that's all for this edition of "dateline." i'm craig melvin. thank you for watching. good morning and welcome to "street signs." i'm joumanna bercetche, and these are your headlines. equity markets nurse a new year's hangover at after the nasdaq suffers its worst daily drop since october. but we look at the worst of the pullback in early trade. maersk shares continue despite halting all shipments through the region until further notice. a senior hamas leader is

killed in a drone strike in beirut, raising fears that israel warns gaza could spill over into the broader region. and byd takes pole position over the final streak to become the best-selling electric vehicle manufacturer in the last quarter. good morning, everybody, and welcome again to "street signs." we're going to take a look at how the markets are faring. the stoxx 600 dipping in early trade, down a tenth of a per sejt, even though we did manage to start off. by the end of the u.s. session what we did get was quite a negative session for u.s. tech stocks. we'll get into that in a second, but that sort of set the tone for the first trade dagg of the

year. markets focused on a couple of themes, i would say. the first is rates expectations, rate cut expectations for this year. some of those expectations have started to get dialed back just in the last couple of days. the markets not so sure that the fed and e scb will go for a cutn this year. also weighing on minds is the geopolitical situation coming out of the red sea and the fact that maersk has now fully suspendinged shipping container ships through that part of the world after the drone strike that killed one of hamas's deputy leaders. a lot going on in the region that's going on. with the exception of the swiss index that's up 1.3%, the rest are trading mainly in the

red. xetra dax down a similar amount. we're down 0.6% and the ftse 100 trading around flat. remember, the ftse was one of the key underperformers. today we're trading around the flat line, but of course a lot of focus on the commodities sensitive sectors and today we're seeing a pullback in miners. this is how sectors are looking. food and bev up 1%. telco also up 1% as well. health care up. we have seen upgrades for gsk, one of the better performing stocks on the jeffries upgrade. on the flip side, construction materials down 1. 3%. cyclical basket tends to flip off. tech following what we saw in

the u.s. sessions. let's speak about what happened in the u.s. markets yesterday. this was the close. the dow ended up marginally so, about seven basis points higher, 25 points just above 37,700. s&p down about 0.6%. but then the main activity occurred in the nasdaq. the tech index pulling back 225 points, about 1.6% lower. you're probably thinking why. well, we had a bit of a pullback in apple yesterday. this is what we saw. this is actually -- not lying obviously, but the close yesterday had apple closing about 3.6% lower after a downgrade came through from barclays. they had downgraded the stock to underweight. there were lackluster sales of the iphone 15 especially in china. barclays also expects slower growth at apple's services unit.

so that really weighed on apple's stock yesterday. it weighed on the nasdaq. this morning you can see it's having an impact with european chipmakers as well -- not chipmakers but chip designers. they've been in the news recently, vis-a-vis the export restrictions to china. and then asmi also down about 2% as well. what you're seeing with the apple downgrade come through from barclays, it is a loved stock. the fact that this downgrade has come through is having a lot of ramifications for anyone in the supply chain and chipmakers as well. switching back to macro, the u.s. is hovering after kicking off the year with its best daily performance since march. now traders have started to pare

back. we'll hear from president tom barkin. i'm happy to say our guest is joining me. wonderful to have you with me. i'm going to start with something very data-specific. today we'll be getting the minutes of the fed meeting back in december. that was a real catalyst for markets. you know, it was after that meeting that markets really started soaring. we saw a huge fixed income rally, namely because it suggested they were pricing in more rate cuts for 2024. do you expect the minutes to date to be significant in terms of where the market goes from here? >> it could be. the problem with the minutes is that they're after the fact, so they always give the fed an opportunity to try to micro manage a little bit what the market is pricing now. since that meeting we obviously priced in even more cuts. we're now 150 total for the year, and the fed might seem that that's a little bit

excessive, so there's an attempt to roll back the markets. we did have a number of speakers before the end of the year that tried to take back some of that dovishness, so we'll just have to wait and see. to us the market looks excessive. >> you think it looks excessive. okay, even with that, reading through your re67 report, you have a long history with the u.s. and europe. if you think that is excessive, how do you square that out? >> we close it out just before year end. >> the timing. >> yeah. the woerry we have is it's clearly more than what our economists expect, either the fed or bank of england to deliver. number two, we have the pickup and supply that marks the year and the market is nowhere near set up as well to take on the

supply this time a year ago. this time a year ago, everyone was shourd. today everyone is long. it might cause some indigestion issues. >> it sounds like the easy money in fixed income was involved because what people don't realize is it's really tough to be short fixed income because the carry works against you, so how does one make money in fixed income? >> by being patient. it's one of those frustrating year ends where what we hoped to see play out has happened in time very, very quickly into year end and now we're now scratching our heads a little bit. there are a few views that remain. we think the curve in the u.s. will have to steepen, particularly in an environment where the fed cuts sooner than

later. they've brought forward the first cut. it's an environment where we could see risk premium rebuild along the back end of the curve. some term risk premium could come back. supply will continue to way. we still think it makes sense to be long europe against the u.s. the market, i think, is still wrong in pricing the trough for the ecb, so there's still some money to be made there. but, yeah, a lot of the easy moves have probably already happened. >> so let me unpick your thesis on the steepener. does that not only work on a environment where you have a soft landing? we get cut rates but not so much because it's a recessionary environmental. if it were recessionary, wouldn't you expect the curve to go back?

>> i dread to say this, the trade should work in both scenarios, which probably means it probably doesn't work at all. you would expect the fed to have to cut a lot more what the fed is pricing in, not how quickly, but how deeply they go. it's at around 3%. the fed will have to go below that. the fed thinks neutral is between 2 1/2 to 3 maybe. in a hard line scenario, they will think they need to stimulate the economy. they'll want to cut rates below that. you should get that traditional bull steepening of the curve. particularly we look at the premium rates despite the fact none of us know where inflation will land. the tricky part is the in between where the economy slows

down but not enough to get the fed to cut much more deeply. >> piecing it all together, it sounds like a trickery here. let me ask you about one other market. gi gilts. >> that's a difficult market to hang onto. we still feel that the inflation problem in the u is likely to be more inentrenched. >> we just had a huge downside surprise to the inflation price as well as inflpricing. >> the narrative that the market has jumped onto obviously is

we're seeing similar downsides across all three. we're not sure it can be s sustained like the others. >> fair point. ralf, thank you. i'll bring you on to see how things are going. now, sales volumes rose 2% in the four weeks to december 24th, according to data firm kantar. they increased their combined market shares while others saw its highest shares on the back of 9.3% sales growth. this is a picture across the uk retail and growth complex. pretty mixed bag, as you can see. one of the best performing stocks of last year.

switching over to fran. . the french i.t. company said it would open initial talks with airbus as it looks to restructure and cut its debt load. airbus's indicative offer involves up to 1.8 billion euros. charlotte joins us. some of that positivity has come out of the market, still up 1.4%. what do we know? >> it's been multiple weeks and multiplereports that we've had talks about bds. you look at bds's big data. it's very, very sensitive for the government. this time this is the first confirmation we're getting about these talks. they're opening this due diligence phase with airbus. they made an indicative offer between 1.5 and 1.8 billion

euros. it was back in march it talked about it. that sale with atos fell through. they brought in others in october. there were multiple setbacks. heavy debt. they talked about other discussions. there's another involved in the casino negotiations. all of this is happening. they're looking at a potential capital increase. they're assessing all these options through the first quarter of this year and it seems suv elkt for them to cover it all for that part. airbus in an email segment said this is at their discretion. it's at an early stage. no certainty about the agreement on this traction. that's after the acquisition of

eds that significantly accelerated the group. here it would be to convince them. we're watching this very closely. >> it's so interesting if it goes ahead that airbus are looking to buy the cybersecurity unit. thank you so much for that overview of what's going on. also coming up on "street signs" today, maersk halts all ships through the red sea after a series of attacks by the houthi rebels. and israel says what was behind the death of a senior hamas leader as they try to stop the drag on the war. we'll bring you more after the break.

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welcome back to "street signs." a story we're watching very closely, shipping giant maersk is halting all shipments until further notice following a series of attacks by houthi rebels in yemen.

there's been a similar statement issued that they'll avoid the red sea route until at least until january 9th. an interesting couple of days. it seems like all of their passage ships have been on hold. what do we know? >> in order to explain the story, i want to show you this map because it really helps you visualizing what's happening on the ground. in essence since late november, a group of militants from the em, the houthi group, they've launched attacks on commercial vessels that are moving across the red sea, and, therefore, we're hearing several companies that are now pausing this commercial traffic in the region

because of the security threat. maersk is the latest. i wanted to show you this map once again because it shows how much longer that second map is. there could be risks for price of goods. it's not just about trade. it's also about geopolitics and it highlights how there's been an escalation in the tensions in the middle east after that october 7th attack as well. you have to keep the gee polp geopolitics in mind too. the deputy leader of hamas

has been killed in a drone strike in southern beirut. state medadia reports the drone targeted one specific floor of the building killing at least seven people. the operation was a surgical strike against the hamas leadership but stopped short of cob fifrms responsibility. they have accused israel of trying to drag the country into the conflict. i'm happy to bring in the director. good morning to you. the immediate question is given that this is the first attack on lebanese soil outside the southern border since 2006 -- the first attack on beirut, i should say, is this going to open up another front in the israel/hamas war? >> good morning. well, certainly the risk has increased and this is the concern more broadly that the war will have spillover effects. we have seen over the past three

months what is considered as low level pressure from hezbollah and from palestinian groups in lebanon on israel. it could lead to a more decisive hezbollah response and that's what the israeli government is trying to achieve, to goad hezbollah into a more broader war but an untent to go after hamas leadership everywhere is indeed being that reality. >> i want to pick up on something you said there, which is about israel -- and i believe this is your language -- wanting to goad, quote, unquote, hezbollah into a broader war. is that really what they'd like to see? or is it their preference to

continue along with these very surgical strikes, specifically targeting hamas leaders that may be in very specific locations but not necessarily open up a fully blown escalation in another country? >> well, i think that the government in israel certainly calculating, anticipating, and being prepared for a broader confrontation, but the israeli government understands hezbollah its enemies and it's been there for many decades now. i think the anticipation that hezbollah will respond in a meaningful way is overblown. hezbollah is much more cautious as an entity, and while it strikes its own weakness, it's not going to respond in kind and that is what israel is very much anticipating. and looking actually through this attack but more broadly, the aims of the israeli

government and the idf are to try and weaken all of the proxies around the region in order to reinforce israel's security after october 7th. >> let me just ask you, my colleague was on talking about the attacks that had been taking place in the red sea. what sort of linkage can we draw on the houthi attacks on the shuping vessels versus what's happening now between israel and hamas? >> well, certainly the nonstate actors and the houthis answer the law as they call themselves are all linked together as part of iran's backed access of resistance, they're broadly aligned in anti-israeli anti-american posture, and the houthis themselves have been very animated by the attacks on october 7th and gaza and have taken upon themselves their ability to respond and show that

they also have a stake in this fight and see israel's aggression in gaza as really a broader beyond what's taking place in the west bank and gaza but actually has implications for the region. >> now, in terms of the region, even before yesterday's strike in beirut, israel has signaled that they were starting to withdraw some troops and forces, moving onto the next stage of the war, idf officials being quoted as saying this could be a very prolonged phase and a lot more targeted than what they were doing in the past. is this decision from israeli leadership in part a response to some of the international pressure that has been on them to sort of rein in and dial down some of the pressure in the last couple of weeks? >> certainly i think so. gaza is aware in the court of

international public opinion, they're playing a losing hand and they're very aware that president biden is turning away from full support of the war to serious encouragement, and whether this is optically taking place or this is just about repackaging the nature of the israeli operation in gaza will be, this is about retaining u.s. influence and being able to have the independence to operate and strike stay technologically as the israeli government would like to without being told by washington to shift the terms or they ultimately want to draw out and delay further pressure for a cease-fire. >> let me just go back to where we started. the leader of hezbollah is, i believe, still expected to give a speech. he was scheduled to give a

speech anyway. there was some speculation after the attack that the speech was going to be postponed but it looks like he'll be delivering the speech at 6:00 p.m. local this afternoon. we were in a similar situation back in early november, and back then there was a lot of fanfare around the speech. but he called short of a full blown escalation. are we likely to hear something similar out of him today or do you think this one, this attack on their own suburb territory within beirut is one step too far for their calculus? >> well, thinking back to the november speech, there was so much anticipation. it was a move-like premiere unleashed by hezbollah in the anticipation, and ultimately nasrallah showed he has a lots of rhetorical power, but it can't be met with the same military resistance that a lot

of people are anticipating as to how hezbollah might respond. i expect to see the same. hezbollah must be considered within its local context. the access of resistance might seem like it's coordinated and managed by iran, but the local context very much matters. the lebanese government, if you want to even call it that is very fragile. the lebanese economy has been teetering for years now and hezbollah, i don't believe, can risk its own existence and its position and support within lebanon for a broader fight with israel at this moment, so i think nasrallah will play the long game and be cautious as he the ends to be. he's a survivalist. i think the goal here is to survive. >> let me round up by asking you how you think iran are monitoring what is going on because, you know, there is a view out there from many of the experts that i speak to that if

iran and hesizbollah wants to i can late, they could have, and they haven't. they treat hezbollah with a proxy on the border with israel, very useful for deterrence. the question is whether they're willing to sacrifice that deterrence tool in the name of the hamas cause. >> firstly i wouldn't consider hesizbollah anymore. they're very much a partner, maybe a junior partner, but a partner with iran. iran gives all of these groups and all of these leaders autonomy within their local context. but you're quite right. iran and hezbollah have chosen not to respond because, again, they're being

self-presself-preservation ists. we've been seeing this over the past few weeks and of course with the killing of a leader last night, iran is also beset with economic weaknesses. let's not forget in september of 2023, another round of very powerful protests spread throughout iran, and the iranian government today has managed to restore ties across the region and is trying to benefit from done employee matic and economic engagement to buffer against u.s. sanctions that still very much overwhelms iran's economy. it hasn't really mobilized its troops for decades now. it did respond militarily to the i.s.i.s. threat in 2014, but beyond that, iran very much relies on proxy relationships as

you said to enforce deterrents. iran's ultimate game here is also to maintain security and stability within iran's territory and, of course, preserve the longevity of the islamic republic. i don't think it's going to gamble it all on the death of a hamas leader. >> so fascinating, sanam. thank you so much for coming on and giving your perspective. also coming up on "street signs," tesla meets its guidance of 1.8 million vehicles in 2023, but the shine comes off a little as byd overtakes the top ev maker in the final three months. we'll be right back.

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welcome back to "street signs." i'm joumanna bercetche and these are your headlines. equity markets nurse a new year's hangover afterthe nasdaq suffers its worst daily drop since october, but european markets were the worst to pull back in early trade. maersk shares continue to sale through the turmoil in the red sea, despite halting all

shipments to the region until further notice. a senior hamas leader is killed in a drone strike in beirut, raising fears israel's war could spread over into the broader region. and chinese ev maker byd takes pole position overtaking tesla in the file streak becoming the best-selling electric vehicle manufacturer in the last quarter. we had swlat of a weakish close to wall street yesterday with the exception of the dow, s&p, and nasdaq both ending the session deeply in the red. the nasdaq closing down 1.5%. apple one of the names pulling down those metered indices after downgrades came through from barclays. that's having ramifications

across somg of the asian markets, taiwan, south korea. we saw chipmaker pressure that's extending into the european market as well. as you can see, all of the indices trading in the red with the exception of the swiss index up 1%. all of the indices are in the negative territory. xetra dax down 0.4%. the foots sy which was briefly green in the morning is down 8 basis points. this risk-off mood picks up speed in europe. as we've been speaking about earlier in the show, a close eye on geopolitical developments coming out of the middle east as well. this is what we have today. mostly we are seeing dollar trading strongly. so this is in line with some of the last few weeks.

over the last quarter we saw the dollar lose some momentum. that changed in the last trading day. today, no exception. it's to the tune of 0.4% and then versus the pound as well. we're seeing somewhat of a weakness come through, but only to the tune of 0.8%. so marginal strength coming through in the u.s. dollar today. let's move on and talk about some inflation numbers coming through in turkey. turkish inflation rose to 64.77%. i think we can cansay 65%. that's slightly below expectations but slightly higher than november's readings under 62%. right behind me, we've got a picture of the turkish lyra. again, it continues to move upward, and we saw that big jump last may, but on the year it's

still up 60% if you take where we were at the start of 2023. we continue to see weakness. switching over to fixed income, what we had yesterday is as markets started to pare down expectations, it's still higher. you can see all of these european fixed income instruments are trading at higher yield terms. yesterday we had the ten-year treasury up five basis points. today, three basis points. 2 y-year moving as the market starts to price out the possibility of rate cuts as soon as march. we were looking at almost the certainty of 100%. now we're looking at 80%. that has affected front end

pricing. in terms of equities. this is how u.s. futures are set to open today with the risk-off sentiment. all of the three majors are seen opening down, so s&p, dow, and nasdaq, all of them seen opening up in negative territory. we have fmc minutes coming up later today as well as the j.o.l.t.s. job openings. tesla reported almost 485,000 deliveries in the fourth quarter. it had 8 million deliveries over the full year. it with us overtaken by byd in the fourth quarter selling 521,000 batteries.

meanwhile others declined. i'm very happy to say that our next guest joins me. good morning to you. >> good morning. let's start off with the media picking up on the news. tesla is no longer the largest manufacturer of evs, at least for the fourth quarter of 2023. how significant is that beyond the big headlines we've been reading? >> i think you've got two companies in very different stages of their growth profile, right? the big expansion project with the model lineup of tesla are basically done. we're now waiting for the cyber truck to ramp up and potentially a refresh on the model y this year, but there really isn't a big vacuum driver in tesla's portfolio in the coming months. byd is pushing the pedal to the

metal. there is a lot more growth in the byd story in the next 12 to 24 months for sure. >> to what extent is this a china-specific story? is this about tesla losing market share in china, or is there going to be more competition globally in other markets as well? >> yeah, we think it's more global competition and more specifically we think that chinese oems and byd among thefts will push into europe, which is great for european consumers and more into southeast asia. we're only starting to see that with byd also considering building a physical production plant in europe as well. >> what does this mean for european automakers, daniel? again, there's been so much conversation about the strategic importance of e ve automakers

and they're looking at imposing tariffs on chinese ev makers, but i wonder. at the same time european automakers are behind ev. >> i think we've got a couple of conflicting goals here. they have very aggressive cli climate goals. they need vehicles fast and that's something only the chinese can deliver at this point. >> very fair point. what do you think that means for the global ev market in terms of competition? where are the cars going to be sourced from? is it going to be china winning that race? tesla, i.e., u.s., or europe?

>> the million dollar question. i think at this point in time it's unique because for the first time, they really have a chance of market shares. we see them being slower to go into electric vehicles. the new companies will grab shade, but it's a policy fairly well understood. they're getting a lot better in their electric technology. and so our view is the incumbents will lose market share. they'll have to give up market share, but by and large this will return. it's much more about brand ing

consumer connection and the auto cycle. what about pricing? last year it was about tesla cutting prices on some of its major vehicles. how is that translating to the sector as a whole? again, one of the criticisms of the ev market is as of now, evs are -- they tend to be more expensive than their ice equivalents. is that going to change? >> yeah. i think it's going to disappear within the next 12 to 18 months because as you say, the affordability for consumers on evs especially in europe and the u.s. is appalling at this time. the tesla price cut was really interesting because it helped them maintain volume momentum, but it didn't grab asmuch market share as you would have imagined. what it's also done, it's been tough on the residual values and

you've seen businesses spinning tesla carses out of their fleet. i don't think tesla did itself too many favors. >> daniel, thank you so much for coming on the show today. and for much more tech coverage be sure to listen and subscribe to our recently refreshed podcast "beyond the valley" wherever you get your podcast and by scanning the qr code on your screen right now. coming up on the "street signs," we'll be delving into the political landscape with the all important iowa caucus less than two weeks away. we'll be right back.

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donald trump sues after disqualification from the maine primary ballot. trump is also expected to appeal a decision by the colorado supreme court to bar him from the ballot there too. now, trump is in pole position to secure the republican presidential nomination with a massive lead over his nearest challengers in the gop polling average. the iowa caucus will be a key test for rivals including florida governor ron desantis and former south carolina governor nikki haley as they look to secure their position as the main challenger to trump, but still very far behind the polls. great to have you with us on the show. >> great to behere. >> let's start off with the initiative of the iowa caucus

primaries. how are they to move the needle at all? trump's lead is so far ahead. >> all the cases against him, all the bars from maine and colorado and the primaries seems to rebounding back to him in very positive ways, so i suspect this is going to kind of clarify that particular position, but i guess the other contenders, nikki ha i will, ron desantis in particular, we'll see how they fair as well. >> let's get back to what you said about colorado and maine banning trump on the ballots. of course, he's appealing. there are other states looking to file a similar motion. how significant would that be? if it's one or two states, i get that it may not impact. if you're looking at ten states or more, obviously that will impede his chances of becoming a nominee because he simply can't get enough delegates. >> you're right, and this is

unprecedented and it could be that if he is removed from the primaries ballot in tand later the general ballot, trump may boycott the elections altogether. it impacts american politics and society as well. we're going into a big year in which there are many, many elections in many countries and they impact on the united states as well. i think the volatility that the election year bringsing about is going to only increase as a result of these kinds of cases, the barring of various things and call into question the u.s. supreme court. >> and the sanctity of the u.s. supreme court. just one question about the other contenders. what do you think ron desantis and nikki haley are playing for here? do you think they're confident? they'll say on air they're

confident they can be the next presidential candidate, but isn't part of them playing into being the vice president at this point? >> nikki haley has been moot about it. there's a strong showing that one of them might be on that particular part of the ballot. it's difficult to know. donald trump will make his own particular interests based on his own interests. coming from north carolina, florida, big states which are -- north carolina being a swing state as well, i think it could well be a very important decision going into november 2024. >> earlier on you were saying no matter what happens it's set up to be a factious year. and we know it's going to be a bumpy ride for u.s. elections into november. we've got multiple court cases to get through. four indictments, two civility cases being put against president trump as well. there are still a lot of hurdles

to get through until we get to the final milestone which are the november elections. what is your level concern about how this plays out and the democratic process in the u.s.? >> i feel particularly since 2016 effectively has been undermined. in european terms, it's been to the far right. in the united states there are only two political parties. in most european countries, there are many parties. what we have is effectively one party, half of the party system, which does not now commit itself to recognizing the results of the elections especially if they lose. so what is really at stake is there going to be a peaceful transfer of power, whichever way the election goes.

people are writing books in the united states about the possibilities of civil war inside the country. >> we don't want to see that happen. let me round up with a bigger question. we had our colleague on the show yesterday talk about what a big year it is, you look at taiwan, european elections, russia. you can't really call that an election. how pivotal are u.s. elections going to be in the context of all of these other elections taking place this year? >> the u.s. elections stand as pivotal regardless of all the others. they have regional consequences and so on which obviously the u.s. is a regional power, so it's affected by all of them. the key thing i think is in the end it's the usa which is the pivotal power in the world regardless of all the realign

managements or dealignments going on. it's so essential to so many domains and sectors of the global economy, global finance, global security, global institutional architectures, the role of the dollar and so on. there's a saying in india which says when a big tree falls, the earth shakes, and i think that's probably an understatement in regard to the united states' position in world order. >> if president trump comes back, if president biden stays on, it will be more of the same if the other side concedes. >> in 2020 the national guard was deployed when the speech was made. i'm not too optimistic in how this is going to play out. >> oh, dear. we're going to have to round out the show on that note. we'll have you come on during the curse of the year to discuss this some more.

let's take a check at how european markets are trading. we have all of the indices trading in the red, 1.1% lower. i think we can safely say that the center rally that started toward the beginning of december is now over. it has not been a good couple of days to the start of the trading years for the european markets. u.s. futures seen opening up in negative territory. all of the majors seen opening up in the red. keep an eye out for fmc minutes as well as the manufacturing numbers. that is it for "street signs." i'm joumanna bercetche. "worldwide exchange" is coming up next.

it's 5:00 a.m. at your cnbc global headquarters and here is your "five@5." tech comes off of its worst day since october. a being part of that story, of course, it's apple. seeing its worst day in months, apple's weakness alsodragging down some major old markets overseas. also in the red sea, global shipping giants extend their pause in the region as investors warn of risk-off strategy. and why stev