that's all for this edition of "dateline." i'm andrea canning. thanks for watching. ♪ welcome to "street signs." i'm carolin roth and these are your headlines. big boost for barclays with investors cheering a big change to the business as the bank writes down assets and cuts jobs to right size its structure. and a record high as it surges to the top of the stoxx 600 and hiking its margin p target for 2025. we will be hearing from the ceo francois jackow later on this

morning. bayer slashing its dividend as the german giant looks to cut its debt with the ceo saying the decision was not taken lightly. hotel giant ihg beats on annual revenue with the more than 70% gain in greater china and pledging more than $1 billion in shareholder payouts this year. >> you see interest rates have leveled off and inflation has leveled off. they have come down from the highs of growth. we are seeing construction pricing improving around the world with the supply chain issues resolving. you can see it in our results. good morning. a lot of earnings to contend with this morning. barclays announced major

strategy overhaul separating business into five operating divisions and vowing to return 10 billion pounds to shareholders in the next two years. net interest income soared to 12.7 billion pounds. the lender notched a loss of 100 million pounds for the fourth quarter. arabile joins me with analysis. you have been reviewing the numbers all morning, arabile. it is not necessarily the numbers, per se, but the big strategy reveal. what are the analysts making of it and investors seem to like it? >> investors are liking it. if you take a look at the numbers, they haven't made up with regards to the numbers. they met net interest income. the market anticipated 20% overall there. yes, it came through. the fourth quarter pre-tax profit is 100 million pounds is what barclays reported. the market hoped for 283 million

pounds. quarter on quarter, it was a significant loss they had seen or drawdown from the 1.3 billion they had in the fourth quarter of 2022. it is the structure cost as well that has come into play here. that is in focus. they incurred 900 million pounds of structure cost. a lot of that with regard to the structure they are trying to put forward here. 340 million pounds of job cuts in order to right size the head count. then they say they put through 5,000 job cuts in 2023 as well. the question mark is they don't tell us where that is, but could it be investment banking business? primarily as a portion of the business which struggled of late. >> barclays now saying this is more of a show-me story. this is a crucial day for the ceo. the shares have been under performing, not just in the uk banking sector, but europe wide.

we talked about it on the show yesterday. shares for a company trading at a discount to the book value. how do they get that up and make sure investors come back for the long term and get the valuation up at least on par with european peers? >> for one, they will tell you they will give you 10 billion pounds of shareholder payouts. that's a good start. it is one way to convince the shareholders to stay with us. this is a turn around story that is about to happen. when the ceo took over in 2021, that investment banking business was the one that had got even the most pressure to be decreased or cut completely. the reason for keeping it in the current format or changing the business means they have to show that deals are coming to the floor. they have two other deals at play right now. that soc gen private bank

business and the purchase of tesco retail banking business for 700 million pounds. yes, some deals are in there, but it doesn't say they have dealmaking overall coming back to the business. if so, it means investment banking business is coming back. they are anticipating this year is the year for deals. >> absolutely. >> if it doesn't happen, what does it mean for the business? >> i wonder what is morale like in the investment bank, not just at barclays, but across the sector? we have seen the dee als the la couple years with interest rates rising and bonuses are shrinking. >> if you speak about the bonus pool, it is not getting bonuses at all. if you factor in barclays saying it. so you say at the same time and they say we will issue that share buyback.

they had 890 million share buyback in place. now a further share buyback of 1 billion pounds. they are hoping to pick up the share price and entity. they embarked on the lofty goals for the business. when you compare it to other banks in europe and stateside, it pales in comparison. >> we are not thinking about closing the gap with the european and u.s. valuations. overall, european peers are struggling to do that. you also have been covering another stock this morning with bhp group which had beaten the profit forecast for the first half of the year. take a look at the shares. 2.124% lower. the first half profit came in at $6 billion. the mining firm dialed back the dividend, but said it was optimistic on the demand

recovery last week. bhp wrote down the nickel operations and set aside more cash to cover costs associated with the 2015 disaster. arabile, what i'm trying to glean from comments is the dividend of 72 cents. that beat expectations. it is down from last year. that is a good sign. if you have got downbeat sentiment on china and nickel prices with the big writeoff here and the overall prices, it cannot evade that trend. i guess that's what is reflected in the sector. >> exactly. the ceo speaks in the numbers just about how nickel is a small division. we are seeing more growth actually in our copper and potash and iron ore areas. if you are a nickel business, it is taking on the writed downs which is hurting the bottom line.

nickel does have demand with the ev play, but because of the amount of nickel we're getting from indonesia, it does mean prices are lower and it is hampering the profits and margins for the nickel business for bhp. remember they impaired that for $2.5 billion on the value of the business. there had been wondering if they should mothball the australian business. they had mothballed the previous operation, too. will this be a position that they have to decrease or do they double down because of the ev demand that is currently at play? they have a contract with tesla to actually offer tesla nickel from that operation itself. what happens to that contract? >> ev demand is slowing even in

china. >> the united states, if i was to add there, they have got regulations in place. joe biden is set to sign regulation saying they might decrease how quickly entities need to produce ev vehicles as well. the ev space is interesting and bhp may suffer at the helm of it. >> arabile, thank you for your ana analysis. good work this morning. moving on. ihg posted a 16% annual rise of global revenue. the hotel group saw strong travel demand across all key markets. the company announcing it will return more than $1 billion to shareholders this year. the ceo said the group is optimistic about the year ahead. >> we are still opened 275 hot. we have more signed into the

pipeline with the strongest fourth quarter. it is a testament to the strong enterprise. a powerful brand portfolio and strong enterprise that keeps compounding growth for share homicide shareholders. and let's move on with the air liquide full year operating profits. charlotte is joining me with more on the stock which is at the top of the stoxx 600 this morning. that is a big announcement coming from air liquide. >> he was saying in the introduction with the results better than expected for the full year with the revenue up 3.7% on the comparable basis of 27.6. net profit up to 3.1 billion euro. the details in q4 shows a positive trend compared to q3 with the divisions. electronics up 3% in q4 compared

to the negative result in q3. healthcare is up 10%. 8% for the full year. positive trend for q4. others said they could see a slower growth in 2024 and uncertain geopolitical and macro environment. the gas suppliers spell for industrial production. steelmakers and chemicals and manufacturing is an issue. the positive indication there including on target for air liquide to beat the target from 2022 to 2025. they increased the operating margin of 320. twice the initial target for 2025. >> but many other players in the gas space also plays on the futurehydrogen.

what we hear is we don't have the agreements or the infrastructure in place. we don't have visibility. what are you hearing? is there any comment here? >> not yet. those comments will happen shortly. we have a chance to speak with the ceo. hydrogen is the at heart here and key player for the energy transition. lng is a big producer in the world of this with the tax credits they might get with the inflation reduction act in the u.s. as part of the plan for the dp green transition. that is reflected in the shares. 105% for the past five years. that is 20% just 12 months on. they have an all-time high up 5.5% this year. we had a chance to speak to the ceo of air liquide at 11:45. >> charlotte, thank you.

pushing on. german crop signs for bayer will cut dividends by 95% in a bid to bring down its debt. bayer has been facing challenges since the $63 billion takeover in 2016. they will pay 11 cents a share versus the expected 1.92. shares are stable right now, but still off by 0.1%. still coming up on the show, is the airline industry stalling or taking off? we will get the latest from asia's biggest air show right after this break. we'll be back in two. 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 next stage when you switch to shopify. so, you've got the power of xfinity at home. now take it outside with xfinity mobile. like speed? it's the fastest mobile service around... and right now, you can get a free line of our most popular unlimited plan. all on the most reliable 5g network nationwide. ditch the other guys and you'll save hundreds. get a free line of unlimited intro for 1 year when you buy one unlimited line. and for a limited time, get the new samsung galaxy s24 on us.

welcome back to the show. a quick look at chinese equity markets for the most part of the trading session where we saw l lukewarm reaction to the pboc. they rallied into the close.

that's what chhappens in china. shenzhen up 1%. this is as china central bank cut the five-year loan prime rate which is the biggest cut on record. it is the latest move by authorities to shore up the country's troubled property sector with the majority of lenders pegging mortgages to that benchmark. the pboc left the one-year raid unchanged at 3.45%. sam baddas filed this report. >> reporter: china's central bank taking the market by surprise with the bigger than expected cut to the lending rate. slashing the five-year fluences mortgages. it is the first cut since june. market was expecting a 15-basis point cut. the one-year rate was held

steady which was surprisiingly expected. the lmp acts as a guide. the state media hinted the five-year rate could be reduced signaling a desire to help the struggling tsector. analysts say the move sends powerful signals by authorities that they are willing to support the real estate sector ans well as the banks which provided a buffer. the interest rate cut failed to impress the markets in morning trade. investors are not convinced. the major indices falling after the announcement which raises questions. did investors want more from policymakers? are they waiting to see the cut take effect or are there concerns it won't go far enough? the market awaiting more signals

from the government meetings in beijing. i'm sam baddas in singapore. let's show you how european equities are faring one hour into the trading session. we are under water here. the stoxx 600 is off 0.1%. we talked about the stocks at the top of the show. when it comes to the indices one by one, i want to show you what is happening. we are seeing that dax is scaling back further from some of the record highs we saw last week. the cac 40 is up 0.3%. obviously, bayer is a big story in genermany. the ftse 100 is lower by four or five points despite the fact of the out performance by the basic resources stocks. let's look at the sectors here. basic resources off 1.5%. we did see iron ore prices coming under pressure today

although bhp numbers were pretty good adding on the dividend here which was good news based on reports. chemicals are out performing at 1.5%. travel and leisure and banks showing leadership here. astrazeneca led the charge in yesterday's trading session after the company saw the cancer drug approved by the fda for treatment of a certain type of lung cancer in combination with chemo chemotherapy. the stock is off 1% today. i spoke with the astrazeneca senior vice president of oncology in europe and canada to see how the announcement fits in with the company strategy. >> there is a lot of expectation because we delivered over the last five years plus with a remarkable transformation of oncology across many settings, whether in lung cancer, but

breast cancer and increasing the ngi and, of course, malignancies. there is a high degree of expectation. i would say that our strategy is delivering across the areas where we are seeing, i think, important new trials coming through. we initiated on the 27 trials last year for astrazeneca. it shows the investment we're making and i think we are very encouraged by the data we have seen across the portfolio. >> can we step away from oncology for a moment? i know you are in charge of cancer, but i wonder with an anti-obesity drugs being big and you are making a big bet following the announcement in the month of november, do you feel the cancer business is not

getting the dollars and pounds and love that it should be getting? >> i think that our ceo has demonstrated a lot of love for cancer. we have a lot of investment coming into cancer and we continue to see that with the portfolio and studies i just mentioned. i'm really excited to see the rest of the portfolio also getting the investment. i think the vaccine and infection area really is a transformation for the organization when you see so many of these therapies getting the investment and now starting to see the commercial impact and patient impact across the globe. >> your investor day is coming up in march. you want to deliver revenue growth until 2030. leadership and smart chemo. how do you achieve that in what is a very competitive

environment? >> i think we have a number of things. we need the science. we are investing in the science. you saw recently a deal which a chinese company is thinking about how we bring wholesale therapies in. we have the drugs which need the development in our pipeline. we have many studies because there is a patient need out there. we need to drive the commercialization. that is something i do in my job. i think we are starting to see the value to bring and we are becoming standard of care or standard of care in multiple set settings. >> final question to you. i'm sure you heard this many

times. astrazeneca was at the forefront of delivering vaccines against covid-19. what about cancer? when can we cure cancer and does it take the new technology? >> it is a bold ambition. i think with the sort of data we are coming in and you saw the press release that we had today for the trial where we stated overw overwhelmingly. we don't make those types of bold adjectives in our press release. i think we are getting close. it will take combination of strategies and identifying the right patient at the right time and partnership with the health systems to identify patients as early as we can to have the best chance of cure and the signals are all looking good for us to achieve that ambition. >> staying in the sector, grifols is losing trade after

gotham city issued a second report questioning the accounting practices. cnbc has reached out to grifols for a comment. a resurgence in travel demand along the supply concerns are cdominating at the singapor air show. the fishing aircraft orders of the event were announced with boeing announced a deal with thai airways. the director told cnbc that despite a boom in travel, demand has so far not recovered to pre-pandemic levels. >> certainly no evidence of that at the moment as you say as we he are getting back to 2019 pre-covid levels. the asia pacific region is lacking a little bit behind

because of the late reopening of the international borders. certainly the environment at the moment remains, i think, positive for airlines and most the airline ceos are optimistic for 2024 despite the headwinds you outlined with higher inflation and oil prices and interest rates which are much higher than we had been used to to some time. >> we are seeing positive results coming through in relation to q4. you have been talking about the headwinds in terms of the supply chain disruption. can you talk us through how long that is likely to persist and how much is that going to hamper growth going forward? >> looking forward, we tampered the growth outlook for the industry reflecting some of the challenges. the supply chain issues have been there for a couple of years. they are slightly improving, but

there are still significant issues that will need to be overcome which will continue through 2024 and 2025. maybe into the early part of 2026. at least we're seeing a better outlook from manufacturers and best grasp of the challenges they have faced. it will hold back the delivery of new aircraft and the reintroduction into service of aircraft taken out. it is extending the maintenance time on aircraft as they wait for spare parts to be delivered. it is frustrating in the environment where demand is actually quite strong and what we have seen right throughout the period of the recovery which is the demand has outstripped the supply because of the restrictions on the supply side. >> also at the singapore air

show, lynn lin talked to the manager of ba systems for the demand of the group's products in asia. >> it is an interesting area and our unique vision of the company is across land, air, sea and space and cyber. not many have that full portfolio of defense and security. we see that demand across the region. it is on the maritime to protect the naval. in other areas, it is more on the land borders, for example, india. it is across space and cyber which is important. we recently had the regulations approved for the acquisition of aerospace and space missions for bae system was here in singapore last week singigning agreementsr

an exciting project. brazilian air space company signed a contract with singapore air airlines scoot with the top executives announcing plans for the potential partnerships in china. the embraer ceo says he sees great opportunities in asia. >> as much as we he grow our fleet, some of of the aircraft will grow automatically. we want to grow economically. we need to overall to help us increase our revenues into the next year. >> you said asia is the driver for growth? it is now and will be for the next 20 years. where specifically? it is a big market. where within asia do you see the growth drivers? >> in all of our believe our je

perfectly. we are now starting to show the advantage of flying with our operators within the region. in defense, it is getting traction. south korea just selected the aircraft. india is another example. >>you had two big wins in asia. south korea with the military plane and scoot getting ready to introduce this year. this jet behind us right does t sell to the asia pacific airlines? >> this will be a flagship for us because they want to use our aircraft to open new routes and offer higher frequency of flights to passengers. we see that to help sell

aircraft. it is a very modern aircraft. we assure it is starting operation in south korea and we open the door for new markets. coming up on the show, a new report from moody's shows high levels of crime out of the uk and china. we will be joined by the head of financial crime and compliance to discuss the findings. you don't want to miss it. we'll be back in two. why choose a sleep number smart bed? can it keep me warm when i'm cold? wait, no, i'm always hot. sleep number does that. can i make my side softer? i like my side firmer. sleep number does that. can it help us sleep better and better? please? sleep number does that. 94 percent of smart sleepers report better sleep. now, save 50% on the sleep number limited edition smart bed. plus 10% off all bases. ends monday do you have a life insurance

policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. 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.

welcome back to "street signs." i'm carolin roth and these are your headlines. barclays cuts jobs to right size its structure. also, a big deal on the capital one slump as it strikes a 35 billi$35 billion deal to b discover financial. air liquide has a record high as it surges to the top of the stoxx 600 notching a beat on

operating profit. we while hear from the ceo in an exclusive interview later on this morning. bayer is slashing dividend by 95% with the minimum legal level as the giant looks to cut the dividend with the ceo saying the decision was not taken lightly. a quick look at the equity market here in europe. as you heard, it is all about corporates. ftse 100 is off 0.1% despite the performance by some of the banks, specifically barclays after the strategy update and earnings. basic resources is under foremaning. the smi is up 2%. the dax is pulling back from record highs.

bayer is a concern here as it slashed dividend. the cac 40 is seeing nice gains to the tune of 0.2%. very close to the record highs with the key numbers by air liquide. we are seeing a bit of a dollar/strength coming aboback yesterday. volumes were light yesterday. the dollar/yen was paired back to 150 level up 0.1%. we are seeing 126.04. we get the pmi later on this week. let's show you what is happening in terms of the bond picture. we are seeing the ten-year gilt at 4.075%. by and large, we are seeing the yelled yields with very little change. we are awaiting the ecb numbers at the top of the hour.

a quick look at futures. we are expecting slightly lower start to the trading session. s&p 500 is off 16 points. dow jones industrial average could fall by 83 points. keep in mind markets were closed yesterday. on the average, they he were breaking a five-week winning streak. pushing on with new research from moody's shed light on the wealth of corporate structures to be used to sanctions and launder money. according to the moody's shell company indicator, there are seven characteristics including do dormancy with the uk and china raising the most red flags. we have ted, who is the head of the financial crimes division at

moody's. thank you for coming in. staggering numbers in this report. one director is 943 years old. that is a big red flag. china has one with $2 billion in revenue and one employee. what kind of data were you looking at here? >> we reviewed the information on 500 million companies. it is important to say the vast majority of shell companies are formed for the legitimate purposes. 80% of criminal networks used legal structures. we used science with the companies to drill into the seven risk flags. that is giving people an early warning to look into potential shell company activity and crack open who is behind that for investigative services. >> let's talk about the elephant in the room here. the war in ukraine. how does that change the risk

profile? >> we have seen movement linked to the uk and other low-risk jurisdictions with the higher links. people owning and controlling companies in high-risk jurisdictions. the uk has 6% of the business population. traditional low-key environments, but we have seen more of the moment from russia moving to lower-risk regions. >> we see a lot of legislation coming through stop the type of behavior. we are seeing the u.s. corporate transparency act of 2023. we saw big legislation coming from switzerland. when there is legislation, there are a couple of loopholes. how robust is this legislation? >> you are right. you need definition and legislation. you also need gatekeepers. those that protect the system. there are good actors, but

vulnerabilities in the system. waiting for regulations to catch up, this can help you look into a low-risk company and crack it open and look who is into the sh shell. verification of data is coming from the uk. in the meantime, our customers are asking for something now to look deeper into what is happening. >> we remember the panama papers and the headlines we saw smashed acrossed world. that led to the plunge for the shell companies. is that in the minds of people and lawmakers? >> i think so. the uk exported the regime worldwide. if you look at other unfortunate location that you can inn incorporate. we are pushing for that verification. uk has more data and the uk

companies still are seen as asset. if you want to hide property seeds of crime, the uk corporation gives you that vaneer. that is still through the panama papers. we need more data. >> can i ask about the sector? this is not happening so much in the manufacturing sector, but it is happening in the services sector. is crypto factored into that? are you seeing a big surge when it comes to the crypto formation of shell? >> it is more traditional manufacturing. the construction industry is a red light on the dashboard. industries that are more cash intens intensive. they are the kind of industries people need to double down on and look closely at our customers and not using conventional tools, but looking at ways to get into the shells and investigate the companies

quickly. >> let's talk about enforcement and punishment. we see the financial task force which is vocal. is there a true enforcement punishment mechanism that is global? >> not really. the u.n. has the regulation. you have the sanctions context and sanctions of asia. that is the route looking into shell companies because it has been well reported. globally, we have patch works and specific relations on shell companies. it is more money laundering or cyber crime or fraud that customers are looking into the risk factor. >> do these international governing bodies need more powers or funding? >> it is the effectiveness of regulation to put that regulation out in a vacuum and analyzing if it is working and getting closer to the types of risk on the ground. we work with law enforcement

agencies and governments to help through detection process. both sides of the fence really with the banks and corporations and government entities who were tasked to investigate and follow the money. both customer bases need more data. >> ted, thank you. 943 years old. >> it is a fat finger error at the end of the day. it highlights the verification. it is a remarkable age. it highlights risks. >> ted, thank you for that. head of industry practice and financial crime and compliance atmoody's. moving on. a crew has been forced to abandon their ship following a missile strike by the houthis in the gulf of aden. the attack is the most damaging so far from the iran-backed group and one of three over the

24-hour period. the threat of israeli ground incursion into rafah continues to rise with prime minister benjamin netanyahu vowing to quote finish the job against ha hamas. raf sanchez has the latest from tel aviv. >> reporter: the israeli government is warning it will push ahead with the assault on the city of rafah in southern gaza during the islamic holy month of ramadan. if the remaining hostages are not released with the statement coming from benny ganz who says israel will move into rafah where more than half of the population of gass ggaza. if theyare not released by march 10th, there is a lot of concern worldwide that while

there has been global shock with the images from gaza and the scale of the civilian casualties, that the situation will only get more sensitive during the month of ramadan. now there is not a lot of optimism about a deal to free the hostages and pause the fighting before then. cia director bill burns was in cairo last week meeting with officials from israel and qatar and egypt. the israeli government pulling negotiators back saying the h hamas demands are delusional. the youngest hostage, a little over 1 year old now, was just ten months when he was kidnapped with his mother, father and older brother on october 7th. this video shows the family in

the southern city of hanunis. this video is causing fresh agony in israel. back to you. coming up on the show, it is a big day for a big box result. we will run through what to expect as earnings from major u.s. retailers kicks off. we'll be back in two. 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 next stage when you switch to shopify.

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. ♪ ♪

♪ ♪ ♪ ♪

judu.s. consumer bank capit one has stated it is planning to buy discover financial in a deal worth $35 billion. if approved, the lenders would own 60% of the combined company while discover would own the rest. this would create the sixth largest lender and could allow the company to take on jpmorgan chase and citigroup. a quick look at how these companies are faring in pre-market traileding.

discover financial is seen up more than 11% and capital one is trading down at this hour. and walmart and home depot are paving the way for the results today with costco and macy's following suit. the announcements will give a clear indication of how retailers fared in the holiday season. let's get to michael field with morningstar. thank you for joining us, michael. we are trying to get a sense of how robust the u.s. consumer is here. do you think the numbers from walmart and home depot will give insight into that? >> i think so, yes. good morning. it has been a mixed picture, i think, this earnings season so far from what we have seen. all eyes on the big box retailers to give us a feel for what is happening. i'm not sure they will complete the picture for us. things are hugely mixed.

some have fared well and some poorly. clearly the consumer is struggle thing. inflation is high, but it is coming down. interest rates are at record highs again. the consumer is feeling the pinch. >> wouldn't walmart benefit in this environment given that 70% of revenue comes from discretionary or basics that consumers need and they have been trading down? this should give walmart a shot in the arm? >> indeed. if you look at walmart, they have been surprising on the upside for earnings in the last year. if you look at the share price, it is remarkable despite the bad times we have been through as consumers. this has been at all-time highs at the moment. expectations are quite high today, but let's see how they fare. >> it is remarkable. the recent earnings from walmart over the past six quarters.

the company has met or exceeded the wall street expectations and it seems we will see another beat. home depot will have a sales drop. michael, given the upcoming election and the uncertainty around it, even if we see gas prices down and if inflation is down, how will the u.s. consumer respond to all that uncertainty also on the geopolitical front? would that show through? >> i think it already is. if you look at what is happening with the consumer space in the last year, they have been pulling back on certain items. if you look at nike and starbucks, they have been showing slowdowns. if you look at walmart where consumers know they can get good value for money, they are putting money here and flocking to here for the essentials.

some firms are losing out as a result of what is happening, but walmart are the ones gaining from hat. >> all right. let's set retail aside for the moment. let's talk about a.i. and nvidia which is set to report numbers tomorrow. everyone wants a piece of the a.i. pie. valuations are super lofty. what do you make of it all? should we continue to buy into that space? especially since we know nvidia might not be meeting the lofty expectations tomorrow. >> this is where it gets tricky. everyone is interested in a.i. we hear all the time about how it will revolutionize the workplace and make some of us redundant. actually getting into the investment of the companies is another matter. it is easy to throw money at the obvious targets like nvidia or as asml in europe. the problem is it gets disconnected from the reality and expectations get so high in

earnings season. so far, the companies have been moving which is great with the share prices. the danger shows nvidia are overvalued. as we get more into the overvalued territory, it gets dangerous. if they miss, the shares could fall. >> it gets more dangerous, but at the same time, it doesn't mean the rally can't continue. what do you think on balance the market will do given there is so much fomo out there and many people missed last year's rally and nvidia and the magnificent seven, but i should add it is no longer the magnificent seven driving the gains, but the mag five. >> indeed. there is still huge interest in themes. we look at themes and we are seeing huge inflows in a.i. the interest hasn't n't waned .

the money is still chasing it. all it takes is one earnings season slip now and that could certainly change people's minds about how much money they are willing to throw at a specific space. >> let's finish up with novo nordisk with the anti-obesity drugs here. is there value for the competitors who are also looking for the market share here? >> you are right. from one space for investors being excited about the an anti-obesity drugs and you see nov novo nordisk at the rise of that. we find that many of the names involved in the space at this stage don't show value left. for the most part, the companies

are fairly valued or overvalued. where one door closes, another window opens. we see areas like immunology or oncology which are neglected by investors. >> michael field, market strategist at morningstar. thank you. a quick look at u.s. futures coming back online after the holiday weekend. we are expecting a downward trend. the s&p could fall to the tune of 14 points. that's it for the show. i'm carolin roth. "worldwide exchange" is coming up next. bye-bye. you bring a lot back

to civilian life. leadership skills. technical ability. and a drive to serve in new ways. syracuse university's d'aniello institute for veterans and military families has empowered more than 200,000 veterans to serve their communities and their careers. from professional certifications, to job training, to help navigating programs and services, we give veterans access to support from anywhere in the world.

it is 5:00 a.m. here at cnbc global headquarters and here is your "five@5." red arrows on wall street after the major averages do something for the first time in five weeks. futures right now still under pressure. that's not stopping the bulls at goldman sachs from boosting their year-end price target for the s&p. a billion dollar deal to help the