no, she's home. that's all for this edition of "dateline." i'm andrea canning. thank you for watching. [theme music] ♪ good morning. welcome to "street signs." i'm joumanna bercetche and these are your headlines. european markets break the new year losing streak with all majors trading in the green and brushing off rate cuts from the fed minutes. recession concerns rise across europe as pmi data shows service sector actctivity in france and germany is a concern. and jd sports shares slashes

the profit forecast on concerns of the consumer spending. and oil prices spike with markets on edge amid supply restrictions through the red sea and tighter tensions after the bomb attack in tehran killed almost 100 people. good morning. let's get straight to the pmi final manufacturing number i was talking about. it is not just the manufacturing, but the composite number for the eurozone as a whole. it has come in at 47.6 against the 47.0 flash estimate. we see an upward revision to the estimate. it does show some parts of the

economy are actually faring better than what we previously anticipated back in december. as for the services split, we are seeing the eurozone services pmi at 48.8 against the november print of 48.7. again, we continue to see that this number is below 50. that signals an overall contraction. anything below 50, as we have spoken about many times on the show, shows the activity levels are pointing to contraction as we have been discussing. in terms of the individual countries, these came out a short while ago, for germany, pmi at 47.4 against the flash estimate of 47.7. france with the final pmi at 44.8. higher than the flash of 43.7. the italian one close to unchanged versus where it was

before. most of the composite numbers are coming in higher than exp expected. you remember the other day, we he had on the pmi side of things, the numbers came in higher than the estimate. that is why we see the downside movement in the services numbers this morning as is what we are the final december pmi data. i want to bring you the latest from germany. bavaria. the december cpi has come in 3.4% year on year. this is higher than the previous month at 2.8% in november. bavaria is surprising to the upside. we had numbers from the northern area which came in at 0.1% on the month to month basis.

still in line with expectations. as for other reasons, the soxony region at 3.4% year on year against 3.9% in november. moving higher from the month before. in terms of month to month, plus 0.2% in november. another state to look at is brandenburg is coming in at 4.5%. i would be listing all of the german states and each is important with industry and where many of the big blue chip german companies are located, but overall, we are seeing an upward surprise to some of the state inflation numbers from germany. that explains the uptick in the euro. if you take that alongside the upward revision with the flash pmi in december and the surprise in inflation, no wonder we see

the smaller uptick in the currency. as for stock markets as a hole, whole, you see trading in the green. the s&p seeing two back-to-back declines from the first and second trading day of 2024. not a very good start, but it is early days. stoxx 600 is bucking that trend and trading nicely in the green as we discuss the macro data with the pmi numbers and inflation numbers and corporate stories. this is the price action with the individual boards. most are leaning to the green. ibex in spain up .60%. the italian index, milftse mib, up .40%. on the ftse 100, it is up .60%. we are seeing an uplift.

within the ftse 100, a lot of stocks we want to talk about in the retail space next with jd sports. we will talk more about that in a few moments. in terms of sector leadership, this is what we have this morning. you see real estate having a good run today up more than 1%. oil and gas as well. commodities up .90%. we saw a good day yesterday for the price of oil. we rebounded 3% on the rising geopolitical concerns in the middle east. that is playing to the upside. on the flip side, retail down .50% and luxury down .20%. let's show you the luxury stocks. you see next up 4.5%. positive results from the retailer and positive guidance

for the months ahead. stronger guidance for fuller sales items when you look at the next the sales numbers for the month of december. compare that to jd sports which is down 22.6% today. a tale of two halves. jd sports is warning about c consumer spending and more and more looking for promotions with the athletic change. something to talk about on the show with our guest. let's go back to the macro data. we had some inflation numbers from france. this time showing that inflation has risen faster in december due to higher energy prices. preliminary figures, consumer prices rose 3.7% and on the eu basis, 4.1%. charlotte has been looking at the numbers.

charlotte, what can we piece out from these inflation numbers coming from france? it seems to me that the numbers have started to move in the wrong direction versus the prior month. >> certainly this uptick was expected as you said 3.7% in december year on year and 4.1%. there is an acceleration of the prices of energy and services are the main reason for the uptick. prices in the manufacturing products and food should show down. services prices higher. energy prices 5.6% in december from 3.1% in november. services may be more concerning there and may be an indication of the highest the salariyiyies translating into higher prices. one thing that is positive is food prices. we know there has been one of the main engine for inflation in france with 15% back in march.

food prices keep going down 7.1% in december from 7.7% in november. people were spending at christmas and said they were spending the same amount. they would cut down on the chase meal with the food prices being high. we see the trend going down with the food. overall, we see the uptick for december and they expect inflation to go down. you see the inflation for 23.5% and we reach 2.5% for the middle of 2024. they hope the purchasing power to go up for the households to spend. we wait for the services up tick which could mean prices are staying up longer. joumanna. >> charlotte, thank you. we see a lot of rate cut ex

expectations for 2024. charlotte, thank you for the read on french inflation. switching to stateside, fed officials remain rates to stay high. the dot plot signalled three cuts this dwyear. officials cited an unusually elevated degree of uncertainty regarding the policy path which further muddies the waters. let's look at the three majors yesterday ending in the red. dow down .75%. s&p pulling back down as well. two days of declines for the major. the nasdaq with another weak session for the tech heavy index. today is looking better. u.s. markets look like they are going to open up in positive territory. that risk-on sentiment in the

european session is likely to pan out in the u.s. as well. don't forget that tomorrow we will be getting nfp numbers. that is key in terms of anyone watching labor market data. in terms of price action and fixed income, this is the price today. we had a whip saw action yesterday. the ten-year yield ended the day lower, but did get close to 4%. came done again. here we are with the ten-year yield at 3.93%. not a lot of movement with the two-year note at 3.41%. there is plenty to digest with data. we have george joining us on the show. good morning, george. let's pick up with where i left off. a lot of people are disappear pointed and they didn't get more clarity from the minutes as to the timing or potential timing

of the widely speculated rate cuts from the fed this year. were they anticipated too much? >> first, the minutes were never going to give that much detail. second, we have crossed after a fed dot plot in december and we crossed into fantasy land when it comes into minutes. we went from the conservative scenario to three rate cuts as per the fed and the market instantly pricing in six or seven starting in march. the fed said no such thing. investors are somewhat disappointed that the fantasy scenario did not play out. it is one thing to have one of the rallies where you run a little the bit on optimism with the santa rally and all that. it is another to price assets to delusion. >> we head jolts data as well. that set the tone.

i guess it came in weaker than expected. broadly showing the trend of the last couple months that the labor market has started to soften in the u.s. how significant for market direction is tomorrow's nfp print do you think? >> i think it will be significant. i don't expect a blowout number on the upside or downside. what we will see in the economy is a slowdown. somewhat it should be reflected in the jobs market. having said that, this is not our grandfather's job market. there are less people in it. less younger people. less demographics in it. you could expect generally tight labor markets in similar economies than in the past. i think we will see some softness as you put it. i don't see how we will see overt weakness. >> let me ask you about inflation. that will complete the jigsaw

puzzle. inflation is not yet at the fed target of 2%. the market is behaving as it is at 2% and that gives the fed the mark to cut the interest rates. do you think there is too much complacency in terms of how quickly we will get to 2%? >> i think the complacency is not how quickly we get to 2%, but how smooth the ride will be. this is the market full of people in their 40s and 50s. a lot of people out there with the market volatility being the norm. i expect inflation to keep falling, but not in a lineal fashion. i expect volatility. case in point, since the lows in october and november, oil is up 7.5%.

copper is up nearly 10%. the drive index is up 50%. wheat is up 7% or 8%. we are seeing an uptick in manufacturing. all our numbers suggest an uptick in input prices. this is feeding into the supply chain. we should not expect a smooth right down from 10% to 2% and it stays there. it will be a bumpy ride. that's what i expect. >> to add to the commodities prices, the price action that you mentioned the last couple weeks, means we bear in mind the disruption taking place around the red sea. how do you view the geopolitical situation with the risk premium the next couple months? >> so, look, obviously the world is imbalanced. we have two major conflicts and it is probably more imbalanced than in the past. in terms of inflation, how

people respond to it, in the past, we had balanced the episodes. that did not fit into inflation. having said that, we saw a 10% inflation and 15% inflation. we are likely to react del differently. we have trade wars and actual wars and c applicant conflicts that are being sustained. i don't expect to go away any time soon. >> fair. let me round up asking about the price action in stock markets. the first couple days of the year and many people saying the first two out of the long year, obviously, obviouu.s. stock mar are looking more like 2022 and

2023. >> i don't think it is 2022 by a long shot. all of the markets pricing in december, there will be proper pricing eventually. i don't see any big drop. i may see volatility, but nothing like 2022. i do see volatility. we have run too far too taft. w fast. we need to let earnings catch up to valuations and we can move forward. >> very clear. george, thank you so much for joining me today on the show and sharing your views. very candid. george, the chief economist from mazars. if you want to get involved on the conversation, follow us on x or tweet me on x. i'm @joumanna.bercetche. and oil extends gains on the

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welcome back to "street signs." oil prices settled at 3% in wednesday's trade on the back of the unrest in the region and ongoing shipping concerns in the red sea. several companies have halted shipments followed by the attacks by the houthi on vessels. you see brent is up 1.6% for brent. the closer of one of libya's oil fields which aids in the upward lift in price. the oil market was up 3% yesterday. commodity prices are in focus as 2024 begins with likely central bank rate cuts and growing energy demand reshaping the landscape. lots in the commodity space. arabile has been doing a deep dive. arabile, what is going on and why do we see a bullish run?

>> this is interesting to look at here. across last year, we asked ourselves what would happen in the interest rate vieenvironmen and weaker dollar on the back of that. that pushed the kmopds commodities prices to go higher. even the outlook is positive with the impact of green transition plans. cop28 being one that is renewable goals means a substantial demand upside for the price of copper. citi suggests it could have hit 15,000 tons by 2025. that may be the bull case, but it offered upside to the price of copper. it is not just copper from the renewable energy push.

uranium as well with the 15-year high. 110 nuclear reactors according to the world nuclear association and countries bidding to reduce the carbon emissions overall. there are several funds stored away billions of dollars worth of yellow cake uranium. that is the concentrated uranium that comes out of the mining sector. if that is also being stored away, it tells you a lot more supply anticipated come out into the market. the price tag with the shortages coming into play and driving up the price after a decade of low production as well as the weak prices. global output in 2022 was 10,000 metric tons. you have research firms like ocean world reported the demand for 118 million pounds of

uranium last year and just 135 million pounds of psupply. that shortage will come into play. on the other side, natural gas. it has been interesting because it went down wward last year. the worst yearly performance since 2006. high u.s. supply and storage levels weighed on the commodity last year. it is coming off the highs. the question is will geopolitical tensions and easing or potential easing of central bank policy have some play in this price? we have the yellow metal gold of interest. blasting past $2,000 an ounce mark. safe rhaven trading rising amid the political tension. the last three months of 2023,

the price of gold went up 10%. this year, the question he is market expectations for the rate cuts and the fact that there are concerns of wheat growth globally. that is the look at commodities. >> you have to think about what happens to the price of the dollar. i have to say, i love that uranium chart. the jump in december issing some something. all of this jumping in that the nuclear reactors will be built. arabile, thank you. coming up on the show, next, the british retailer boosts the profit outlook for the year once again. more details after this break.

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welcome back to "street signs." i'm joumanna bercetche and these are the headlines.

europe shrugging off the new year moves. and contraction concerns as some of the economies continuing to see signals of decline. and the retailer next is slashes the forecast as it operates its outlook after strong christmas sales. and oil spikes amid the heightened tensions in the red sea with an attack killing almost 100 people.

welcome back to the show. already in the first half hour of the show, we talked about the price action and commodities. a lot of macro data from europe. the german state inflation print and french inflation numbers higher. the final pmi numbers in europe which were slightly higher. we will get the december final pmi numbers for the uk. to bring them to you, composite 52.1 against 51.7. syst similar to the eurozone, they are similar to the uk numbers. the service pmi number is 53.4 against 52.7. you compare the headline level the final pmi figure for the eurozone and that came in at 48.8 for services and for the total pmi number at 47.4 for the

final composite. compare that to the uk at 52.1. five figures higher in the uk than the eurozone as a whole. what is interesting is the services number is revised upwards. interesting context. the november uk services figure at 50.9. 53.4 for november. you are seeing a bit of reaction in the pound this morning. 127 is where we are right now. in terms of the broader markets, it is a risk-on day. a lot of green on the boards. you will see that in a moment. that is in contrast to what we had in the u.s. session yesterday with the three majors ending the day in the red. two back-to-back negative days for the s&p. here, every one of the european indices is on the positive footing. ftse mib is up .60%. ibex up .80%.

some focus on telefonica with job cuts. dax is up .40%. sitting shy of 60,600. we are seeing a rebound in basic resources this morning. commodities doing well. also a lot of action in retailers. let me bring you the latest on what is going on within the retail space. jd sports is near the bottom of the stoxx 600 after cutting the profit forecast citing a slowdown in consumer spending and rising costs. the sportswear retailer sees profit of 915 and 935 million pounds for the fiscal year down from the previous estimate of 1 billion pounds. meanwhile, next has raised the profit forecast for the fifth time in eight months as it reported better than expected

full price sales in the last few months of 2023. it expects the profit at the end of january up from 885 million. it sees sales growth of 6% in 2024 and 2025. nice price action in next today in contrast to jd sports. let's bring in david hughes from stifel. really positive marks today with the market responding well. you have downgraded your next rating to hold from out perform. >> we downgraded it to hold. we did expect another profit upgrade to come. not as big as the one we've got. we downgraded with the price target of 84 pounds. it was one of those with next being up 6 0% year to date. it was trading well.

it is at the top end of the range in terms of multiples on the profits. we did expect this upgrade to come, but we didn't see enough upside to maintain a buy rating. a fan of the company and management and the way it is run. we are happy holders of the stock. >> one thing that stood out to me is the full price sales were up in december, which system pr is impressive and jd sports is saying the consumer is cautious and looking for more and more deals. it is a story of two halves. why in some parts of the market people are willing to pay full price and other parts they are looking for discounts? >> with jd sports, it is a downgrade from what they said. they saw sales growth of 6%. it was less than expected and they did have to do more discounting. they were still growing on the

sales perspective. in terms of next, what we see is the strength of their multichannel business model. if you just look at the in-store retail sales, they were up .6%. they have seen the big growth is in the online sales and international sales in their finance division. the interest they get from giving out credit and loans and total platform where they partner with other people. the strength of next is the next store is mature as a business, but they have seen other routes to growth and that included online and international. >> it seems to be a challenging time in general for the sportswear segment and it was last month that nike warned about cautious necessaness in c spending and discerning purchases and slowdown in sales to come.

that impacted is the sector as a whole. we are seeing adidas trade lower. what extent is this specific to the sportswear part of the market? >> we haven't had a lot of trading post-christmas. it is hard to see how others will do. is it about the sports retailer or agthlathleisure? there's also a bit of transition post covid. agent athleisure was strong during covid. it saw sales growth, but not as much as expected. >> one other topic that i think is really interesting and it is a topic who my co-anchor and i

speak about, she is on maternity leave, you wrote a piece that is interesting on the impact of the drugs which would have on the retail markets. do you think or expect this to be an offer to the clothing market in 2024? >> in the u.s., i think it is a bigger tailwind. our team at the u.s. wrote a piece where it would drive 2% in the overall sales growth. in the uk, while the drugs have been approved, we will see less people kind of pushing for it. we don't have that same pharmaceutical relationship with doctors requesting drugs like in the u.s. i do still think given the success it is having and the level of update it is recommending people and we see the weight loss, there will be an attempt for wardrobe refreshes. perhaps not as big an impact

here as in the u.s. >> i tell you something, i made the mistake of going to oxford circus the day after boxing day. i had to pfew things for my kid and it was impossible to walk around. it made me think during the pandemic that everyone's sales habits would have changed to move toward more online. it feels people are coming back into the stores again. foot fall is going back up again. how do you see the trends evolving? do you see the numbers? >> the numbers from the mri spring board who report on foot fall show high street foot fall christmas day sales have been particularly strong in london

ylondon. you would have seen that on oxford circus. that is strong with the householding ssing with the cost of living. we will return to a world where online is growing again. i think we're talking a low rate. back to the historic trend of the gradual shift online, but people continuing to shop in stores. >> what are the rough numbers for the uk spending foot falls against online? >> i don't know the numbers off the top of my head. i know foot fall was up 6% year on year in the post christmas period. we have really seen. that overall, it real estate mains down versus 2019. the long-term trend is the same. >> unfair to put you on the sp spot. thank you so much. david hughes, vice president of research from stifel.

the prime minister of the bahamas has told cnbc he is encouraged by the latest climate pact to transition away from fossil fuels after the cop28 summit in dubai. speaking exclusively to tanya, he warned his country is on the frontline in the fight against climate change. >> nothing is done. i can see my people becoming climate refugees or doomed to a watery grave. that is our future. i'm passionate about it. others are seeing it that way. the time has come for us to find a mechanism where with political attitudes and political change and we not reverse progress on

this front. >> prime minister, what about the historic agreement which was reached at cop28 with the formal establishment of the fund to help nations like the bahamas? do you think that is enough? i know you have a seat on the board now. how hopeful are you? >> yes, we do. again, at least we see the commitment and we now see a firm engagement to fund the lasting damage fund. at cop, what was pledged was $409 million. what is needed is 400 billion each year. you see the disparity there. coming up on the show, deadly explosions in iran

threaten to fuel tensions in the middle east. we will bring you the details coming up next. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. switch to shopify and sell smarter at every stage of your business. take full control of your brand with your own custom store. scale faster with tools that let you manage every sale from every channel. and sell more with the best converting checkout on the planet. a lot more. take your business to the

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♪ ♪ ♪ ♪ ♪ ♪ welcome back to "street

signs." nearly 1100 people were killed n wednesday in iran after a leader was killed in a drone attack four years ago. no one has claimed responsibility for the blast. tehran has pointed the finger at israel, but any direct action is unlikely with iran expected to react with the proxies in the region. israel and the military group hezbollah want to avoid any escalation of conflict beyond gaza after the deputy leader was killed on tuesday and nine hezbollah fighters died on wednesday. hezbollah's leaders said the group would not be afraid to rea retaliate against the israel attacks.

israel says its war effort is focused on the palestinian militant group. happy to say the professor of north africa program from chatham house joins me. good morning, professor. let me ask about your reaction to the speech yesterday. >> good morning. i think it's typical hassah speech with the threats of retaliation of supporting the palestinians. at the same time, very cautious and the next speech will come on friday with the friday sermon. the message is hezbollah is not interested in a full-blown confrontation with israel. at the same time, the danger is they are working into that. we need to ask if hezbollah is

not interested, why has it amassed 150 targets over the last decade and a half? this creates a situation which is explosive. at the same time, it is not only the message for hezbollah, but also for tehran and there is no interest in regional war. at the same time, there are steps that might dictate the next days and weeks. >> they amassed so much weapons and so many militants ready to fight and, yet, they are falling short of pulling the trigger. what is holding back hezbollah at this point? >> i think hezbollah achieves exactly what it wants. the same as iran.

keep in mind, north of israel has been evacuated. how are the people living right now? this disrupted life in israel and a large part of it as a result of the threat of war with israel and hezbollah. that'swhat they would like to do with israel at the same time. they fight through proxy. they achieve what it wanted. it is not directly involved, but israel is deep into a war with hamas and gaza and engaged in lebanon with the much wider military campaign. at the same time, the houthis are disrupting the trade and commerce in the dpgulf.

hezbollah, as long as they keep troops on the border and north empty, they have no interest in actually extending the war. >> israel's stated objectives for conducting this war to neutralize hamas and to bring back home the hostages. it created a heavy civilian toll. let me just ask how close is israel to achieving the objectives in terms of managing to bring back the hostages home and effectively neutralizing hamas? many senior leadership from hamas are not even within gaza. >> this is exactly the point. israel, as a result, with the 7th of october, decided to

retaliate, but not necessarily with the strategy of how to neutralize or eliminate not only hamas' military power, but political influence. we have seen among palestinians and beyond. i think the level of the death toll among palestinians is unacceptable because most of those killed are civilians. thousands of them are children. that's not a way to conduct a war in the 21st century. you see this from military achievements and achieving the objective and losing soldiers in the process. already talking about the campaign that might last a year or two which suggested it was no exit policy or no real strategy

of who will govern gaza and there is a danger that israel will sink in the quagmire in gaza and controlling 2.3 million people. >> let's ask about the u.s. we have big elections coming up in the u.s. this year. if you go back on the drone attack, there were reports that the u.s. were not aware of it. the u.s. administration did not know the attack was going to go ahead. does the u.s. still exercise as much influence on the israeli government and military decisions they are making at this point in time or is the u.s. losing some of the influence and leverage it would have had on the israeli government in prior years? >> i think that's an interesting question. the united states, washington, can help as much influence on israel as it wants. when it doesn't have the

necessary influence, it does it willingly. if you look at the relationship and what happened since 7th of october, the united states, the biden administration is in full support from day one. making a sense of too much of whatever it wants in gaza. we see that with the result of the killing in gaza and sending two aircraft carriers to the eastern mediterranean, but not having at the same time, the political impact that washington wanted and should have in limited to look at the political horizon beyond the war. president biden said from the beginning that the democracies are fighting and don't make the same mistake we did after 9/11.

at the same time, the united states don't act in line with what it says when it comes to calling for a cease-fire. these a question that should be addressed to the biden administration. what is its policy in the middle east to bring an end to the war? what is the policy to think about the relations with the israelis and palestinians behind the war? bringing a case for solution and at the same time that serves the interests of the palestinians and israeli. >> thank you, professor. thank you for joining me on the show. associate fellow from the chatham house. i want to talk about apple shares. they are sliding in pre-market after another downgrade. piper sandler cut the stock to neutral from overweight.

it moved from 220 to 205. now another downgrade, arjun. >> it is a concern of the handset inventory. the amount of handsets not being sold. it feels growth rates have peaked for unit sales of the iphone given that iphone accounts for 51% of total revenue for apple. that is a concern. they are worried about the deteriorating macro environment in china. china is a huge market for apple. any headwinds on the macro front will impact apple sales. there are comparisons from 2023 as well compared with the currency. >> one thing that struck out from the barclays note is they were concerned about the regulatory headwinds on the

services unit. is piper bringing that up as well? >> the concern of the ongoing legal battles. a number of issues with the app store and developers have spoken and being unhappy with the amount of money apple takes from the in-app payments. >> elon musk and tim tookcook showdown. >> it is an issue for the magnificent seven after the get run in 2023. arjun, thank you for latest on apple. we'll take a quick look at u.s. futures at we head to the end of the session. yesterday was a bit of a downday for the majors. keep in mind with the nfp numbers come. this after softening jolts data suggests that job openings are

dli drifting lower. there is a sign that the jobs are weakening in the u.s. all positive today. ev that is it for our show today. i'm joumanna bercetche. "worldwide exchange" is coming up next. stay with the channel. we will bring you more data and market developments when they happen. thank you for watching.

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it is 5:00 a.m. here at cnbc global headquarters and here is your "five@5." we begin with the santa claus rally. futures pointing to modest gains at the open and not just big tech, but another of the names you know getting hit hard. all of the more reason for the big idea for q1. it might be the best one yet. the u.s. and allies issues a final warning to the houthi rebels