that's all for this edition of "dateline." i'm andrea canning. thank you for watching. ♪ welcome to "street signs" everyone. i'm silvia amaro and here are your headlines. the investors look to fed chair jay powell's testimony before congress. bp shares fall after the oil giant warns investors it could book an impairment charge of $2 billion in the second quarter.

france faces political gridlock with the national assembly. he is confident politicians will find a way forward. >> we proved in the past we could solve problems and the president having the majority in the parliament would create drama. it did not. i'm reasonably optimistic a solution will be found. joe biden insists he will not be withdrawaling from the presidential race. ♪ welcome back to "street signs" on this tuesday morning. you might be telling and thinking, okay, perhaps it is a little bit quiet on the market front.

perhaps what we're looking at this stage is actually a bit of the calm before the potential storm in the sense there is a huge market event today. that is the testimony by jay powell in congress. all eyes on what sort of rhetoric he will choose to give congress members today. of course, we heard from him not too long ago in sintra where he said the west needs to cut deficits sooner rather than later. i'm highlighting that comment because we know the fed is very careful to not sound political as we approach the u.s. election in a couple of months time. the fact he chose to address their concerns on the fiscal position of the united states is a position who is in the white house. i want to take a look at movements in europe. stoxx 600 is trading slightly lower. it is a mixed picture across the boards in europe. however, i have take you to the

cac 40 in france. down at this stage .4%. yesterday, the cac 40 dropped 0.76% 0.6% on the day as investors are looking at the election and the outcome was not the worst possible scenario. we did not see the absolute majority for the far right or the far left. the hung parliament is still now posing questions about the future fiscal position for france. i want to briefly mention germany. the dax is trading lower at this stage. german factory output dropped 0.2% from may. that is leading economists to suggest they might have to cut their gdp forecast for germany. with that, i want to take you to the breakdown to see how we are looking at the sector moves.

we have autos down by 1%. early this morning, we heard from mercedes, the company said it is slowing some of their ev rollout plans because they're not seeing much demand really. of course, those concerns are spreading into some of the other names into the auto space. when it comes to oil and gas, also trading lower by 1% in the session. we'll have more details on that in a moment. one of the companies we heard from this morning was bp highlighting they could be an impairment charge there. just when it comes to that, i want to show you how shares are trading at this stage before i give you more detail. they are down 3.4%. the company expects second quarter earnings to take a hit of up to $700 million amid lower refining margins. the oil giant also said it expects to booking impairment charges of up to $2 billion as well. now, in other corporate stories this morning, we heard from

dassault systems. they cut the full-year revenue guidance after it came in 30 million euro lower than expected. they expect revenue growth of 6% to 8% after customer delays. at this stage, we have shares moving lower at 3.7%. when it comes to france, we have been monitoring all developments in paris in the last 24 hours or so. the left-wing group and emmanuel macron's group seems to have kept the far right from power. the dust is yet to settle with the race for control of the national assembly just beginning. in the first sign of the political gridlock atop the french agenda, emmanuel macron rejected gabriel attal's resignation on monday and asked him to stay on for now to assure

the country's stability. we were expecting that as the lawmakers in the french assembly try to figure out the government. the nfp aims to put a candidate up to replace him in the next few days, but that person would need support of macron's group. there are few areas where they agree. that could be a problem, really. on top of that, parliament is in deadlock with all three main parties far short of the 289 seats needed for an absolute majority. one option is a left-wing minority government, but that would be at the mercy of a no-confidence vote from its rivals. in the meantime, the french mac minister has warned of an economic decline. at this stage, we have the euro moving slightly lower against the u.s. dollar . it is hanging on to the 1.08

handle. the moves in the currency space yesterday were interesting. in the wake of the exit polls, we saw the euro slide against the u.s. dollar, but reversing some of those losses as well once we started having a better picture and clear picture of the breakdown of the national an see him assembly. let me show you what is happening particularly on o.a.t. in the wake of the election. the ten-year benchmark yield is actually moving slightly higher at 3.18% at this stage. this is also an interesting part of the market because we have seen quite a lot of concerns among investors in the wake of the snap election and macron announced it. those concerns moved higher again. however, they are now just marginally higher at this stage. overall, when you think about the picture for eurozone bond

yields, they are higher this morning. also in the context of what i told you earlier in the show as we await to hear from jay powell as well. taking all of that into context, charlotte asked the former ecb president what the nfp policies meant for france had they won an absolute majority. >> all observers could see the program of the new party was very contentious. there is no doubt in a country like france, which has no room for maneuvering today, without any new decisions and has to, i would say, be in line with the program of recovering its own credit very nicely over a period of three years. this program, if it will apply. it cannot be. let's not forget they have 180

mps and absolute majority is 289. so, it's far away from being able to apply that program. i don't see any other mps joining in to apply this program. so, i think that the observers, european and global, as well as the french observers are probably right to think there is no case for this program to be applied. by the way, if it were, as i said, it could be a catastrophe. >> the former governor there an addressing the program. charlotte has been in paris tracking all of the twists and turns of the election. charlotte, perhaps, have we seen any clarity of the government?

what direction will the french assembly actually take? >> reporter: silvia, you have the day after the party with the left-wing bloc coming out on top which was a surprising election keeping the far right out of power. now the reality is, of course, crushing on them. 180 seats is very, very far from the absolute majority and magic number of 289 that you need there. there is a question. can they put together a government? can they just agree on the name of the prime minister because we know this group was put together after the snap election. they all have different views within the group of who they could name as prime minister. they are meeting this week to try to agree on this and go forward. i had the chance and i know you see behind me a lot of activity and media scrum because the new

mps are starting their day to get into the national assembly. i had a chance to talk to a new member of parliament for the new party that was atop of the election. i asked her how confident she was that they would be able to put together a prime ministerial candidate. >> this was a brutal way and a single week, the parties that formed the new popular front were able to come together and elaborate a political platform and manifesto with 150 measures. they were able to settle a balanc the con stint and decide on a figure that

could be the prime minister to defend the platform. >> your group can top the election. 186 is far from the absolute majority of 289. >> yes. >> is your group ready to work on compromise and reach out to other centrist parties and emmanuel macron's party to reach majority to have your groups put through in the national assembly? >> i think we have a duty of honesty for people who came out to vote for us. you said it was a surprise and an awakening for citizens voting for the left wing in the republican front against the far right. when they voted for us, the candidates of the new popular front, they voted for the mani manifesto. during our campaigns, we told people about our manifesto, raise of the minuimum wage.

it would be very dishonest to go and form coalitions with the center that would inevitably make a dent in the clarity of our platform. >> reporter: that was claire lejeune. you heard from the interview that france is part of the new party and not try to reach out to the other parties. that would be the gridlock in the national assembly. 186. they are not reach absolute majority at all. difficult to govern. the other parts of the group, like the socialists are more keen to negotiate. that is what is happening this week and next week. the gridlock in the national assembly would make things

complicated and give more ground for the far right to come back for the president in 2027. all we know is for the economy, gridlock means paralysis to address the key issues, particularly public finances and debt and deficit that france has. we heard from snp about the extra downgrade if there is paralysis in the national assembly. >> charlotte, stay with us. we are joined by the global head of fixed income. first, i would like to get your thoughts, nikola, about the french debt. we have seen pressure on this part of the market and with the investors not seeing an absolute majority from the far right or the far left, but was it a pressure on french debt amid the hung parliament? >> thank you for the question. clearly, yesterday was a big

surprise and it was interesting to mention that the spread remains flat and close to the 60 bps area. the market has no specific concerns today because you see the extreme scenarios are becoming less likely. obviously, now what we need to look at is the evolution of the negotiations for the new majority. so, we are waiting for july 18 with the new parliament and ultimately, what is very important is the budget for 2025 and this is for september. the question is exactly to know what the new government can decide specifically for the deficit defined by the european commission. >> nikola, can i ask you about the spread there, the ten-year bund spread which has been tightening. with 60% of the nationwide evening, can i get your view

over the potential political instability here in france? >> very good question. so, three weeks ago when macron decided this new resolution and new elections were decided, they decided to the area. you know we touched on 86 and now close to 60. we believe we will stay in the range between 60 and 90. that's the new range where we believe the spread of o.a.t. and bund will continue. clearly, it will depend on the next decisions and depend who macron can decide is the new prime minister and what will be the next minister of finance and if we see positive signals, we can stay in the 60 bps area. obviously, if they will decide

to merger with the program, we have a risk with this new high. we are monitoring the spread very carefully. today, there is no significant issue widening. we believe it will be between 60 and 990 bps. >> when you think about the fact there is new eu fiscal rules and france is so limited, is that the next big event when you think of the trajectory of the global debt and there might be a new clash with brussels although we did not see absolute majority for the far left or far right? >> that's a very good point. you know if we estimate the impact of the nfp, it is huge on the public finance. as you know, the deficit is very high in france, close to 5.5. it is not possible to further

increase the deficit. we have to maintain the 5.5% and that's the reason why it is a balancing act for the government to potentially decide on mergers and maintain this level of deficit. it is not impossible. we can imagine, for example, a deal between reforming the pension and considering pension reform and potentially increasing tax. that's possible to partially implement some mergers from the left party without dramatically changing the deficit. that's something that we are monitoring because you know the debt dynamic has been very bad for france over the last years. if we implement the program of the npf, eventually, the debt-to-gdp ratio can go 120% which can be a big program.

>> as a market player, i would like to get your thoughts on whether these new fiscal rules are actually efficient on putting pressure on the country? for the longest time, the eu was criticized for not implements fines for countries that disobeyed the rules. now the european commission says they will see france needing a deficit procedure. are you expecting at one point that brussels could impose fines on france or is thatly sensitiv for market players yourself? >> i think it is not possible during the debt crisis where the european commission and imf decided to put pressure on greece, for example. false is another situation. i think that the political pressure, of course, we can have

political pressure, but that is not the same situation. what is important is more about the market direction. if we stay at this level, i think there is no big issue. the main issue is if we see further spread widening and if we go, for example, about 100 bps. in this case, france and the french authorities can potentially ask the ecb intervention. then we have a problem because we cannot imagine that the ecb can decide to implement a specific problem without a clear road map regarding the deficit. as you know, for example, we have the program by christine lagarde. it seems very unlikely to implement when you are on this path. or you need to come with the debt prediction. i think the pressure cannot come

really from the european commission, but more from the market and the potential position between them, the government and ecb. we are not in this situation today and what we can believe is president macron will be very cautious and we clearly will monitor the situation and we can imagine we avoid the situation for france. >> all right. we will continue to monitor the dynamics in the debt market. thank you for joining us today. that was the global head of fixed income at candriam. looking ahead at what we will discuss at the show, the singapore investor portfolio value moves higher despite the slowdown in china. we will hear from the cio after this break.

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welcome back to "street signs" everyone. i want to get a look at the markets on monday. it was interesting stateside where the s&p and nasdaq hit record highs and the major

indices were higher during monday's session. as you look at today's trading session on wall street with the key event is naturally what jay powell will be telling congress this morning. also, we will hear from janet yellen. she is telling before the house finance services committee and not on the market so much. on the political front, the president is due to deliver remarks at the nato summit today and all about the consideration if he will stay or not in the presidential race. it will be important to see what remarks the president will have as well in the context of foreign policy, too. i want to take you to the asian markets because it is also an interesting session in asia where we have the nikkei 225 hitting a new record high today and it was tracking the gains i was telling you about on wall street. they included the closing record

highs for nasdaq and, of course, the s&p. the bounce comes as investors look ahead to the release of the u.s. inflation report this week which would help shed light on the fed's rate policy pathway. today is a kquiet day in terms f economic data, but the cpi print from the united states will be very important not just for markets stateside, but for asian boards, too. i want to talk to you about temasek. they reported 389 billion singaporean dollars in the portfolio value up 1.8% on the year. the returns from the u.s. and india helped to offset a partial slowdown in china. i asked the cio where he sees opportunities for the fund. >> the more recent performance

is impacted by the decline in china where china is down 50% for the last three years. the same china market has given us good returns in the past. so, we will see these ups and downs in the short-term. the important thing for us is to have a portfolio that is resilient and we believe will bounce back when the markets recover and have sufficient diversification so if there is a problem in one area, that drag can be sort of offset partly by our exposure in other areas. that's how we look to balance our portfolio in that sense. >> when we look at the net portfolio value in singapore value, slight up particular, 3.89 and 3.82. you look at the losses from the china market. hows s has that been able to offset? >> we had good returns in markets in the u.s. and india. it has offset that and had lower

returns for the one-year period. the point i was making as a resilient portfolio, we expect the companies we have in china to sort of bounce when when markets rekcover there. in the meantime, you have balance in the portfolio for the one-year period and maintain the ten-year returns of 6% of 10-to-20 returns. again, we try to construct the portfolio that given where we are right now, we feel fully comfortable about the path forward and the strength of the portfolio companies and how they can benefit going forward. >> when we look at exposure by countries, i see china has declined slightly. what is the china strategy going forward? i think it's been described as being cautious. are you looking at more investment opportunities there? >> it is cautious because of the environment, but we see

opportunities. we reshape our portfolio in china to see the beneficiaries in the world that we see going forward. so, for example, we clearly were trying to avoid investments in the cross-hairs of the u.s.-china tensions. i like to avoid companies impacted by domestic regulations significantly. there are a lot of other areas that are neither in these buckets. a lot of these focus on the domestic market. cosmetics, beverages or consumer durables. there is a lot of consumer value on money. that's one area of focus. you can put substitutions in industrials and components and other area where is a lot of chinese companies are coming up and competing with multinationals as well. we have focus there. bio-tech, on the innovative side, you see a lot of drugs developed in china.

licensing from china to western companies has gone up 4x over the last few years. there are opportunities which we could see and our focus is really shaping up the portfolio in line with these areas and less on shock, but where we see secular trends. from markets to geopolitics, coming up on the show, the hungarian prime minister viktor orban visits moscow. we'll have more after this break.

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♪ ♪ ♪ welcome to "street signs" everyone. i'm silvia amaro and these are your headlines. european equities struggle despite the nikkei as the investors look to jay powell and his testimony before congress. bp shares fall after the oil giant warns investors it could book an impairment charge of as much as $2 billion in the second

quarter. france faces political gridlock with the national assembly split in three. the former ecb president tells cnbc he is confident that politicians will find a way forward. >> we proved in the past we could solve problems of that type. the president having not the majority in the parliament would create a demorama and it did no. i'm reasonably optimistic that a solution will be found out. joe biden insists he will not be withdrawing from the presidential race as donors become increasingly concerned about the state of his health and markets price in a second trump presidency. let's look at some of the geopolitical dynamics in the last couple days. in france, we saw marine le pen agree to join forces with

hungarian prime minister viktor orban in the european parliament. the national rally and mps will join the group patriots for europe which will become the third largest european group. the national rally candidate for france's prime minister will be president of the new group. speaking of hungary, the hungarian prime minister hailed china as the key to power. speaking on his visit to beijing, he said this was a important stabilizing force in the world and called on leaders to support dialogue with russia and ukraine. orban's visit has angered european leaders who warned he did not represent the eu interests in the meetings, in particular with the russian president vladimir putin. now, nato leaders will meet in washington, d.c. this week where the ongoing wars in ukraine and middle east, will likely top the

agenda. stay with cnbc as we bring you interviews with key leaders throughout the week. the former nato secretary-general told cnbc the summit will be an important moment for president biden himself. >> he has to show he is ready and with it and ready to lead the united states and the alliance. we will see in coming days how well the u.s. president does. in terms of what may come after, and i'm not predicting, necessarily, a trump win in november in the u.s. elections, but nevertheless, there will be tremendous pressure on the alliance, i think from donald trump, as was his first term in office as i was serving at nato. he was unrelenting in pushing the nato allies to spend more on their own defense. if he comes into the white house in november, he will see a much different nato. >> so, there's a lot happening

on the geopolitical scene. of course, we have a team in washington, d.c. they will have plenty of coverage without this week and to discuss this topic in more detail, i'm pleased to say the analyst is joining me for more. thanks for being with me in studio. >> thank you. >> i like your thoughts about orban's visit to russia and china. it was quite surprising he chose ukraine as the first country to visit. what do you think he will actually manage to achieve, if anything at all, given these visits? >> what a busy week for orban. i think he is very much keen to use the spotlight that comes on hungary with the rotating eu presidency to what he calls try and promote peace in ukraine. however, i don't think we should be expecting much from his quote/unquote diplomatic efforts because he remains firmly on

russia's side. he continues to avoid condemning russia for the invasion of ukraine. his visit to kyiv struck me as surprising. it is the first time he visited the country since the start of the full-scale invasion of ukraine. however, he quickly conceded after the trip to russia that ukraine's and russia's positions are very far away from each other. orban traveling and shuttling between the countries will not change much, i'm afraid. however, the optics for the eu are not great having one of the its leaders traveling to moscow and meet with putin for hours at the time when the eu and west more broadly are trying to isolate putin. >> the meeting lasted three hours if i remember correctly. ultimately, what do you think this will actually mean for hungary itself in the sense that viktor orban told me in brussels that someone needs to keep the

channels of communications open. does he have a point? >> i don't think so. he likes to say that there are very few countries left out there, especially in the west, that continue to speak to russia. that has been his selling point. we have to maintain dialogue between the two countries. his visit to moscow was undermining because he made the impression he was traveling on behalf of the eu. the eu and nato were very close to telling him, no, he was traveling in the capacity of the hungarian pm. i think the bottom line here is ukraine and russia continue to retain positions that are just too divergent and we are very much unlikely to see the two countries come to an agreement or even engage in genuine peace talks this year. orban is very unlikely to be able to change that. >> i also want to take the

perspp perspective of china for the moment. recently, if china wanted, they could end the ukraine war with a phone call. >> i don't believe that is the case, unfortunately. i don't think china has the political capital. xi jinping, certainly, does not have the ability to simply force putin and the war to withdraw all of his troops and restore the sovereign territory borders. it is true that russia's reliance on china, economically and financially, has definitely increased since 2022 and china is now one of the key trading partners for russia. at the same time, putin is firmly set on advancing this war and fully and nexing the region >> there is no end in sight to the war in ukraine? >> not at this time. ukraine is set to fight as long as it is able to secure finance

and military aid from the western allies. russia is set on fully taking over those regions. >> let's talk about the nato summit. what are you expecting to hear from this meeting in regards to potential new support to ukraine and also when it comes to a potential membership? >> first of all, i think it is very important to note that the fact that orban just traveled to moscow is not going to change the eu and nato position. they are efficiently on the side of ukraine vis-a-vis russia and they are prepared to continue to arming the country as long as it takes. what we are expecting from the summit is for the declarations of continued support for the country, nato is also concerned about the prospect of the potential return of donald trump to the white house in early next year. they are looking into ways to secure military aid for ukraine in the event that trump makes a comeback and decides to cut aid to ukraine. >> tell us about president biden as well. this is a very important summit

not just for nato and foreign policy, but for the president of the united states as well. what do you think we're likely to see and what sort of risk could this big summit pose for the president at this complicated time for him, really? >> yeah, it's a great question because the summit is happening at a time when there are, certainly, concerns about whether he is fit to continue running in the presidential campaign and it will be a big test for biden as well because he will be appearing for the first time at a big inter national event in the aftermath of the disastrous debate. i think he will be projecting strength and there to assure allies especially and europe that he is there to stay and that regardless of what happens with the presidential race, the democratic nominees in the u.s.,

the u.s. is supporting ukraine. >> i would like your thoughts on the upcoming u.s. election is perhaps changing some of the dynamics in the sense that i was reading this report that some german officials tried to hedge their bets as we approach the vote by also meeting officials surrounding trump. what do you think is the risk here with u.s. election for the future of nato should alliance be concerned about the comments that trump has made in the past? >> so, i would say that aside from military resources on both sides, in ukraine and russia, the outcome of the u.s. election is an incredibly important variable when it comes to ukraine's future and the trajectory of this particular war. we do believe in the event that trump makes a comeback to the white house, there would be most

likely pressure on ukraine to settle and to begin negotiations with russia. it is certainly, of course, concerning from europe's perspective and nato's perspective that the potential of a trump comeback is going to have certain ramifications for the alliance and for the bloc itself because trump, as we well know, has vaguely stated that he would, if elected, he would end the conflict in 24 hours. he has not offered any details as to how he plans to do that. media reports indicated he would do so by likely forcing ukraine to surrender the territory. >> that would be complicated for ukrainians because they want to keep their territory. >> that would be complicated for ukraine and the national order. >> thank you for joining us today. hope we get to speak in the future. that was the analyst at the

controlled risk. i want to take you to the flashes we are getting from the european central bank. the member has said that the ecb can gradually reduce rates in line with the actual and expected inflation rate which will complete the inflationary process. he also is suggesting that the ecb should be ready to respond quickly to any shocks in one direction or the other. ultimately, what we have heard so far from the ecb and christine lagarde is that they are data dependent and making decisions meeting by meeting. the line from market players thus far is that the ecb is likely to wait for the next macroeconomics projections in order to announce any new changes to the rate policy. let's see what's going to happen and speaking of the monetary policy, after this break, we will look at powell's testimony and fresh inflation readings and

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welcome back to "street signs." hurricane beryl made landfall in texas on monday killing at least three people and wiping out power for nearly 3 million people. the storm, which hit the state as a category 1 hurricane, has weakened to a tropical depression and is expected to move across eastern texas and lower mississippi valley later in the week. the u.s. president joe biden is dismissing growing concerns from democrats and party donors surrounding his presidential bid vowing to stay in the race. in an open letter to democratic leaders, he decided to stay in the race. biden phoned in to msnbc yesterday. >> i'm getting so frustrated by the leaks.

i'm not talking about you guys, the leaks in the party. they know so much more. these guys know more? run against me. announce for president. challenge me at the convention. >> amid all of this noise, markets are beginning to see an increased likelihood of a second trump presidency with the former commander-in-chief getting a lift in the polls. the ongoing ten-year treasury curve yield steepteepened. we are looking at the start of the second quarter earnings season this week. later today, we will hear from fed chair jay powell on the first day of the congressional testimony. wednesday brings a check on the chinese economy with the inflation data before the thursday's all important cpi print and the latest reading on the uk growth. the real fun starts friday with the start of this quarter's earnings season. we love the earnings season at

cnbc. jpmorgan chase and citi and wells fargo, i should say, all of them reporting. the u.s. consumer inflation expectations fell for the second straight month in june and now expected to rise 3% over the next 12 months. down from 3.2% in may. the median expectation for inflation in three year ticked up ten basis points on the month now at 2.9%. i'm pleased to say stefan is joining me for more. all eyes on what powell is going to say. first and foremost, what do you think we will hear from jay powell later on? >> hi, silvia. thanks for having me. i think they will talk about a lot of fun and kpexciting topic. i think you and i and all of the investors out there really want to know what he will say when quizzed about why are interest rates still so high? inflation is heading in the right direction and the economy

is showing some signs of weakness. why not just cut interest rates right now? i think, you know, you have to expect the kind of boring answer. he has been hammering it out for months and months. he wants more confidence that inflation is, indeed, sus sustainably going to the target. >> is the ecb getting that on thursday or is it still too early for them to get the confidence they desperately want? >> i think it is still too early. after you look at every single cpi print, yes, it is on the surface and it was a weaker report or a stronger report. just the fact there is this debate after each and every cpi report shows inflation is heading in the right direction, but not sustainably close to its target. >> do you think the fed is being too cautious here?

>> i don't think the fed is too cautious. >> it's an appropriate stance? >> i think. i think 100%. they have been consistent with the messaging. investors are all over the place. seven rate cuts and no rate cuts and finally accepting and aligning themselves to the fed's mes message. when you think about the fed, it is important to remember it is not just about the base case, they are risk adverse institution. they want to minimize the issue of doing something wrong. the worst-case scenario for the fed where they lose their credibility is in inflation rises up again. they want to be extra cautious to avoid that scenario. >> and often we talk about the divergence of the ecb against the fed. the boe versus the fed. we know, obviously,ed the fed i the most important central bank in the world. how does this divergence impact the fed itself? is this something they are

monitoring in the united states? >> i think they are monitoring it, but don't take attention. they have to look at everything in the u.s. economy. it has been much more robust than in europe or other regions. that is important about the resilience of the u.s. economy which led to inflation not going down as fast as in some other regions. that's what really matters for the fed. >> so when do you think the fed is going to cut first and how does that timing work around the u.s. election in november? >> so, i'm not really sure. i would think they will start cutting in september. i think at the end of the day, it doesn't matter that much. i think markets and investors are a bit too focused on when exactly will they cut and how many cuts before the end of the year. i think it is important to just take a step back and look at the big picture. the big picture is inflation has

been falling, but that was the easy part. by easy, it was without requiring a weak economy. for inflation to go from 3% to 2%, that will probably require the more significant slowdown in the economy. i think that's really the part that matters. >> how do you think this will actually impact the u.s. election? how is that going to impact the fed? >> it's a very difficult one. you know, i think the fed will be quizzed precisely about that today and tomorrow. they will reiterate they are independent. i don't really believe they are too driven by political considerations. >> but powell did say the u.s. needs to cut their deficit sooner rather than later. >> yes, definitely. at the end of the day, really, what they really care about is, once again, growth and inflation and kind of making sure the probability of the flare up in inflation is manageable.

>> let's see what cpi print we get later on this week. thank you for your time. as we approach the end of the show, i want to look at european markets as well. of course, we have a bit of a mixed picture in this session. the cac 40 is down .4%. yesterday, similar moves across the french market. also when it comes to germany, it is down marginally below the flat line. it is an important market to monitor as we digest the comments from some officials regarding their new budget with some concerned about the fact they are not spending as much as they promised when it comes to defense as well. we will have plenty more for you throughout the week. that is it for today's show. i'm silvia amaro. orwi ehae"s mi "wlddexcng icong up next. what is cirkul is the fuel you need to take flight. cirkul is your frosted treat with a sweet kick of confidence. cirkul

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it is 5:00 a.m. here at cnbc global headquarters. i'm frank holland and here is your "five@5." the s&p now on the longest win streak in five months as stocks hit fresh all-time highs. looking beyond tech. jim cramer makes the case for mega-cap status without riding that generative a.i. wave. beware of the bears. mike wilson of morgan stanley of the strength of the rally and the downturn. and two days of testimony on capitol hill for jay powell. and president biden welcoming