tv The News With Shepard Smith CNBC August 9, 2022 4:00am-5:00am EDT
that's all for this edition of "dateline." i'm craig melvin. thanks for watching. [theme music] good morning welcome to "street signs." i'm joumanna bercetche. >> i'm julianna tatelbaum. these are your headlines >> european equities struggle with the key u.s. inflation report the fbi raids trump's mar-a-
mar-a-lago's estate. covid lockdowns a day after beijing locks couns tourist hott and slips reverse after a second quarter loss. good morning welcome to "street signs." let's check in on markets. definitely heading into the august lull and trading months that happen this time of year. markets were positive. chinese equities moving into positive territory again, capped by fears of geopolitical tension with the west and u.s. specifically and covid breakouts. that is capping the movement today, the picture is negative after positive session
yesterday. the stoxx 600 dipping .30% in early trade. we are getting corporate earnings we'll get into some of those during the course of the next hour for the most part, investors are watching for tomorrow's cpi inflation report which is a key indicator for investors if the fed is getting ahold on the inflation. let's switch and you can see the ftse 100 trading on the flat line not doing a lot over here. although iwg is major under performer today. that stock down 15%. it is dragging the ftse 100 down cac 40 in france is down dax is down as maker is down and the ftse mib is up .80%.
in terms of sectors, this is the breakdown by individual baskets. you see right at the bottom with more high data sectors tech down ..80% this is the knock on the tech performance in the u.s. pulled down by nvidia that stock down 6 points down. pulling down the index travel and leisure down. basic resources down 1% as well. at the top, insurance up .40%. banks having a good day today. watching what interest rates are doing closely. as for commodities, this is the picture for wti and brent. down 1.1%. very interesting couple of weeks for the oil complex. of course, we continue to grapple with supply on one side with opec plus delivering an
increase of 100,000 barrels. demand is another key driver going forward. what happens to the state of the global economy and one other thing to add to the mix which is interesting is yesterday the eu revived teches to look at potentially signing the iran -- not iran nuclear proliferation deal which was stopped in its tracks by the trump administration a couple of years ago. that could mean new oil could come to the market something to keep an eye out if you are watching the commodities. julianna >> it would be fascinating to see revival of the deal. yesterday, a piece of good news in the u.s. consumer inflation expectation dropped sharply. federal reserve could loosen
their grip expect inflation to run at 6.2% in the next few months and 3.2% over the next three years. historically high, the figures show a market decrease from the expectation with the drop in fuel and expectation of food and housing will also cool investors will look for a sign tomorrow after the interest rate hikes from the fed. the figure for july is expected to point to annual rise of 8.9%. down from june of 9.1% we saw the first six months of the year and now private equity giants have all reported declining as ssets in the second quarter results coupled with rising interest rates and the higher inflation environment i'm happy to bring in the head
of private research. good morning, dillon we have spent the last few months reviewing the bank earnings one key take away is the big dry up in capital markets activity there hasn't been a lot of deal make in the first half of the year compared to the first half of 2021 when it was the major theme for public markets let me ask you how the landscape is looking for private markets do you see activity there starting to dwindle a little bit? >> thank you for having me on. to abse to answer your question, question private equity or venture capital, the deal float is languishing. you can point to a number of factors why that is the case private equity is harder to come by direct lending fund have filled that gap the high yield bond and low leverage markets have been more
difficult in last few months it will add the pre-ipo portfolio have been hit hard by the tech sell off. i think deal makers are more cautious in general. >> we actually are just putting up a chart of rates of return here it los looks as though the prive equity is leaning toward positive territory how long will it take before the stock market rout we had before we see returns >> it is important to note we he are coming off the best year for private equity returns about 46%. preliminary numbers show that figure to be about flat. maybe 1% or 2% in the first quarter. we don't have data for q2. we can take signs from what we see in public markets.
data shows private equity returns in the s&p 500 have squared about .7. we can expect that private equity fund returns are market-to-market returns will follow that of public markets in the first couple quarters of the year that being said, i think deal makers will use that as a signal to pick up and be more aggressive especially when it comes to take private transactions some of the best performing vintages in private markets are those that began investing in a down turn. from 2001 to 2003 and 2008 and 2009 >> dylan, let me pick up that point of privates. 2021 was the record deal private equity was sitting on record amounts of dry pouwder
you see that as an opportunity for private equity firms when could we expect them to deploy the capital you talk about potentially investing after a down turn. when is that should that be what we expect? >> it is hard to know for sure look for volatility dampens a bit. i would keep an eye out for what form those take. in 2020, when covid hit and we saw the selloff, we saw structured deals and preferred equity from firms like si silverlake who saw that as an opportunity. i think you are likely to see similar deals happen this time. even if it is not full on privates private equities will get involved >> dylan, when it comes to the investor side of private equity, typically they have been prime
shareholders in the funds. you are increasingly seeing private equity turn to other investors and individual investors. you got places like moon fare popping up which offers individual investors to invest in private equity funds. how do you think about that market and idea that private equity is trying to open up to possibly less sophisticated investors given the nature of the deals? >> there has been a years long move to the retail or the high net worth market blackstone and some of the publicly traded asset managers have telegraphed strategies to open up potential fund raising to a larger client base. that being said, i think institutions like sovereign wealth and family offices and so forth, those will account for the bulk of fund raising space
get back to retail there is a push even to open up private equity allocations in defined contribution plans 401(k)s in the united states there is a huge regulatory hurdle to make that happen at scale. individual investors missed out on a lot of the gains seen by private equity and venture capital firms. it could be a plus for investors. >> interesting topic dylan, thank you for joining us for the conversation dy dylan cox at pitchbook. federal investigators received documents from the
ma mar-a-lago resort. allies of the former president have criticized the search that the fbi is a political instrument the white house was not given a heads up before the search was conducted. joumanna, this feels like this could be a big story details are thin at the moment to my mind, why it matters most, could this affect former president trump's decision to run in 2024? >> could it impact his ability to run at this point, anything we say would be akin to speculation we have to see what the results of the raids are what i thought was interesting from all of this, julianna, is the republican party as a whole rallied behind donald trump in the last couple hours. you had the my minority leader
mccarthy who said they will investigate the justice department should the republicans take over the house in november. that is one interesting point to watch. also the frontrunner, another frontrunner for the republican leadership, ron desantis attacked the search. calling it another weaponization against the regime political opponent it tells you despite everything that happened and the investigations into the january 6th capitol riots, the republican party is very much the party of donald trump. >> it is a fascinating timing with the midterms around the corner and the republicans facing a serious question now as to whether they do continue to rally behind him or not and implications could be tremendous on to some geopolitical
considerations ta taiwan's foreign minister accused china of looking for executions to conduct military exercises including u.s. house speaker nancy pelosi's visit in the region in response, taiwan held live fire military drills on the southeast coast. officials said the exercises were being held to test its combat readiness in response on to any potential threats president biden was asked if he was worried and if it was wise for the speaker to visit the island. >> i'm not worried, but i'm concerned they are moving as much as they are i don't think they will do anything more. >> was it wise for the speaker to go to taiwan? >> it was her decision china enforced new lockdowns in the region of tibet they locked down the largest city after 18 covid cases were dis discovered elsewhere, tourists are
in lockdown in hainan as authorities try to limit the covid outbreak sam has this report. >> reporter: they are carrying out mass testing with the worst breakout so far. hainan recorded two symptom atic cases last year, but has seen 1,500 direinfections this month alone. transport has been suspended this comes as china has been relaxes travel rules in recent months as it battles more var variants hainan is coming at the peak
season of the height of the summer holidays. thousands of tourists have been left stranded. the gambling area has been shutdown after one case was found to have had covid and comes days after macao reopened casinos and dining in restaurants. the two areas in china are under scoring the uncertainty around dynamic zero covid and whack-a-mole approach. in singapore, i'm sam badas, back to you. chinese car sales are recovering as production ramps up retail sales jumped 20% last month according to the china car association. new energy car sales doubled to almost half a million. tesla sales fell by 2/3 to
as promised we detail what we heard from coulntinental. the german auto parts maker is optimistic production will pick up in the second half of the year as supply chain stabilizes. speaking earlier this morning, the cfo told cnbc the outlook is not totally without risk >> we always said we expect quite significant headwinds from the total about potential of $3.5 billion impact from the cost of inflations that are out there. this is still exactly what we put as basis when we set out
d guidance looking at dguidance, we will have a stable supply in germany for the year if that should change, this might have impact. on the other hand, we are getting ready and prepared to look at alternative supplies beyond gas. and elsewhere, ihg doubled in the first half to $361 million. the holiday inn owner resumed dividend payments and $500 million share buyback program. stock is down 1% point on the news. in other stock we are looking at closely negative in trading. iwg posted a 22% boost in revenue with total sales of $1.31 billion pounds however, the stock is taking a bit of a beating
speaking to the colleagues earlier, the ceo said iwg has benefitted from one work space trend in particular. >> my people and company allows companies to cut costs 50% less fixed costs on the balance sheet and it's what the people want it is here to stay andgrowing fast you can see that in our numbers. the underlying number here is like for like $260 million in positive cash flow in the first half that is the best result we had since pre-pandemic times we've chosen to invest in more accelerated growth which we are doing in partnership and we are growing quickly to keep up with the demand in particular, outside of the big cities in the suburbs and countries. that is where people want to
work now german munich reported a fall in the second quarter after the exposure to russia the company confirmed the share target of 1.4%. and the british insurer said the strength and direct investment units beat market he can pecexpectation. the ceo spoke out. >> they are finding life difficult with food and fuel prices going up. and a horrible background as people struggle to pay bills i think it is a time for looking after customers and colleagues
that work for us and putting those people first we have a particularly resilient model. resilient for the last decade producing 8% to 10% growth year after year you know, we look at the business over a long period of time you know, we are not trying to make short-term tactical profits. long-term sustainable profits from our business. jpmorgan chase says cryptocurrency has found a floor as bitcoin and ethereum rebounded from june lows cryptocurrency has been trading for more than a year kate rooney has this report. >> reporter: july has this relief after nine months of downward pressure. jpmorgan chase thinks the bottom is in for cryptocurrency a note to clients today highlighting limited contagion
of terra luna and ethereum they say prices in trading volumes are still depressed, but it appears the cryptocurrency markets down a floor bitcoin prices reclaimed two levels above the 200-weekly moving average and back above the cost basis for investors. $24,000 is the average cost that investors paid to buy their bitcoin. according to data firm glassnode. activity suggest there is little influx with new demand a rally in tech stocks as well ethereum has been the big winner in the past month. crypto stocks are rallying more than bitcoin coinbase on a tear after a partnership with blackrock there has been a short squeeze
playing out. last week, micro strategy robinhood getting a boost in recent weeks and the crypto mining flamnames are the bigges winners. all up more than 50% on the month. still, plenty of headwinds high profile hacks weighing on consumers. the u.s. treasury department banned all americans from using the service tornado. tornado has really been industrial in a handful of high profile hacks this year. the s.e.c. has been cracking down on unregistered investors are watching that and inflation number on wednesday with the bullish narrative >> a good couple of weeks with crypto in global stocks. i think what is interesting here, julianna, the fact that
institutional investors and big names we look at with the like of tesla, obviously, and micro strategy, because they were involved in the large amount of bitcoin. both institutions have posted declines of up to $1 billion paper losses on their bitcoin holdings the question for me is, yes, maybe we found a floor around $24,000. i thought it was interesting in the jpmorgan chase piece that they say the average cost of getting involved in bitcoin was $24,000. for it to go back up to $50,000 or $60,000, you need to have the buy in from the institutional accounts why would an institutional investor get involved with the volatility >> there seems to be a really important difference with bitcoin finding a floor and bitcoin bouncing off that floor. you mentioned losses that tesla suffered
tesla offloaded the bitcoin holding. perhaps that is part of the jpmorgan chase call with the major holders of bitcoin which sold out of bitcoin. there is not that risk of further major selling here speaking to investors on the program, i'm sure traditional asset managers are not keen on investing at lower levels. we'll take a quick break the cost of living taykes center stage as an the race to replace boris johnson heats up
welcome back to "street signs. i'm julianna tatelbaum >> i'm joumanna bercetche. these are your headlines >> european equities edge lower with value stocks struggling ahead of wednesday's key u.s. inflation report. the fbi rates former u.s. president trump's mar-a-lago estate chinese authorities impose covid lockdowns in tibet a day
after beijing locks down the hot spot of hainan and continental in reverse after the second quarter loss, but sees production picking up in the second half it's a fairly muted start to trade this morning let's look at where the boards stand. we have fairly flat trade for the ftse 100 up 7 points. cac 40 trading at the flat line. we have a little bit of red on the dax down .30%. continental losses and slipping in rehe vverse as they had a sed quarter loss green for the spanish market up
16 points. i would expect investors are holding tight for the u.s. inflation report tomorrow. this is the picture for currencies dollar on the back of sterling sterling up .30% we have the euro trading firm against the dollar .30% as well to 1.0230 okay let's talk uk politics uk foreign secretary has come under fire for the economic plan with the deputy prime minister dominik rabb trust has favored immediate tax cuts as a way to help voters with the soaring cost of living. he indicated he would take the
miss measures further. uk prime minister boris johnson said any large decisions will need be to taken by his successor next month the cap on utility bills is projected to reach 4,200 pounds from january this amid inflation and recession, the bank of england says will last more than a year. the bank of england is likely to raise rates and sell bonds if an economic down turn forces it to slash interest
rates. nigel wilson and mark dixon told cnbc about the potential impacts rece recession. >> people are finding life difficult with energy prices going up and food prices going up and a horrible background for many people as they struggle to pay their bills. i think it's arizon time to loo after customers and putting people first >> in my boat and experience, recessions are about planning for the worst case and trimming your business. making sure your business is operating in the most efficient way possible in spite inflation, we reduced overhead and our costs at center level which is unprecedented, i think. that is because of focus you focus on being efficient and
focus on the opportunity >> john curtis at the university of stathclad is joining us now thank you for being with us. in terms of the tory contest, it looked like sunak was the frontrunner, but now changed what do you owe the success of long liz truss? >> it is no doubt that sunak started as the frontrunner because of the fear of peej who w were contesting the field. as the field was narrowed down and they managed to get the last second place in the last round of tory mps.
that was first advantage beyond that, what liz truss has demonstrated is perhaps more of the talent to tell a narrative about herself and about where she wants to take the country than sunak has been able to do she has been effective in suggesting she was an ordinary girl from an ordinary background where has other opponent went to a posh public school her father was a professional of mathematics. the point is, she was able to tell the narrative that has proved she is regarded as somebody in touch with ordinary people meanwhile, she has undoubtedly has a story to tell. the conservative party went into the contest with a great deal of anxiety as the right center party finding itself in the
uncomfortable position of presiding over and projected to continue over record high levels of taxation and spending that indeed was the dominant issue during the campaign. ms. truss grabbed that issue and said i'll cut taxes. that hit mr. sunak's difficult point. that may be his aspiration presiding over the record level of taxation and spending the truth is ms. truss' tax cuts as we discovered in the campaign would not have been adequate to deal with the cost crisis. they would not help those at the bottom of the income scale it very much during the course of the campaign, that has been the issue. we can argue a gap between her narrative. she has dominated the agenda and
campaign mr. sunak has been trying to challenge her by coming up with intellectual arguments why she might be more. without himself telling the story about what he wants to do, he can get voters interested >> can sunak do anything to turn his fortunes around? >> the truth is, i think it is going to be very difficult he has some attributes that they he value he has been prime minister and is likely to be competent. we saw in the debate on sky news, he can sometimes in the eyes of people prove to be more quick on his feet in debating than ms. truss unless he can start to begin to tell a consistent story about
himself and country, he will be in trouble he made comments like yes, i will do something about giving people more money. we're now six weeks into this campaign and only now is he beginning to say this. even then, of course, he is constrained by the fact we can't al allow the public finances condemn inflation. i think this will not help mr. sunak and i don't know, but i hope we will find a bit of gain. even now, mr. sunak in response to what ms. truss' weaknesses is still not telling us the narrative of a policy.
>> professor, one other question i'm interested to hear your thoughts on is what extent boris johnson, the current prime minister s a looming figure over this leadership contest and in what way has he helped shape or determined the direction of travel and is being seen to be sympathetic to the prime minister, in this case, it would help you be viewed more favor bring by the tory members? >> there is no doubt whether or not mr. johnson should have been brought out and in the way he was brought down is an issue for some tory members. the truth is when polls were being done on july 6th or 7th when mr. johnson was brought down, even among tory members said he should resign. that said at the moment, the polls are saying, do you think it was fair that the way mr.
johnson was brought down, on balance, tory members said absolutely not mis missi ms. truss is favorable people are not happy with the way he was brought down. it was sunak's and several others that precipitated the rest which forced mr. johnson out. for those people who felt mr. johnson shouldn't have been brought down, mr. sunak's role has made it difficult for him to appeal to that section of the conservative membership. >> clear professor, we will leave it there. tho thank you for joining us john curtice also coming up on the show, after successfully backing
welcome back to the show pris private investment firm mcwin raise money for the new restaurant funds mcwin will use the money to invest in digitalization and expansion. the portfolio includes the pasta chain vapiano and impossible foods. i have to say henry mcgovern join us us on the show why is it a good time to invest in the foods business? everyone talks about the cost of living crisis and food inflation everywhere why do you want to invest in the business right now >> first of all, good morning. thanks for having me on.
pleasure there's a ton of things happening on the food side d driven by the intersection with technology and food. obviously it was already under pressure with a lot of change in the industry moving to organics and moving to better for me feeling that was needed in the world. then came the horrible war in the ukraine and created so much more pressure on the food chain system my last business, i was in the restaurant business for 26 years and over 2,000 restaurants we actually did a lot of production as well i saw first hand what was needed in the change. we have the population growing by another couple billion people the next couple decades. there is pressure everywhere in technology, what will solve that you have the whole animal and environmental issues at hand there is another push for change there that has to happen for the planet to be able to deal with
it and health of the food we eat. there are all these things going on at the moment certainly the inflation right now is a challenge pretty much for everyone in all sectors of the industry whether you look dp grocery or restaurant or cooking at home. we are all seeing it it is substantial. we are seeing commodity prices come down. this is a longer term view at mcwin of what needs to change the food supply. we know the food supply system is broken and we know there is an opportunity to improve the food we eat. we are excited with the opportunity. >> you are selective of the companies you choose to work with you set a minimum equity of $100 million. why a high hurdle? >> because there are two different kinds of businesses in
europe europe is different from asia or the united states. a lot of food companies have stayed country specific and regional you have a lot of country euro that get to a certain scale. there are certain ones which crossed borders, very few, but we have. we see a different dynamic in the companies that are ready to cross borders and ready to move into segments. those are the ones we are targeting with the fund. we were in 26 countries with the last company we crossed with ten brands that's where our expertise lies. we want to help companies how do i cross borders and scale and put more digital in the business model. there is a select group that can do that across europe. >> henry, fascinating to get that insight into your investment process and where you see the opportunity here
dive deeper if you could into the opportunity that comes from digitalization we are seeing all over london with an example of the implementation of the kiosks where you can do virtual ordering just how impactful is that d digitalization for the restaurant's bottom line >> huge. we see labor on the delivery side and execution side. you think you are taking human touch out of the restaurant. that is true to some degree, but when you get systems in place, you improve quality. you improve the ingredient side. we look at it from the production side with technology with huge benefits coming in from cultivated meats and protein execution at the fermentation side.
at the restaurants, it is a speed of service and labor savings side i see in the kitchen more technology improving less waste,es et cetera >> i see the mcwin portfolio includes impossible foods. there was excitement around this company, but now there is concern we may have reached peak demand for the plant-based alternatives what's your take >> i don't think so at all we actually favor the fermentation and cultivated meat side rather than plant based that is more ip on that side of it from the investment plant based is here to stay. we see new companies coming in i'm trying products that are sent to us the evolution in the quality of
taste is significant i think you will see this blended world in the next five years where there is cultivated and traditional and plant based. people will be running recipes with a mix of those which is going to drive demand. there is no question that there is a huge amount of societal demand to change the way farming is done. i can't believe we will see growth in traditional animal fa farming. we need to get rid of factory farming. that stays static and demand growth is in plant based and v cultivated no way in my mind do we see peak today or -- it may slow down slightly in the percentage growth, but absolute terms, this is a market that will continue to grow. >> fascinating interesting color with plant baited and cultivated meat that is vernacular that not
everybody is familiar with henry, thank you for your time henry mcgovern. let's get back to the top story in the united states fbi raided the mar-a-lago home to execute the search warrant. we have susan mcginnis with more susan, details are thin. what do we know about the raid >> reporter: information keeps on trickling in. what we know about the unprecedented search is it appears to tie to classified information documents and records that the former president took from the white house and brought to mar-a-lago when he left office. the national arrchives retrieved 15 boxes of information from mar-a-lago and asked the justice department if the handling of
the records violated any law that's where we are with that. the president coming out with a long statement saying his home is under siege and raided by a large number of agents who broke into his safe. supporters lining up for the president last night outside his mar-a-lago home here on capitol hill has well. some of them promising investigations into the attorney general merrick garland wanting to know the grounds for the search protesters gathering and really the protesters came out on both sides of the issue one person for those wondering what trump's political motivations are now. it depends how this turns out. there is a presidential records act if the former president is in violation of, he would be unable it to run for office again. >> massive implications for 2024 susan, thank you for breaking it down for us.
susan mcginnis, nbc news. investors looking for signs of peak in inflation stateside tomorrow after two interest rate hikes from the fed july is expected to point to a rise of 8.9% down from june's figure of 9.1% let's look at u.s. futures and how wall street is shaping up ahead of the report tomorrow here is the picture for wall street all three of the majors are pointing to a firm start to trade. no major moves joumanna, investors are in a little bit of a holding pattern. >> i want to flag something i thought was interesting. i retweeted it on my twitter account plugging our twitter account. it was posted by our colleague saying the response to the monthly consumer survey now expect inflation to run at 6.2% over the next year and 3.2% over
the next three a big drop from where they were before at 6.8% and 8.6%. inflation expectations have started to drop. that is a key kindicator that central banks like to look at. because those have started to drop, you could say the fed is gaining credibility in the fight against inflation. >> jim reid highlighted that from deutsche bank as good news. >> quote/unquote a quick look at european futures. it is a mixed bag as we hand you over to the u.s. show. that is it for today i'm joumanna bercetche. >> i'm julianna tatelbaum. "worldwide exchange" is coming your way next.
it is 5:00 a.m. at cnbc global headquarters. here is your "five@5." breaking news overnight. the fbi searching the mar-a-lago residence looking for classified documents taken from the white house. we have a live report from washington coming up. china extending military drills around taiwan indefinitely as taiwan pre-he pairs for live fire exercises today.