on the week to not travel to the areas. hoping to start a bit of its tourist season by exempting the canary islands and other islands but there has been a blanket rule for all of the country. they are expected to contract by 12%. yesterday, the data saying 1
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million jobs having been lost in spain. they were hoping for a little bit of growth. those countries advising and that could be a real blow for the economy. >> thank you for breaking down the latest and bringing us the best of that interview from the catalonia president. i want to bring you fresh comments out of hong hong kong q 2 gdp has contracted 9% on a year on year basis on the quarter-on quarter basis, it has contracted 0.1. saying they will likely constrain the export the recent have clouded on both
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the domestic front the numbers q 2 down 9% and down 0.1% quarter on quarter. coming up, the heads of four big tech companies are about to get grills crofakers accusing alphabet, miost, amazon and facebook of anti-competitive practices. look here, it's your very own all-in-one
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welcome back the federal reserve has extended emergency lending facilities until the end of 2020. the facilities were set up in march and april in a bid to stabilize markets and were due to run out in september. federal ee officials began the two-day meeting with a policy decision due out later today mark zuckerberg defended the
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acquisition of what's april and instagram. saying both apps use facebook's technology to stabilize traffic. this helped the social media giant's strategy after they were accused of trying to limit competition taking over other social media apps. due to test later today. >> from professor of management and innovation joins us now. professor, thank you for joining us again >> good to be back >> great to have you it feels like opinion is very divided in the tech community about how monumentious it is going to be today. >> i read a statement that said today is not going to be tech's big tobacco moment
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>> essentially all eyes are on them could they really represent a united front for the first time, it is not okay enough for one company to depend their position or whether that factor would deliver the benefit and present some kind of behavior whether facebook, google, microsoft, they all need to think about how they position themself in the public >> in terms of how lawmakers look at these companies and should they be thinking about a different way a more modern way to look at these in a different way as you suggested.
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>> these are the fixed hearings of these companies the regulator are pretty much looking at the consumer welfare. that is not april plikable to the world of digital economy once you write a piece of software, you can essentially reproduce your product free of charge they are really looking at a more advanced approach. as they try to kill off competition. is apple trying to kill off spotify. is facebook going to copy all the features from snap in order to stop the competition, rather
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than playing by the rules and acting fairly. if regulators are going to shift a new focus, then it has a huge implication to all the future earnings of all these big tech giants >> if you think there is a political desire or will from america and the administration to break up these tech companies? >> this is kind of funny in the situation. we think about 5-7 years ago, no regulator would dare to touch these companies. at the time, they were very cute and innovative today, people are really challenging this notion that they are simply a forceof good if anything, the likability of these have sank so low, regulators even politicians around the world are much more eager to take out their market
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position those are now moving to mainstream and will make or break the tech sector. >> an interesting point you make it feels like in these cases, tech would help itself >> coming to an ethical perspective. this hearing is about antitrust but do you think we'll see ethical questions around these companies and that mark zuckerberg will come under fire and do you think we'll see a change in tone from him? >> right looking at earlier this month, inside of facebook, still talking about the boycott is significant. the ramp up of boycott ads is tiny what is at stake here is whether
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the general public would no longer tolerate the stand by the ceo. you look back to the clapat thef the cryptocurrency it is not the lack of core competencies but the public and other banks that are skeptical whether we can trust facebook anymore. i always mention the right to innovate has to be earned. you cannot expect the public to just allow you to move fast and break things really the sense of purpose and calculation of social responsibilities. >> do you expect facebook to
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monitor hate speech? >> at this time, people are very unhappy about all of this fake news around the platform for other reasons the white house is asking the fcc to evoke some legal protection on facebook and twitter and the revenue growth would be one of the slowest across history with all of this pressure, i wouldn't be too surprised if mark zuckerberg would be attacked i am sure he would have conversation with tax ceo as well that they also need to present themself on a unified front. it is so interesting whether he would see the changed approach >> so interesting to see what they are putting forward on that
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pressure and how that might affect the way he speaks today at that hearing. i want your view at amazon, each of those is facing particular pressures of their own amazon is facing scrutiny for relationship with third-party sellers. what should we be expecting on that front >> the biggest contention here is whether amazon as a platform maker because they have the platform to allow third parties to sell because the amazon favor their own product push and using data to stock up once a category becomes hot. that is not unique to amazon they are known for those practices. the same for apple they favor their own app
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even google favors its own search result. is this the idea when you are a platform, are you even allow to participate anymore? in india, it has a shift of regulation this becomes again from a fringe k conversation to a mainstream debate >> you mention there, last week, apple released a statement depending the app store 30% commission >> it is hard to see apple radicily shift its pricing model. they are trying to position themself away from a one device company. all the commission from the app store becomes very important inside of the fees that they charge because they want to tell wall street, we are not just
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manufacturer per se. it is not just spotify but even camp base, which is one of these project management tool. there was one instance apple store denied their own app listed on the store because they also charged customer outside the app store. these are the practices regulators and lawmakers will scrutinize one of the potential outcome is that some of these anti-competitive behavior would be warned against and would potentially be outlawed going forward. >> thank you for helping us prepare for the hearing later today. professor at imd business school the number of coronavirus-related deaths in the u.s. has risen above 60,000. six states in the west reported
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a record number. the number has topped 4.3 million. >> telling cnbc he would not pass a billout including the measure. democrats are opposed to the bill >> there is no chance of the country getting back to normal without it as the majority leader, i can tell you no bill will pass the senate that doesn't have the liability protection in it the democrats need to understand for the country to get back to normal, we cannot have an epidemic of lawsuits on the heels of a pandemic that is not over yesterday that we are trying to get through. >> our nbc colleague tracie potts is joining us live from washington it feels like the democrats
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strongly oppose it where does that leave us in terms of reaching a deal >> it leaves us in limbo where we've been what we have new now is this republican version of the plan that democrats oppose. the democratic plan that republicans oppose what we need is some negotiation that is supposed to be happening this week, not only between lawmakers of both parties but also with the trump administration democrats are sitting down again today. liability protection is a big one for businesses another key issue for workers is unemployment insurance and unemployment payments that are running out in three days. everything else may run out on the back burner as they try to figure out the $600 a week payments or as republicans are suggesting to reduce them to
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$200 a week and get people back on the job the democrats oppose that. payments are running out on friday while talking, there seems to be no coming to the middle as of yet and what to do about all of that >> tracie potts, nbc news live in d.c >> let's take a look at wall street and how we are posed to open the trading session in the u.s. looking at a muted start all eyes on the federal reserve at the conclusion of the three-day meeting and also washington, d.c. in the big tech hearing. for now, that's it for me. "worldwide exchange" is coming up next. look here, it's your very own all-in-one
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entertainment experience: xfinity x1. it's the easiest way to watch live tv and all your favorite streaming apps. plus, x1 also includes peacock premium at no extra cost. this baby is the total package. it streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. yup, the best really did get better. magnificent. xfinity x1 just got even better, with peacock premium included at no additional cost. no strings attached.
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it is 5:00 in washington and here is your top "five @5. tech ceos to testify and are we in for low interest rates for years to come. the fed decision to come out this afternoon >> starbucks to rally. you have got to hear a new reports from moderna ove


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