♪ welcome to "street signs." i'm arabile gumede and these are your headlines. u.s. equities close out their best may since 2003 which is driven by the chip boom. tech stocks rally as jensen huang unveils a new chip in

t'aipei. >> so many models are being invented daily. every single tindustry is pilin on. the delaware judge ruled the company may face a trial after zantac caused cancer. and mexico's claudia sheinbaum is set to be the first female president. in india, raimondi looks for a landslide victory. there have been question marks as to if europe is recovering somewhat. we have been following data particularly in the manufacturing sector this morning. all of the countries sort have looked at germany, france, italy

in contractionary territory. not much by way of change. previously sitting at the flash number of 47.4. the number that is now coming out now is 47.3. no major change when it comes to that. the weakness is still in the european economy. some might say that is the reason for the divergence in interest rates. you still have a lagging economy out of europe which may need the hike in interest rates where the cut in interest rates and in the u.s., you still have a strong economy to hold off on that a little bit longer. euro-dollar is 108.56. we have been watching this currency ahead of the ecb decision. a cut is in the market picture.

that is why the market is pricing in stability of 108. where are we today? of course, we saw interesting when you take a look at how may panned out. there has been the manarrative sell in may and go away. you saw that in the united states with the markets on the best performance since 2003. we saw significant moves higher. we are moving across the stoxx 600. in the month of may, the stoxx 600 hit record territory. will that continue? what does it mean for the boards? a lot of them are on the up as well. that's why you will see .10 uptick for ftse 100. .50% higher for the dax. yes, company news still making play here in all of this. i'll unpack that is throughout the show. of course, .50% higher for italy and spain. those two have been significant

gainers in the month of may. tech stocks have been the ones to really look out for as well and that's what, perhaps, the market will be shaping up toward, of course. in terms of sectors, this is moving the market. retail is up 1.4%. similar for construction and material. we'll get into why that is with health care down the bottom nearly 1% weaker. the weakest of all sectors. chemicals and basic resources are following suit with the movement we have been following with the basic resource story. chinese pmi coming out later today. it is interesting to turn from the positivity around the miners when the market opened an hour ago. here are the markets in the month of may. this is interesting. 2.3% higher for the dow jones industrial average. all of these ramped up particularly on the last day. in fact, the dow jones wasn't

anticipated for the uptick of 2.3%. it was around 3.5%. the last day saw significant numbers. the best may since 2003, as we have been noting, bringing the month all together, as we said, at 6.9% uptick for nasdaq composite being the best month since 2003. the rally did lose steam toward the back end of may. that ramped up again on the final day. all three majors are more than 1% below their record highs. we may have seen a dip, but it seems like the rally is certainly continuing. it was all because of many stocks, but nvidia being a key one of those. we saw the nasdaq actually hit 17,000 points and that's because of nvidia like we have been making note of. that has moved up 24% in the last 30 days alone. the month of may have been a significant push higher for the

company. again, that is just showing you they are launching new chips and they're still making money from the a.i. play and everybody is spending money from the a.i. play. is nvidia different? is the surge different? you see that on the back end of may, but it looks like the uptick is still on course. here's what nvidia looks like pre-market following jensen huang's announcement. 2.5% higher. it is one of the key reasons why you see the nasdaq head toward 17,000 points. in fact, nvidia's market cap surged by $350 billion since it reported its first quarter earnings. that was just two weeks ago. two weeks ago. $350 billion. according to analysts, the drive was brought on by a feedback of

trading options. nvidia did announce a new generation of a.i. chips as i have beennoting. one was a surprise move. just three months ago, it announced after the most recent launch. the chipmaker unveiled a ruben chip. the successor to the blackwell chip which is currently in prod production. ruben is expected to be rolled out in 2024. jensen huang said they will release new models to strengthen its market dominance. >> it is a new industrial revolution. we have now a new factory producing a new commodity for every industry that is extraordinary value. the methodology of doing this is scaleable and the methodology is

repeatable. notice how many generative a.i. m models are being developed daily. >> let's look at the chips. all significantly higher. sd micro is 2.4% to the good so far. all of those enjoying the benefits and seeing a ramp-up in development. l asml is 1.5% to the good. let's unpack the market with thomas watson at aberdeen. thomas, what did you think of may? everybody talks about sell in may and go away. does that still have sflegs. >> legs?

>> i think the bull market might fade away. we have a lot of data that did not give us a clear sign. the pce figures on friday, there is a bit of something for everyone there. the consumer spending is falling versus service inflation being persistent. prices will remain high for a longer period of time. we will have cap on with the spending falling. that could lead to a few more roadin readings where you see a sideways movement. you saw fed futures with the fed at 48% the cut would cut in september. after that data, it was 53%. it shows market did not know what to do with the data and it is difficult to get a head or tailwind. >> the data is actually not

necessarily sure, but whatever the fed then says is going to determine what the market this. >> it seems that way. it has been most of this year, anyway. when we came through in 2023 and 2024, it was all about the fed cut rate in march and subsequent cuts at all. you are mentioning nvidia on and it seems although the fed is driving the market in the background, it seems companies like nvidia are pushing markets higher. it is interesting. you talked about the market cap for nvidia. i see after one afternoon, they grew the size of shell on the ftse 100. it is crazy what they're doing. >> on friday alone, the market value of the entire ftse 100 if you wanted to put that in per spec perspective, amazon and

nvidia combined. we are not seeing that bottom up trade. would you even look bottom up at this stage. >> definitely so. we tend to buy trackers for the u.s. it sometimes to be the magnificent seven are still driving markets with nvidia at the helm. we believe the market reaction should brouaden out. we need the first fed rate cut. you should see small caps p perf performing. >> we anticipate a rate cut from the ecb this week. almost dead certain. i can't put the two words together, but we have. almost dead certain. what happens after that is the big question mark. your thoughts? >> aside from being almost

certain. there has never been a well telegraphed cut other than this one. the ecb will cut rates. this is getting hotter than expected. it may step a bit more cautiously going forward. probably what we will see if there is a hawkish rate cut for the ecb that will not commit to the rate cut yet. i don't think we will see a back-to-back cut. if you look at the ecb, wages are strong and gdp is on the move again. what will happen is you get the rate cut and it will sound hawkish and we will get one more. >> is the work done? >> not nearly. we are still not near any major economy. >> you are getting a cut. you are getting a cut coming

from the ecb. we had restrictive territory. we're good. now we've done the job. we've fought inflation sufficiently. now we can cut. >> it is not that clear for central bank. we will telegraph this as a cut. i don't think they will go into the rate cutting cycle yet. it will be a slow process glchlt markets are expected to go higher across europe? >> i think so. on our desk, we are buoyant now. we increased in january and february and now week 're looki >> thomas, great having you on set. thomas watts at aberdeen. and a delaware court ruled that 70,000 lawsuits over the discontinued drug zantac could continue. the allegation is the drug

causes cancer and gsk disagrees with the ruling and will appeal. and shein is preparing to file paper work for a london float this week according to sky news. the ipo could value the company at 50, 5-0 billion pounds. and gamestop shares are surging in pre-market trade after the meme stock mania of 2021 which was dubbed roaring kitty. revealed a $116 million bet on the retailer. coming up on the show, we will have the latest from the annual summit after the break. 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

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credibility check on president macron? >> that's exactly what it is because the market sees the bonds unfazed this morning. especially after the deficit came above 5.54% gdp last year. we saw that moody's and fitch downgraded france last year. one concern is the debt is higher than 2023. can president macron champion the economic reform and the one that would avoid the french economy with the high deficits figure? that is important as well. bruno le marie said this is the price to pay for the protection of the french media that we put after covid and the inflation crisis. now they would continue with some of their key measures. they said there would be no

austerity and no taxes. and continuing with the employment benefit announced last week. trying to save money. announced 20 billion euro in cuts. they are looking for more next near. the question of credibility and context is important here. we are in the final days of campaigning for the european elections. we have certainly seen some of the top competitors to president macron latch on to the news to damage and criticize president macron and his government, particularly the far right, in the lead above 30% of voting intention. that's ahead of president macron's 16%. le pen says they are as c competent as arrogant. it wasn't on eu issueses, but domestic. that is giving them extra

ammunition as well. we have seen in the national parliament two non-confidence votes which is unlikely to be successful. it's an extra platform to criticize the government and the credibility specifically on the economic issues. >> if there is ever a test of macron's leadership, this is definitely one of those times ahead of the european elections as well. charlotte, thank you for the time. i appreciate it. let's move on to another one now. iata wriraising the global prof as it is pictured to grow 11.3% for the year. that is to $55 billion. that is with industry revenues expected to reach, wait for it, record highs. dan is joining us from the iata annual meeting in dubai. dan, global flying and all of those aspects.

it's all back. >> reporter: that's exactly right, arabile. the numbers you point to are interesting because they reported a $120 billion loss. the latest numbers for iata reveal a firmer footing. it expects record revenues and record costs. fa fares are going up. i had the opportunity to sit down with iata's willie walsh to talk about the industry right here and right now and his expectations ahead of the critical peak summer demand travel period. listen in. >> we are in good shape. you would say excellent shape, but the industry at the global level is profitability. for the first time, our regions are making a property.

profit. still more work to do. our margins remain slim. i think we're heading in the right direction. >> talk about the profitability outlook. the industry is in tact, but what do the numbers tell sus? >> we are looking close to $1 trillion u.s., but also report costs. the net profit is $30 billion. that's the latest estimate. big figure. $30 billion tu.s. you look at the net margin of 3.1%. still thin with the margins. you express it as profitability per passenger is $16.14 per passenger. price of a coffee in this hotel. the margins for the industry are still very, very slim. there's more work that we need to do particularly to get to a level where we are returning our

costs to capital. there is still a gap between the capital and cost of capital that the industry is looking at here. >> reporter: willie walsh weighing in on the year ahead on global aviation. what was interesting is he said a record 5 billion people are expected to travel by air this year. that's great news for the airlines, but one of the major issues discussed on the ground is the issue of capacity given the supply restrictions that we see from both airbus and from boeing. the aviation executives i have been speaking to today are concerned about the lack of airplanes rolling out of the factories because it means less kcapacity for passengers. it is something to watch for the rest of the year. the other thing we're looking at as well is safety. this has been critical. a key part of the conversation on the ground here in the aftermath of this deadly singapore airlines turbulence

incident. it is responding and tracking that investigation as well. there will be a new tool for pilots to get a clearer picture of turbulence incidents before they happen and the idea to protect passengers and keep them safe in the skies from what is expected to be an increasing frequency of the turbulent events. arabile. >> record profits, but still a lot really at play here for the industry. dan, do stay with us. we need your expertise on the next story. opec plus members agreeing to cuts of 3.6 million barrels a day through 2025 and eight members making voluntary cuts which includes saudi arabia and russia. they said they would unwind reductions from october. saudi arabia's energy minister warned the easing of voluntary cuts may not happen if market

conditions worsen. dan, this is, perhaps, unspruns unsurprising, that it gets worse with the prices just below the $90 a barrel mark. >> reporter: that's exactly right. two key points on this. i joined a briefing with his royal highness over the opec's recent decision. he was explaining how we have seen the output curbs rolled over. the idea here is to provide stability and balance to this market. at the same time, analysts at goldman sachs said this is bearish for oil and that comment was also echoed by analysts and they said it is bearish oil because opec's producers will add barrels back into the

market. goldman sachs and others are concerned if we saw barrels coming back and the market doesn't balance out, that means we could see downside pressure. opec is not concerned about this. it is sticking to what it knows best which is the management of the oil market and dismissing the bear ish comments. what is also interesting is the market reaction. crude is swinging off the back of the decision which would suggest the market is still trying to interpret what it means. in terms of the other big headlines, it was a big win for the uae which won a quarter increase. it will trointroduce more opec . it will meet once every six months instead of once every month. it should hopefully help to

provide the market with more clarity on exactly what the output levels look like moving forward. the messaging from the group is they are not concerned with the bearish views off the back of the decision. >> dan, thank you so much for that and sharing the developments in the oil space. coming up on the show, we will have election updates from around the world as results trickle in from india and south africa and even mexico coming up next.

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way. cirkul, available at walmart and drinkcirkul.com. welcome to "street signs." i'm arabile gumede and these are your headlines. nvidia popping pre-market boosting european tech huang un generation a.i. chip in t'aipei. >> so many models are being invented, literally daily. european stocks starting june in the green with the u.s.

equities close out the best may since 2003. a lot driven by the chip boom. and gsk sales slump after the judge reveals the drug zantac causes cancer. and the gamestop's roaring kitty reveals a $116 million bet on the company. while the ecb may be closest to cutting rates, the question is when the bank of england is itches to put forward a rate cut this year. the manufacturing data will play part in all of that. at present, we have been

following the other countries, including the eurozone manufacturing data which is in contraction territory. for the uk, 51.2 is the mark. just above the expansionary territory. the flash figure was 51.3. yes, a slight flblip, but stilln high. returning to growth and prices rising by most in a year for the united kingdom. uptick on that front. that would offer the bank of england it would need to be able to cut interest rates very soon. quickly taking a look at how sterling is looking. 127.13 is pretty much where we're seeing the currency then. it had been weighed down by expectations of when the fed might cut as well.

that had played into where we see sterling right now. as you can tell, just some marginal movement for now post the pmi data. on to the european market picture. we have seen basic resources managing to move higher. that failed with energy and tech stocks on the up there with .30% of gains for ftse 100. rallying higher there. above 8,000 is the cac 40. near 1% of gains as well for the dax which has been pretty interesting to look at. overall, the market is heading toward the picture for what europe will look like after the ecb decides whether to cut or keep interest rates the same. all expectations are for the cut of 25 basis points. jd sports sitting atop of the stoxx 600 8% higher.

and we see the pound and sterling against the u.s. dollar at 137.15. the rate cut anticipated and 157 is the mark against the japanese yen. on tenterhooks with the intervention in that market. treasury yields fell on signs of stabilization in the month of april. it looked like we were headed toward 5% on the lower end. the two-year yield at 4.96. coming off that. you are seeing a drop off in the others as weall representing th interest rate cut anticipated. the question is when the next cut may come into fruition. the benchmark for europe, the ten-year bund from germany is 2.62. this week's data cross the

united states, the big data point, u.s. manufacturing todat but the u.s. jobs numbers is the number we look out for ahead on friday. the markets are considerably higher for the month of may. will the uptick go as well? we may start that way, but how much more is set to be in play? south africa's anc lost the parliamentary majority for the first time receiving just over 40% of the vote. a coalition government is now on the cards with anc saying interest started negotiations with all major parties. the head of research for africa and the middle east and chief economist at standard charter is joining us now. r razia khan, how seismic is this political shift said to be now? >> thank you, arabile.

everyone knows we are in unchartered territory although there have been some polls pointing to a possibility of the anc loss of the overall majority. some of the polls put the anc in the low 40s, but no one anticipated this would be the actual election outcome. the most surprising feature of all, the strong support especially for the newly formed mk party. a different landscape from that perspective. one investors had not anticipated and no one thought we would be seeing this importance being placed on the formation of the potential coalition in the next fortnight. >> despite the parties, it's options feel limited for the africa national congress. is that what you get a sense in order to grow its base and

country? >> it is important for investors and market participants to get a sense of what has happened here. what we see is between the anc and some of its early offshoots, if that is the word to describe the economic freedom fighters and the newly formed mk matter with a share of 64% of the vote in total. the ultimate take away from the election results is not the south african politics is shifting to the center, but it is a sense of it is quiet and unhappy with the status quo and growth was too slow to deliver on the aspirations of the people and there is a real willingness or real desire on the part of those who did turn out to vote to see some sort of change and some accelerated transformation. of course, this creates an element of uncertainty for the anc as it seeks coalition

parties. markets might rally on the prospect of the tieup, but does it think big picture and what needs to do to reclaim the center and really secure its prospects for the 2029 election. >> razia, you want to look at the currency as we have the image there. the rand was the best currency up until pre-election. now with the loss of around 2%, analysts call this signs of a maturing democracy. how much of this is a stifle to the economicing growth to sout a africa? >> this is reflected in the price action with the currency. if the anc, which would be elected for a further term, that would be more of a focus and

driving of economic growth. we know growth has been held back by the shedding of the power crisis. we know there had been very, very serious problems at various state-owned enterprises in the logistics and transport sector as well. we know there was some hope maybe we might see things happen in a different way going forward. now, i think, that hope has turned into a realization that there needs to be much more urgency behind the transformation. markets are undecided at this point. many market participants is uncertainty. uncertainty is something they do not like. as much as they like the numbers alone and the anc and da coalition makes sense, that would be market friendly and markets would rally on that. that is a lot more to think about here. >> razia, one of the things i look at here is if the african

national congress is anticipated to meet tomorrow and president ramaphosa doesn't survive that meeting, what does this mean for south africa? >> this is a clear negative for the market. there is a potential change in the leadership of the anc i itself. president ramaphosa did a lot to rally sentiment last night with the announcement of the election result. it was, perhaps, a graceful acceptance of the election result. a reminder that the importance of the constitution is paramount that south africa remains a democracy. really highlighting a lot of the achievements that south africa has made so far. let's not forget from a market perspective, president ramaphosa is seen able to drive precisely the kind of change that might be

needed while holding the center. if we see a shift in the anc at the moment, there will be investor concerns, but maybe we see a tilt in anc policy. it's going to be all change going forward and that would not beitive outcome for markets. >> a lot at play here, razia. razia khan at standard chartered. now, it is not just south africa, going through elections. even out of mexico, claudia sheinbaum is on kourgcourse to e first female president. exit polls are predicting sheimbaum's victory although the opponent has not conceded.

the uk's opposition labour party will cut overall migration levels if it wins the election. it would reduce the need by boosting the skills of british workers, but not providing any specific targets or a time scale for the pledge. the labour party lead has remained steady with the ugov poll released showing the party with a 25--point lead over the conservatives. to india now where exit polls are suggesting that prime minister narendra modi could increase the majority in parliament. results are due tomorrow and if con confirmed, could provide a boost to the financial markets in hopes of the economic reforms and political continuity. voters in the eu will head

to the polls this week to elect the next european parliament which suggests strong gains for the right. silvia is joining us for this one. the right is a question mark of how much more will they gain or will they lead on the back end of the elections? >> this is no doubt a pivotal election for the eu. it is coming at a time when the bloc is searching for a place in the world. when you think about the geopolitics and the eu, there are a lot of question marks there. let me get you through the technical marks. european voters will head to the poles on thursday in the netherlands. then the election lasts until sunday. on your screen, you see the current formation of the european parliament. 705 lawmakers sitting at the ep. the question mark here is whether the epp, conservative

party, will continue to have the majority of the seats in the european parliament. opinion polls suggest that is likely to be the case. they are on track to remain the most voted party in the european parliamentary elections. the question is whether they will have to form a coalition with far-right policymakers. if you look at the polls, it is very clear that the mainstream coalition which has governed the eu since the 2019 elections, that is likely to be challenged at this vote because we are seeing far-right politicians getting more support. i want to raise attention to the voter turnout because this is a question. turnout seems to be quite low in these elections. it increased slightly from 2014 to 2019.

however, it just managed to cross above the 50% threshold. why should we care about the vote? it will have an impact on 450 million people and on top of that, it will determine how the eu will cooperate with the u.s. and china and what sort of policy the eu will have with climate change and defense spending. there's a lot on the line here, arabile, as we approach the european elections. >> you will have the coverage for us. thank you, silvia. i appreciate it. coming up on the show, a landmark moment for one of the uk challenger banks as monzo posts the first annual profit. the ceo joins us for a first on cnbc next.

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2015. i'm joined now by the ceo ts ra anil. thank you for joining us. there was a question around you being a growing concern. that is out the window. >> arabile, thank you for having me on the show. isn't it fun to prove the i naysayers wrong? we have the first full-year profitability with 400,000 small businesses. a huge capital raise and exciting product. >> there's the investment side that you really notched on to, but what about lending? is that a key part of your business or where you see whthis going? >> arabile, if i could pback upa

bit. the mission is making money work for everyone. what that means with the product vision is the idea that in a single place, you have meet all of your money needs. save and invent all in the place that transform the relationship with money. if you keep that as the back drop, investing that you spoke about is one of the many ways we will meet your needs. investment is a great product you use to bring to life. when we sat out with the investments, we learned from tour customers and listened from the ustomers. customers told us there were two reasons they were keeping an amount of savings in cash and not investing. they believed investing was not for them. they believed there was too much information and they could not

process it or understand inn ve inninv inninvestments. we helped educate people on the language and we said you can start with one pound. that's the power of solving investments. borrowing is a core need. we will give them the ability to borrow responsibly. >> one of the key things, ts, that you have to do now is try to break into the u.s. market. the company has tried it before. you have been brought in to help in many ways to do that. do you feel the way you will do it, which is through a partnership, to bypass the license liapplication is that going to hold you up?

>> good question. first of all, our strategy is focused on the uk first. we see more runway over here. more products and many more times the size of the balance sheet and p & l today. we sit alongside with that is the need to grow. in the u.s., to your point, most of the fintech world in the u.s., works off the established model of working with a partner bank. we applied for a license previously and chose to pull out of the process because there was not any sign of getting that license in any meaningful point in time. the customer needs monzo to manage their money and make their money work harder for them. that is the strategy we are kwo focused on right now. a partner bank brings in the capabilities. we do the bit that we are good

at leveraging the power of our technology to service our customers' needs. >> does that mean if you go listing, you would go listing in london because you have a banking license here? >> the ipo question. arabile, it is way too early to answer that question. we are well capitalized. we had a huge capital raise a few weeks ago. europe's largest in the last year was well over $600 million of capital raised. we don't need to raise capital any time soon. there will be a time for us to think about the ipo and making decisions where we list. that's down the road. for now, we are listening and learning and scaling the business. >> what would you need to make that a more concrete conversation? >> time. i think for now, we just want to focus on scaling the business and some time down the road. we will make an amazing public company one day. the time to really build out the

ipo strategy and life of the public company will be down the road as well. >> open to m&a activity? if you would add services to monzo, what would you buy or bought otherwise? >> our strategy is organic. we see enormous organic opportunity. we have proven we can do this as scale. of course, there will be consolidation in the fintech industry as i suspect. we are keeping our eyes open if we find the right company. the bar is high. it is important to us that the rationale for doing an m&a transaction makes sense, but the values st s of the company and product built. we will move as it shows up. >> ts, why do you think it is undiff

difficult to unseat the larger banks? technology is there for everybody to use. they want to do the banking on the phone a little bit. it hasn't been easy for challenger banks. >> we are just getting started. essentially, all of the challenger banking is a few years old. we are clearly showing at the scale that incumbent banks should consider themselves challenged. arabile, i see this as a race. the price is to serve customers over time with the money needs. that's the size of the prize. financial services around the world makes it one of the largest sectors globe globally. the size of the prize is big. it is a race between two groups. incumbent banks and if they understand technology and deploy

at scale and provide amazing opportunities to customers or players that are new, challenger banks, and whether in addition to understanding technology, will they get banking at scale? we are showing it is possible to do both. monzo is bringing the best of tech and the best of banking. we expect to bring every bit of the best banking smarts to the problem as well. >> sure. >> really win the customers' heart and minds with technology. >> ts, it is an interesting environment. i think there is a lot of work that needs to be done. i appreciate your time. ts anil, ceo of monzo. that bngris us to an end this morning. i'm arabile gumede. "worldwide exchange" is next. energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at

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it is 5:00 a.m. at cnbc's global headquarters. i'm frank holland and here is your "five@5." investors looking for the next catalyst. chip stocks doing something for the first time ever as we kickoff a new trading month. nvidia and amd rollout new chips with the very aggressive timelines. opec looks to keep the floor under oil prices after the latest output decision. later, roaring