etion 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. a fourth quarter earnings beat puts bp on the daily rise in a year pushing the $3.5 billion buyback plan. ubs shares notch a 2 80 million net loss in the quarter as it rivals credit suisse. >> i'm confident we have a good

plan and the risks are well managed. if you ask about what can go wrong this time. chinese equities close in the green with the blue chip csi 300 notching the biggest gain since 2022 with the authorities rushing to stem stock market losses. the chips are down for infineon as it cuts revenue guidance for the year. the cfo walks us through the demand picture as the q1 revenue comes in short. >> we see auto strong, but that is the key driver of what i just explained of the lower guidance for the year. we have to confess that the consumer communication market recovery is delayed.

we are still very much in the midst of earnings season. a couple of names at the top of the show today. the first is bp. the storm is up 5.8%. the best performance in months. beating expectations. the energy giant raised shareholder distribution and announced $5.5 billion buybacks the first half the year and 10% dividend boost. the market likes it. we will talk about the earnings, especially in conjunction with the earnings we had from shell last week. that is later on in the show. for now, let's turn to ubs. it has booked a smaller than expected net loss of $278 million in the fourth quarter. the swiss lender con fifirmed i

outlook. take a look at the share prices performing above 25 francs. silvia is in zurich and pouring over the numbers. you spoke to the cfo a while ago, silvia. they resatutarted the share buybacks sooner. that is a good thing. on the flip side, it does appear as though there have been misses at individual division level with the investment business and gm business. both are lower he than what the market expected? >> reporter: that is right with the reaction in the markets. to give you a little more insight to what we are seeing so far this morning with shares down by 2% at this stage. investors are focused on the fact that the cost trends in the

fourth quarter of 2023 were not as positive as what we had seen prior to the final quarter of 2023. there is also a feeling among market players that some of the tar getgets from ubs are too fa into the future for them to take comfort in terms of what ubs can do for them. there are positives in the results. i want to highlight some of them. not just the fact we will see them restarting the share repurchasing in the second half of the year, but there is more clarity when it comes to cost savings. prior to today, ubs targeting $10 billion. they are saying they want to achieve $13 billion u.s. in terms of cost savings. that is a positive. when it comes to the financial targets, they confirmed the

return on ct 1 at 15%. they said they want to increase that once the merger is concluded. obviously, when you look at ubs, the concern for market players is how the integration of credit suisse is going to play out. ubs confirmed the entities should be merged in 2024 and then the cost savings and funding will continue in 2025 and 2026. let's see how that process will develop. when i spoke to the ceo of ubs, he said he is not losing sleep over the integration of credit suisse. >> nothing has changed. the biggest risk is delays and time. it is not necessarily if we do it because we will do it. it is how will we do it on time and will we deliver the mergers of the operating companies on

time. 2024 is a pivotal year because we are merging in the first half of the year our two parent companies. the u.s. operation and the swiss operations. this would allow us to start to realize the synergy. the i.t. migration is the second major problem. we have a very concrete plan. we have 6,000 deliverable tasks we need to execute. we are planning very carefully and also in a way that doesn't create concentration risk. i'm confident we have a good plan and the risks are well managed. if you ask me about what can go wrong is timing and delivering. >> what could bring that derail in terms of timing? what keeps you up at night when you think about the merger process?

>> there are regulatory processes that needs to be managed, but we have a good understanding with the regulators worldwide and they are cooperative and supportive. i don't see issues. as i said, the i.t. migration is well managed. i'm sleeping well. >> good. i want to ask about the cost savings. you have been more clear in terms of what you are expecting with the $13 billion there. i want to know how you will achieve that and how much of the $13 billion will lead to grow? >> more than half of the cost is related to people. the rest is about decommissioning i.t. systems and realistic footprints and other general administrative costs. that's the big chunk of what we will do. you know, it is probably the most painful part of the journey

is the people journey. we try to manage our natural attrition in a very focused way. we try to internalize as much as we can to leverage the goods talent and pools we have in the combined banks. we are also benefitting from the demographic trends. a lot of people are due to retire in the next two or three years or early retire. i think we do manage to our best to avoid a minimize the social cost. >> i want to look at the strategic update. you are announcing in the second half of the year you intend to restart the purchases of shares. i wonder if you are being too conservative with that? analysts were expecting you to start this in the second quarter of 2024 rather than waiting until the latter part of the

year. >> i think considering the major milestones on integration that i mentioned before, it would not be prudent to start share buyback and capital distribution before we complete that. i think that's the second half of the year which is more appropriate. >> reporter: i also want to draw your attention to other potential challenges in the short and medium term for ubs. at the moment, the swiss lawmakers are preparing a report on too big to fail regulation and also reports suggesting that regulators could ask for tougher liquidity requirements going forward. let's not forget there is a recent issue with julius baer. i asked him if he is expecting tougher regulations going forward and whether swiss banking has simply just been

taking on too much risk. >> the aftermath of the crisis last march, particularly in respect with the regional banks, but also the one here in switzerland needs to be considered. that doesn't mean liquidity management is the new era of digital banking. saying that, it is important we don't jump too quickly to conclusions with the regulations and how we manage unintended consequences or collateral damage we may make to clients and the economy. i think it is good to review things. you know, as far as switzerland, i do think there is a commission that is investigating what happened. it is clear to me that what happened in march in switzerland was not due to lack of regulation or clear regulation. i do hope that all actors will sit down and each of us has to

take his own responsibility for what happened. >> given what happened to credit suisse and now recently, not to the same level, but impact on julius baer. i wonder if you think swiss banking is taking on too much risk. >> i think it doesn't look to me like swiss banking is taking on too much. swiss banking is one of the most successful if you look at and compare to other jurisdictions. in the last couple of years, we had a couple of unfortunate incidents. swiss banking goes back 200 years. we are pretty strong. every time we have a crisis, we come out even stronger. >> reporter: so despite what analysts described as ambitious targets from ubs, joumanna, it does seem at this stage the feeling among the market players is the results were not as

positive as they would have liked to have seen. all in all, as you look at ubs, the focus is on the integration of credit suisse. let's see if the swiss bank will manage to achieve that timeline and targets in the years ahead. >> silvia, thank you so much for the reporting and for that interview with the ceo. for more on the share buyback, check out cnbc.com. we turn to the markets and how they were performing. we walked into the news yesterday that jay powell sat down with cbs' "60 minutes" and made hawkish encomments. we saw investors paring back their purchases. treasuries were on the move yesterday and ten-year notes

were ten basis points higher than before the announcement. s&p and nasdaq dipping somewhat. overnight, the tone is positive. i'll show you why in a second. we did have a strong hand over from asian markets. that set the tone for the stoxx 600 over here in europe. we are up .30%. quite a lot of green on the heat map behind me. as i mentioned, it is a day of earnings. a lot of stocks we are watching here with european markets. let's see how it is translating with the ftse 100. we are up .70%. we are seeing a boost come from commodities and basic resources today. of course, bp is the stock we are talking about. up 6% in trading. shareholders are liking what they see with the earnings and share buyback that has been announced. cac 40 in france is up .30%. we are seeing marginal under performance in luxury which is interesting with the asian

equities. dax is sitting at the flat line. the peripheries is up .30% and .40%. the smi is in focus with ubs and that is down 2%. this is where leadership is coming from. up at the top is oil and gas. that is bp and followed on by shell last week. a boost to the sector. retail is up 1.1%. we go some uk sales numbers come through this morning. we will talk more about that. arabile has the details for you. essentially, it is pointing to a slowdown in retail sales for the uk economy. the food sector is quite strong. on the flip side, utilities down 1%. food and beverage down .30%. as for u.s. futures as we head into the session, it is looking mixed today versus the down day yesterday. s&p and nasdaq are opening

slightly in the green and dow in negative territory. let's turn your attention to what has happened in the asian markets overnight. take a look at this. it is impressive. hang seng up 4%. csi up 3%. shenzhen up 5%. these are equities that have been really struggling to get a bid in the last couple of weeks. we are currently sitting closes to five-year lows for the csi index. they have actually now closed higher amid a flurry of state intervention. the national team, quote/unquote, have come in and providing support. the tech sector as you see is up 7% in trading. the big question for investors is whether or not this is sustainable as we head into chinese new year. that is something to keep in mind. this is how the current board is

trading. > the country's security measure has called on short selling for etfs with that bloomberg report that xi jinping is set to meet with watch dogs. you may wonder why we he are showing process up here today. it has a more than 20% stake in tensent, which is one of the major tech names in the region in china. that stock is up significantly today. as a congress, prosus, the big stake holder, is up 3%. our colleague filed this report. >> they he arare coming throughk and strong. you have chinese regulators announcing more restrictions in relation to short selling and telling institutional investors

like pension funds to invest in more stocks and also yesterday, the securities regulator announcing more restrictions in terms of certain types of derivatives trading. also this morning, you have a state fund putting out a statement saying it will expand the scope of its investment of etfs to try to prop up the mainland markets. we have seen a number of reports suggesting there is state-backed buying involved with the so-called national team trying to help the markets out. analysts we have been speaking to say this is a signal sent by chinese authorities to investors that they are really serious about putting a floor on these markets. the big question is how long will this the rally last? in the past when we have had these measures coming through, there could be a rally off the

back or last a few days before it fizzles. underscores how seriously the leadership is taking this and another example of that with bloomberg reporting as early as tuesday evening, the leadership, including president xi, could be briefed about the state of the equity markets by financial regulators. in singapore, lynn lin, cnbc business news. coming up on the show, nintendo hikes the switch sales for the year with 18% bump in sales. we will have all of the details in just a few moments. shopify's point of sale system helps you sell at every stage of your business. with fast and secure payment. card readers you can rely on. and one place to manage it all. whatever the stage, businesses that grow grow with shopify.

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welcome back to "street signs." more company news to get to this morning. let's start with l 'occitane. bloomberg reported that blackstone is looking for a deal on the firm. the chairman owns a more than 70% stake according to exchange

filings. also another stock we are watching is novo nordisk's parent company will buy contractor catalent for $16.5 billion. a heavy try price tag. the acquisition will expand production for wegovy at three sites amid record sales last year. when charlotte spoke to the ceo of novo nordisk last week, he did feel confident in the outlook for supply. no doubt this will help. also in pharma, novartis is set to acquire morphosys for 2.7 billion euro. it will pay cash for the company which it will take private after completion. you see the stock down .30%.

morphosys is up 14% on the news. switching to infineon in germany. shares are lower after the chip maker was downgraded. ge german firm posted quarterly net income of 587 million euros. the ceo outlined the issues facing the group. >> i think the market reaction is echoing the current macro challenges we are all witnessing. we have a two tales of the market with auto very strong. we have to confess that is the key driver of the lower guidance for the fiscal year. we have to confess the consumer compute communication markets

recovery is delayed and probably that is what the market is looking at currently. >> interesting. sticking with the chip space, nordic semiconductor has a loss of $7 million. the chip maker cited a slowdown in the sector due to headwinds and expects lower revenue between $70 million and $80 million. these two stories highlight that not all chip makers are made the same. nvidia, of course, has been one of the outperp outperformers in stock market. they have a huge market share in gpu chips. other manufacturers are struggling due to the macro headwinds. nintendo switched the forecast to 15.5 million units this year after the nine-month profit jumped 18% to 400 billion

yen. arjun joins us with more. people are still buying con consoles. >> the switch is now nearly seven years old and still has strong momentum and large past part of that is the super mario brothers and the zeld sara game. when you look at the latest quarter in december, super mario brothers, the new game in october, has become a big hit. people are still buying a very old game. mario kart which has been in the market for a few years. they are buying the zelda as well. there is a lot of strong outlook on sales with 122 million ain w annual player ans. they are hiking for switch

sales. >> i guess what apple is doing with its phone and hardware to get people into the apple e ecos ecosystem. this is similar. you get nintendo players playing switch and tapped into the ecosystem as well. you have the merchandise and the intellectual property and push into digital. >> digital and mobile games and films. a zelda game recently being announced. the rally is 14% alone this year to date is on anticipation of what comes next. that is what investors are looking for and analysts i spoken to expect that to happen this year in the second half. the switch generation having somewhat of a fresh breath of life thanks to the popular movies and other games around. >> it is impressive. the stock is up 50% just in the last 12 months. some of it is forward looking

and how well they are still doing with sales. arjun, thank you. coming up on the show, minneapolis fed president neel kashkari says some areas can take time cutting rates. we'll discuss after the break.

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welcome back to "street signs." i'm joumanna bercetche and these are your headlines. a fourth quarter earnings beat puts bp on the rise in nearly a year with the $3.5 billion buyback plan. ubs extends losses after the $280 million net loss in the fourth quarter as it deals with the collapse of credit suisse. we have the ceo on his next steps. >> the risks are well managed.

if you ask me what can go wrong is timing. chinese equities close in the green with the blue chip csi 300 index notching the biggest one-day gain since 2022 as sentiment shifts with authorities rushing to stem stock market losses. and the chips are down for infineon. lower in early trade as it cuts revenue guidance for the year. the cfo walks us through the demand picture as the firm's q1 revenue comes in short. >> we see auto very strong, but we have to confess and that's the key driver of what you just explained of the lower guidance for the full fiscal year. we have to confess the consumer recovery is delayed. very strong hand over from asia overnight. a lot of support coming through

in that market. shenzhen up 5%. csi up 2.5% this morning. that has meant the hand over for the stoxx 600 has been overwhelmingly positive. every single one of the european boards is trading in the grieen. the dax is trading on the flat line. the exception is the swiss index down .50% on the back of ubs. the stock is down 2% today in trading after the results came through. disappointing to investors out there in terms of the breakdown of some of the businesses managed by ubs. take a look at the ftse 100 today. up .50%. one stock, bp, up 6%. again, markets reacting positively to the results given to the shareholder buyback distribution. that is a big driver for the

ftse 100. just on the macro front, i want to draw your attention from the bank of england chief economist who says it iis a matter of whe, not if, they start to cut rates. that expectation is fueling that possiblitive sentiment this mor. cac 40 is up .20% and the dax is trading around the flat line. infineon is one of the down movers. as for currencies, this is how it is shaping up. the pound trading slightly against the dollar of .8.80%. the yen is trading firmer against the u.s. dollar. just shy of 149. the euro is trading sideways. let me turn your attention to fixed income space. with we are slightly firmer. a couple of basis points

snapping back versus trading yesterday. we saw a big upward move in yields yesterday. five or six basis points over what is happening with u.s. yields yesterday after the powell interview over the weekend. the strong payroll report on friday. the two-year note is three basis points lower. ten-year note is two basis points lower. we are sitting at 4.14. 20 basis points higher from three nfp. growth in the u.s. sector expanded for the 13th straight monthrebound in employment and boost in new orders. minneapolis fed president neel kashkari says policymakers can

take their time before cutting rates claiming that the fed's rate hikes have not been as restrictive as it appears. kashkari wrote that the neutral rate may have moved higher in the post-pandemic recovery citing the low neutral rate environment before the pandemic. kashkari said the fed now has a window of breathing space to assess economic data before deciding when to lower rates. again, adding to the more hawkish comments coming out of the fed over the last couple days. switching to italy. the italian parliament is set to vote on the controversial capital markets bill today nearly a year after the legislation was first proposed. the bill aims to simplify the process to list in the country and open the process to smaller companies. the italian prime minister

giorgia meloni says it will change requirements for voter rights. however, speaking to charlotte yesterday, there was a more optimistic view of the legislation. >> overall, it is positive, but there are soucertain aspects an that is a question of the final reform and what it will look like. >> let's get out to the ceo of policy at orcel. let us just start with the capital markets bill that will be voted on today. at its heart, the way the legislation was put together a year ago, it is a good thing for the italian economy and capital markets and they are looking to simplify listings and ease constraints of companies looking to go down that path. myunderstanding is it is the tweaks and the proposals by the

meloni government recently that are making the bill more controversial because what they he are doing is they are allowing some of the controlling investors to potentially have more voting rights should this bill in its current form be passed. my question is will it be passed in the current form and if it does get passed, what are the implications in italy? >> yes, good morning. thank you for having me on. you are right. the original thinking about the reform is the healthy and sensible one. it was driving to make it easier for companies to list on the capital markets. that was the dping. a lot has changed since then. i think this reform in the current form ex-aacerbates incentive to abandon.

i think one of the issues in italy has always been that controlling shareholders have an almost hedging power. this is exacerbated by rights. this is getting worse, not bett better. the other issue is the boards to put forward a slate of candidates is becoming enormously con volutedconvolute. this is difficult for widely held companies. it will become so complicated. it would not be a surprise if the companies decide to leave italy for the netherlands. it is the opposite of what the

bill was supposed to achieve. then the third item is this has become enormously political. it is very hard not to think that meloni is looking at the endless general with the overall impression that meloni is dragging on in the war and siding with mario draghi. it was a very good idea. it was meant to make things better. it's not going as planned. >> very damning assessment from you, especially if italian companies end up listing in netherlands. that is what they don't want to achieve out of the bill. to your point on politics, this is the second time that the meloni government has tried to tinker with the financial system. we saw what happened last year with the proposed windfall tax

on the banking system. it back fired and they had to water it down. ceos were unhappy with the announcement and the government did have to back down. will we end up in a similar situation for this bill? >> yes. meloni seems to have a chip on her shoulder with the power that has been, quote/unquote. it is unclear why she is this way. there is a consistent path or track record. you mentioned the windfall tax on banks. that was thwarted to tweak the legislation on the non performing loans. now we have the issue here where she keeps pushing ahead. d definitely the relationship with the government and financial establishment is important. >> let me ask you a question more broadly about how meloni is

doing because if you look at the polls, it is interesting to see that brothers of italy are still pretty much ahead and managing to hang on to the big lead they had during and just before the elections which is impressive. meloni government has faced numerous challenges and when it comes to foreign policy as well. why do you think she is still managing to maintain her popularity? >> well, you have to look at the overall picture. no one is doing well. the left and five stars are waging wars against each other. there is no opposition as we speak. meloni's partners are in dire straits. meloni may not do greatly, but doing marginally better than

anyone else. clearly, everything is on hold and everyone is waiting for the outcome of the european elections. not expecting any surprise until then. june or later in september with the european commission. until then, meloni is pretty safe and stable. the one item, however, we need to look at is the growing sense of disenfranchised amount of voters. the number of those who will not cast a vote. literally opting out of politics. that is not a did sign. >> i remember around the time of elections and you and i spoke at the time and there were lots of questions about what a meloni government would mean specifically for foreign policy and europe's initiatives with ukraine. she has been extremely steadfast on this point. what i thought was interesting

about the budget debacle within the eu is many reports suggesting that meloni played a go-between role with the eu and viktor orban to get him to approve or support the ukraine bill. meloni is a key influence within the eu. something that is working to their advantage. >> well, i think that meloni had to change the plan. the plan was initially to become part of the core of the eu. she had talks with the european popular party, but they did not turn out as she expected. she ditched that and will not be joining forces with the socialists and macron.

she is doing all she can to have a bigger ecr group in the european parliament. she is, as you say, reaching out to old friends like viktor orban. it is a very dangerous game because it is brinksmanship. she is literally a broker between two worlds. she can tame the tiger, so to say. at the same time, hugging orban is not actually very good for your credentials. orban stands for all of the things. orban is a friend of russia and orban is a friend of china let's s . let's see how this plays out.

i think we are at the sa stage everyone is flirting with everyone. geopolitics has become enormously important and one cannot disregard the geopolitical aspects. i think orban has become so toxic, it is dangerous even for meloni. >> interesting. a good place to leave it. francesco. britain's king charles has been diagnosed with cancer according to buckingham palace. he had been in hospital for a procedure which led to the cancer discovery. the palace added the king is positive about his treatment. coming up on "street signs," uk retail sales growth falls in

january. we will breakdown the numbers after this break. 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. shopify's point of sale system helps you sell at every stage of your business. with fast and secure payment. card readers you can rely on. and one place to manage it all. whatever the stage, businesses that grow grow with shopify.

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welcome back. uk retail sales slowed in january with low leavels of demand for larger items weighing on businesses. arabile has more. >> the question is are the higher interest rates taking a toll on consumers and you are beginning to see that aspect. retail sales have declined significantly over the last year. 4.2% was the figure for january of 2023. now we are at 1.2% increase year on year. the reason why you are getting an increase is because you still have food sales managing to move higher according to the british retail consortium. 6.3% up this january. that figure stood at 8% last january. that tells you consumers are holding off on purchases or purchasing at a lower scale.

retail sales up for the food sales, but lower than a year ago. the non-food sales is in negative territory. that is on the back of larger purchase items not being at the forefront for a host of consumers. brc says larger purchases like furniture and electricals remain weak. this is what the graph looks like then when it comes to the sentiment around retail sales and the growth or lack of growth moving in the other direction. barclays makes note that this could move in a different direction this year. they say consumer confidence has ticked higher. the gfk data last week pointed to that. they say that spending looks to be on an upward trajectory and set to increase more than cpi in

the coming months. that bodes well for this graph if it moves upward. the question mark becomes what does that mean for the bank of england? maybe then you see inflation al a higher level and may not be able to cut interest rates. the share prices for british retailers has gone up today. you have seen the likes of sansbury and marks & spencer more higher. down for tesco and ocado. yarabile, thank you. bp raised shareholder distributions and announcing plans for a $3.5 billion buyback in the first half of the year and a 10% dividend boost. joining me is rob perkins. rob, thank you for joining us this morning. let's take a look at the share price reaction today.

it has been quite pronounced. the shares are trading up almost 6% although we are seeing profit had slid 50%. there is weakness coming from the oil production operations. clearly the buyback announcement is what is in forcus. is that driving the share price action today? >> hi, there. that is clearly the case. they weren't expecting the buybacks and boost in dividend which is a nice surprise for investors. it is a needy win for bp which had a lot of pressure they had to suffer from investors in recent months with the change of cfo and some key holders seeking a further dial back on the push to claim net zero goals further out to fall on the more profit making oil and gas business. we have seen that play through

well. i think that is under pinned wih the earnings growth and adjusted earnings for the quarter. that is a strong signal. you know, bp is not giving up the zero targets, but it is compared to its peers, it is expecting growth in oil and gas production volumes this year and further out. that stands out as a falling off now of peak production of fossil fuels for the european peers. it frames an outlook for 2% to 3% of liquid volume growth. >> this is also the first earnings call that the former cfo and now ceo who will be giving with a lot of questions made of him. what do you make of his

appointment as ceo? is that overall strategy? you spoke about the activist investors like blue bell coming in looking for bp to water down the transition goals. the fact the cfo is put into the ceo role. should we expect change of strategy? >> certainly not with the guidance from him and senior management which is steady as she goes. he knows the company. it is central with the executive team setting out strategy for net zero growth and decarbonization and low carbon fuels. i think that is very much on track. no one is expecting a major swerve from that.

we picked up in the talks today to investors after the earnings released and focus on the profit margins from the oil and gas to fund the transition. no big dial back. some big projects coming on stream over the coming years. >> let me ask you if there is a trade off between the buyback plan announced today versus the investment plans and also to put more money into transition and to low carbon projects? >> my guess would be that they could do both. they can also support the share price with buybacks and dividends. oil and gas is the key revenue and earnings driver has fallen for 2023, of course. it is driving huge cash flows

which they are committed to turning that to shareholders. they committed the capitol to the low carbon promise. the debate is if it comes back to the projects are not profitable or producing the returns. >> rob, we will leave it there. thank you for joining me. rob perkins at s&p global. quick look at futures before we head out. it is mixed. nasdaq is positive and the other two in the red. that is it for the show today. i'm joumanna bercetche. "worldwide exchange" is coming up next.

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it is 5:00 a.m. here at cnbc global headquarters and here is your "five@5." we start with stocks slipping from all-time highs from the fresh batch of fed speakers as the markets hit the midway point of earnings season. and stocks in china surge on stimulus hopes. why the headlines are gaining traction with investors. and getting past the credit suisse mess. ubs rewards shareholders with the $1 billion share buyback