on: i think shed be pretty proud of you. max farver: i hope so. ♪ welcome to "street signs" on this friday morning. i'm silvia amaro and her are your headlines. weaker than expected u.s. factory data. new york braces for another day of pain with nasdaq futures more than 1% lower ahead of today's non-farm payrolls data. amazon sinks on the back of the first revenue miss in nearly

two years while apple overcoming china to booa 5% sales boost. and the ceo explains the decision to cnbc. >> we decided to leave with our shareholders and i think that makes sense. very good morning, everyone. what a week it's been for equity markets. we start with all of the action from central banks. the bank of japan increasing rates and the fed saying they are keeping rates on hold, but perhaps cutting them in september. then we heard from the bank of england cutting rates by 25 basis points. over the last 24 hours, growing concerns about the state of the u.s. economy after weak

manufacturing data and actually at this stage, some investors are raising the question about whether the fed should have cut rates this week. so that's your back ground as we look at today's equity session here in europe. at this stage, we have the stoxx 600 down 1.4%. yesterday, the stoxx 600 was also losing and ended the session down by 1.2%. at this stage, it is, indeed, on track to end the week lower. let's see by how much once today's session is over. let's take a look at the main bourses in europe. we have to analyze the markets. a they did go ahead with the rate

cut. we are seeing more pronounced moves to the down side in germany as well as in switzerland and italy. i want to take you to the sectors because as we are digesting all of this activity on the economic front and on the central bank policy front, there is corporate earnings being released at this stage. it is important to take a look at also what is happening in the corporate front. at this stage, however, when you look at the european sectors, utilities is the only one at the moment above that flat line. look at tech. the worst performer down by 3.2%. continuing that negative move that we are already seeing stateside yesterday. the tech sector was the worst performing stateside as well. just to give you an idea of the numbers, tech was down by 3.3% stateside. those concerns continue to fuel also here in europe. we are also seeing financial services down by more than 3%

and also some negative moves when it comes to industrials. i also want to take you to the chipmakers because there is some interesting dynamics here. i told you earlier how there is growing concerns about the u.s. economy, but yesterday we also her heard from intel. coming out with a drastic announcement reducing their head count and that is fueling the concerns of the overall chip sector, too. when you think of the names in europe, asmi, the biggest loser among the chipmakers down 2%. asml also down by more than 6%. when you think about the chip sector here in europe, arm also provided us with down beat revenue forecast yesterday. the shares also tumbled. one of the questions i have one one of our guest is this morning is what is next for the sector? is this pain here to stay? ultimately, what is the outlook

as well? some of these names have been fueling a rally this year. i also want to take you to u.s. futures because it was a very interesting session stateside yesterday. to give you an idea, the major indices were down on thursday. the russell 2k posted its worst day since mid-february as well. at this stage, as you see on your screen, we are on track to see a negative start to the trading session on wall street and, of course, today we will get new non-farm payrolls figures as well. will that continue this concern around the u.s. economy? we shall find out. of course, it is an important moment to understand what is the outlook for the u.s. economy. are we seeing potentially a recession in the near future? now, it has also been a very interesting session in asia. jp is joining us with a look at the market reaction so far in

asian equities. jp. >> good morning, silvia. not a good morning for asian stocks today. we were first in line to feel the turbulence that is, as some say, american made, especially with the concerns of the u.s. economy with the dower ism manufacturing data coming from the united states. also the tech shares falling for a myriad of reasons. you mentioned intel saying they will have to cut the work force significantly and very disappointing quarterly report card that weighed on chipmakers. in asia, nvidia may face anti-trust probe of the allegation they are abusing the market dominance. also apple which did post slightly better than expected revenue, but a drop in iphone sales in china.

also, apple losing their position in one of the most important smartphone markets in the world. that weighed on foxconn, the supplying out of taiwan and tsmc. that fed into how the other indices in asia fared. you saw the kospi with significant losses. not as deep as the market captured everyone's attention today. that is the japanese nikkei 225 which plunged more than 2%. it is a lot more complicated than the yen strengthening that weighed on exports injapan. the yen benefitted from the safe haven play which led to the yen flexing this friday and there are concerns that the stronger yen will weigh on profits. keep in mind, toyota and mitsubishi said in the recent report cards that they saw the significant bump ups.

the yen is a favorite carry trade and you are seeing a lot of people who have gone short of the yen in line of the positions and the markets are the biggest losers in asia. silvia, back to you. i hope europe is faring better than we were. >> thank you, jp. let's continue to look at what is happening in the chip sector and the overall tech space. nvidia is moving lower in fr frankfurt trade. one of the probes first reported by the information comes after rival chipmakers alleged it abused its dominant market position. the second run by politico, saying the u.s. lawyers are investigating the start-up that was announced in april. the firms did not disclose a dollar value. techcrunch reported it could be as much as $700 million.

we told but this story earlier in the show, but i want to give you more detail about intel. the shares sunk as much as 20% in extended trade after it announced it would cut 15,000 jobs as part of the $10 billion cost reduction plan. this off the back of the dismal second quarter earnings report. the chipmaker missed on earnings and revenue which came in at $12.8 billion for the quarter. our u.s. colleagues will be speaking to the ceo at 10:00 p.m. cet. do not miss that conversation first on cnbc. amazon is trading sharply lower in extended trade after posting its first revenue miss since october 2022. with future prospects leaving investors cold after the sales forecast came in light for next quarter. the cfo brian olsavsky pointed to the busy news cycle.

saying customers only have so much attention. our inhouse tech reporter arjun is joining us. what should we make from the latest announcements from amazon? how concerned should investors be? >> i think it was a pretty decent report. the problem was that e expectations were amazon had a run-up in stock ahead of the earnings. the focus is on amazon which is investors want to see costs under control and strong growth, but also investment in the future. now, if you look at amazon's report, all eyes are always on the cloud business. revenue was up 19%. all in all, it feels strong. it was a beat. actually, when you look at microsoft and google, they reported stronger growth. why isn't amazon growing enough? it is the biggest player in the market. it is coming off a very big base. at the same time, the core ecommerce business was weak just

5% revenue growth. you mentioned the cfo blaming it on consumers being distracted. also, they are facing competition from the chinese players like shein and temu which have come into the market. this is not a major reverse of any trend. that is the theme through the earnings season. i don't think businesses will sort of stop digitizing. perhaps the pace might slow. you are seeing continued investment of a.i. >> i was going to ask you about a.i. to what extent this is fueled recently with focus on a.i. and perhaps amazon might not be the stock you want to buy in case you just want to be bullish on a.i.? there is concerns about what they can actually deliver on that front. guide us through the plans for amazon. >> amazon, we heard they were

continuing to spend on money with infrastructure and data centers. that points to the fact they are trying to build up the a.i. capabilities. you need the data centers to rent out the cloud to companies to buy. when they are looking at it, the focus is on nvidia and amd in terms of the picks and shovels and the chips powering. the training of a.i. and how does that application get delivered? that is where microsoft and amazon as well. i think the amazon a.i. story really hasn't been as, i would say, as big as microsoft has been. not as headlining given openai and others talking about it quite a bit. it is clearly an area that amazon is focusing on. >> stay with us, arjun. let's look at apple now after posting a beat for the fiscal quarter with revenue and

earnings per share above estimates. is iphone sales came in higher than expected, but dipped around 1% on the year. now, i'm pleased to say that neal, our research vice president is joining us to discuss what is happening in the tech space. neal, good morning. thank you for joining us today. i would like to start by asking you, really, about what is your impression having heard from apple, what is the outlook for this stock at this stage? >> for apple, i would say that revenue is pretty stable with respect to one part of the business which is growing handsomely. it is not the revenue. if you leave out iphone, mmac and

ipad aside. as you go toward q4, you would see some sales from iphone as usual for the holiday season. i would say the outlook depends on how apple reviews its strategy. >> i would like to look at cap ex. when you compare the numbers from apple to some of their peers, their investments are quite lower. ultimately, what i would like to understand from you is whether you think that apple can actually play a role in a.i. going forward? a significant role that is. >> right. that's very fair comment. if you look at apple's r&d

revenue, it will grow even more with cap ex. they want to have their own data and that will require a lot of cap ex. you will see that percentage of r&d will increase as apple rolls out the strategy. it has to be focused as well. what will work in the u.s. will not work in europe or in india or china. they will have to invest in cap ex. and they have the apple intelligence on the cloud portfolio. >> neil, it is arjun here. i want to pick up on the artificial intelligence. what is the strategy to monetize this? is it through the services business? is it a subscription model?

how do you think that pans out? >> that is a good question. we have advertising on apple. this is a high tech investment and high cap ex. what you have on the device is fine, but there is a hybrid element and a cloud element. there will be a cost and apple has to pass on the cost with the hardware or in terms of software services. for instance, it makes it more lucrative for apple to pass it down with the apple subscription model. we believe apple will consider $10 to $20 per user per month for apple intelligence to have more premium features and the p beauty of a.i. is, as you use more and more, it learns about you and you get locked into the

model itself because you can't bring your apple to android. it is a lock-in for apple. once your model is trained to your data, that is where you start using more and more and you get used to it more and that is where apple monetization takes place. >> let me just pick up on china. this is one of the bad points of the report with sales declining around 6%. clearly, there is a big revival of huawei in china with the devices eating away at the apple share in the market. is this just a short-term blip for apple in china or is this a longer-term structure if huawei poses a significant challenge to apple in that market? >> again, that's a great question.

how does it grow its portfolio? there's a gap between apple products and the android products. as well as huawei which is increasing. everyone is moving on with more a.i. features on the device. huawei will be stuck on 7 nanometer. until then, i think this is just a temporary blip for apple. huawei is competing well, but i believe within the next two years, if huawei cannot get access to the latest and greatest chips, i think the gap will increase between them. >> all right. neil, thanks for your thoughts. the research vice president of counterresearch and our own

arjun kharpal. a 70% of operating profit for the quarter ending june as it sold half as many of the switch consoles. coming up on the show, we get a check on the skipton profits as we chat with the ceo. stay with cnbc.

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welcome back to "street signs." the bank of england delivered the first rate cut in four years taking the key rate to 5% from 5.25% and sending the pound to a low against the u.s. dollar. the committee voted by a majority of 5-4 in the favor of reducing borrowing costs from a 16-year high calling the decision quote finally balanced. the hawkish cut came amid a flurry of economic projections. the central bank raised the gdp forecast from the previous forecast of 0.5% back in may.

on flinflation, it expects headline inflation to rise 2.25% in the final quarter of the year before falling back to 1.7% after two years and 1.5% after three. this is well below the boe's target. the 2% target, of course. the governor acndrew bailey tol steve inflation triggered the decision to cut rates. >> for me, it actually wasn't a specific new piece of information really that changed things. it was actually confirmation really of what we have been looking for which is further evidence to support the view we've taken while we're seeing persistent in inflation facts, that persistence is less than we fa feared it would be and it seems to be moving along in the right direction. so, you know, we're seeing services inflation and, you know, wage numbers come down quite gradually.

they are coming down quite progressively. it was further confirmation of that track. we will have to continue to watch this very carefully. we have quite a way to go yet. it wasn't a new piece of information that changedfirming travel. skipton has posted a 5% jump in profit before tax which it says reflects improvement in the uk housing market. mortgage balances grew almost 11% on year to almost 30 billion pounds. i'm pleased to say the ceo for skipton group is joining us for more. good morning, stewart, and thank you for joining us. first and foremost, looking at the information you published this morning, where did the guidance take place in the first six months of this year? >> thanks, silvia, thanks for

having me on. we have been focused on three key areas. the first is to help more people into homes and as you said, we delivered strongly with the mortgage performance there. we were actually 41% of lending is to first-time buyers which we are pleased about. that is one engine of growth. the second area is helping people make their money work harder and there we have seen our deposit balances grow strongly at 17%. also, our advice conversations to customers where we help move their money out of cash depending on their personal circumstance is up 9%. that is additional engine of growth. we have a good lens on the uk housing market and it has had a strong year on year performance. >> i would like to understand a little bit better what is happening when it comes to first-time buyers. as you explained, they are 40% of new lending took place to first-time buyers. i would like to understand the

outlook here given we have a new government in place and introducing new measures to basically lead to more housing building. we are also getting new rate cuts from the bank of england. what is the outlook for lending to first-time buyers? is this likely to increase in the next six months? >> it's a really topical question because we launched analysis last week and affordability index to show a structural problem in the uk where we don't have enough houses. therefore, those in houses are better able to afford to carry on growing their housing stock than it is possible for people to get on housing stock. there is a structural problem for first-time buyers. all those things you mentioned will help. as interest rates come down and the trajectory of interest rates comes down, then mortgages become cheaper and more affordable to people. that will help from the financing side.

structur structurally, as more houses are built, there will be more to buy. i do see a little bit more confidence returning to the market and better opportunities for people to buy, but it will take a number of years, possibly decades until the structural problem has gone away with the planning reforms are successful. >> because it is a structural problem and also thinking about the fact that the rate cut we got from the bank of england yesterday was 25 basis points, what sort of mortgage rates should buyers expect by the end of the year? how much relief, if any, should they expect over the next six months? >> the majority of mortgages in the uk are fixed-rate mortgages usually over two or five years. they look at the swap markets and you look at what is happening with inflation. the inflation month on month will dictate the course. our pro diedictions are similar what andrew said earlier on the

path. we anticipate further cuts this year which will moderate rates in the market to something beginning with a four rather than something with a five just now. u ultimately, that will depend on the person's circumstance and what the issues they need in their loan and inflation. >> i want to look at the other side of the equation which is focused on savings. i looked at the two-year fixed is offering 4.35% at this stage. however, when you compare some of the peers are putting forward at this stage for a two-year fixed isa, there is an offering of 4.6%. i would like it understand the reason behind your lower interest rate here. >> yes, so we have been very successful with our offering. it is more than a rate. we have 82 branches. we like to be competitive on

rates. the reason we do is because we are a mutual organization. we don't have investors. we actually are owned by our customers. therefore, our dividends get paid in the rate to them. if you compare our rates compared to the street, it is a comp competitor. you are always having to stay on our toes. you referenced one product there. we have another product that starts with a five. across the range, we like to be up in the pricing to make sure our members are getting value. however, with rate cuts, that's the other side of the equation with bank of england cutting rates, it does mean reward for sa savers is likely to reduce over the medium term. >> just to clarify, are these latest rates are you offering reflects the bank of england or will they fall in the coming days? if i may, because we don't have

too much time left, i would like you to give a little more color over what is happening in the rental market. >> yeah, sure. briefly on the first point, two products. a fixed product which is linked to future interest rates and they have been coming down gradually over the last couple months. therefore, yes, it is priced in. with regard to variable products, it will adjust as the bank adjusts the rate over the coming months. impact on both. with regard to the rental market in the uk, surprisingly resilient. we have seen rental properties going up 10%. we are seeing little arrears. people are able to keep up with the payments despite them having gone up the last couple years. resilient, but we are seeing less people taking out debt. in other words, landlords buying properties with debt. there will be pressure in the medium term if we don't build more houses.

>> right. i appreciate your time this morning. i hope we can speak again in the near future. stuart, thank you. i want to take you to some live pictures at this stage of the we are seeing arrivals from american prisoners arising in texas as we speak. the footage is a little bit unstable for the time being, but this is in the context of what's been described as the biggest swap between the u.s. and russia. we'll continue to monitor those live pictures and try to bring you further details as we continue to monitor this story. it is a very important one. we, of course, saw the news from the "wall street journal" in respect to evan gershkovich, the american journalist that had been in russia sentenced recently as well. of course, he's been one of the

names mentioned in this latest swap between american prisoners and russia as well. as i said, we'll continue to monitor this and bring you the latest. coming up on the show, we'll take a look at british airways owner iag as it out performs on earnings while walking away from a key deal. we'll get the latest live from the field after this break. 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. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life insurance is a valuable asset that can be sold. we learned we could sell all of our policy, or

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welcome to "street signs." i'm silvia amaro and here are your headlines. disappointing squeeze and weaker than expected u.s. factory data. u.s. braces for another day of pain with nasdaq futures more than 1% lower ahead of today's non-farm payrolls data. amazon sinks on the back of its first revenue miss in nearly two years while apple overcoming a lag in china to post a 5% sales boost. british airways owner iag

tops second quarter expectations and walks away from the supposed t takeover. the ceo explains the decision to cnbc. >> we decided to leave because, first of all, we have the issue with the shareholders and to do something beyond that doesn't make sense. we are on sell-off mode at this stage in the equity session this friday. let me just guide you through some of the moves across the main bourses in europe. we see pronounced moves to the down side in switzerland and also in italy as well as in germany with the dax down by 1%. just to give you an idea of some of the moves we are seeing this morning, the overall benchmark here in europe, the stoxx 600 has fallen to its lowest level since januariy earlier today. we continue to track these moves

in europe as investors are questioning what is going to happen from the federal reserve perspective. recently, investors have had growing concerns of the state of the u.s. economy whether the fed should have cut rates earlier this week as well and those concerns are fueling across global markets. you can see that is also the picture here in europe. i want to take you to fx as well because it has been an eventful week with monetary policy decisions. we had the bank of japan and federal reserve meeting and the bank of england. i want to see how we are faring in terms of some of the moves. looking at sterling-dollar. sterling is trading lower at 1.27. we did see the british pound continuing to fall after that decision from the bank of england to cut rates. more broadly, what we are seeing this morning is also investors looking for safe assets amid these concerns about the outlook for the u.s. economy and what

that could mean as well for the global economy. with that in mind, let me show you how asian bourses have traded today. with the nikkei 225, the worst performer out of asia, it ended down almost 6%. when it comes to the asian equity moves, they were on track for the worst day in over two years as well. this, of course, as we saw u.s. treasury yields falling off the back of the concerns that i highlighted to you earlier in the show. i also want to show you how u.s. futures are shaping up at this stage as we approach the session stateside as well. as you can see on your screen, we are looking to a negative start to the trading session over there as well. this after major indices dropped on thursday as well with the russell 2k posting its worst day since february of february 2022. as you think of the other major indices, s&p ended down 1.3%.

the dow also down by 1.2%. let's see what's going to happen stateside later today. of course, we will see a new reading of non-farm payrolls. the question at this stage is will that continue to fuel these concerns around the u.s. economy and what the federal reserve should have done already. we will wait for that data to understand what will happen stateside as well as how that relates into the action here in europe. i want to take you to a stock we are monitoringin europe this morning. aig has walked away from the proposed takeover of the spanish carrier air europa over the reports that the european commission was set to block the deal. we have shares moving higher this morning by 5.5% as well. separately, though, the british airways owner topped second quarter earnings expectations with the operating profit of

1.24 billion euro. the result comes despite tough market conditions with recent reports from lufthansa and ryanair weighing on stocks in the aviation sector. we have arabile here to cover this story. arabile, walk us through what iag said this morning and if investors are showing positivity toward this stock. what should investors make from the announcement from iag this morning? >> reporter: good morning, silvia. look, when you compare to some of the other airlines that we've been speaking to, we have been speaking to wiz az air the othe day. one note for sure is there is a stark difference with the performance of the flag carrier, iag with british airways and

iberian fading within that portfolio amongst others. what is interesting is the transformation program seems to be putting out sufficient growth for the company to maintain the strong economic picture for now at least. one thing is they expect demand to improve. let's remember that figure of 1.24 billion actually is a slight drawdown from the 1.25 billion that we have previously seen. the interesting part to that is it still beat out estimates from the market. you saw even the margin, the operating margin of one-time expenses drop from 16.3%. that is within the medium term of the objectives of the company with 12% and 15%. that gives you the sense that the transformation process of 7,000 employees in the period is actually making a lot of sense for the business. the one area, of course, of concern, is whether they will be able to get the air europa deal

cr across the line to expand in the region because that is where you will get the growth outside of latin america for them which is a significant growth part. they stepped away from the air europa deal and they are looking for a few more deals and this is the key reason the ceo said they stepped away. >> we stepped away during covid because it was impossible to see the future. we have been working with european commission and we prepared a generous package. we also put in place several deals. we were ready to give 52% that air europa was operating in 2023. we decided to leave because first of all, we have our

concern to the shareholders and to give something beyond that doesn't make sense. >> reporter: the ceo saying, of course, they are still looking for more deals. they are hoping to get a deal across the line and they will look at other areas in how to grow and expand the business, but that will fully depend on what sits on the table. they have put out an interim dividend to their investors as well. 3 euro cents per share. they are trying to continue the transformation. they hopare hoping to bring the cancellations down substantially. a tough task, but the one the ceo is up to. a strong set of results, silvia. >> when it comes to cancellations and delays, that is always bad news for passengers trying to get to disthd disd destinations. thank you for the announcement.

and axa is in talks with bnp paribas for a deal of 5.4 billion euro. it posted earnings of 4.2 billion euro in the period which is up 4% on the year. charlotte has been monitoring the latest announcements from the companies. at this stage, when you think about the share price reaction, axa moving higher and bnp moving lower. we know the overall market is in sell-off. walk us through the benefits of bnp. >> it completed the selloff last year for $3 billion. there was share buyback. we have an answer with this negotiations with actioxa. 1.5 trillion euro of assets

under management according to moody. it has been lacking momentum. it makes sense for them to go in that area. a lot of the alternative assets that axa had within the particular area for bnp. that is the latest consolidation with the scale in particular. they want to be a player in this as well. for axa, according to jeffries, axa lacked the scale in asset management to compete with industry leaders. it allows them to refocus in the core business and focus on insurance. it is interesting as this announcement came as axa stated it was buying a french group for 423 million euro. refocusing on the core business. it makes sense for both players here. axa and bnp to strengthen what they are good at and where they need to expand.

we see positive reaction into axa. the transaction is expected to close mid 2025 amid regulatory approval. certainly, the impact on it is 25 basis points for bnp. a small financial impact which is where they need to increase. that is working for bnp. >> i wonder if this is the first chapter of more meaningful m &a. thank you for the report. all eyes on the nfp number. coming up after the break, we will look at the latest payroll report. we'll discuss what to expect after this break.

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with the best in home wifi. easily transfer your services in the xfinity app. bring on the good stuff. welcome back to "street signs." as i told you ahead of the break, attention today is turning to the all-important non-farm payroll report with the u.s. forecast to add 185,000

jobs in the month of july. down from the 206,000 we had seen in june. unemployment is expected to hold at 4.1% with the average hourly earnings rising 0.3% on the month. the managing director and head of portfolio strategy at new hedge wealth is joining us for more. good morning, brian. thanks for being with us. first, i would like to understand as we track the selloff in equities, are you expecting the non-farm payroll figure to add to the concerns raised by investors yesterday? >> this is certainly the most important non-farm payroll report we have seen. we are used to having the important cpi reports everybody is hinging on, but the growth and non inflation is in focus. i think anything below 125,000 on payrolls or a rise in unemployment rate to 4.2% or 4.3% would exacerbate a lot of

the concerns we saw in yesterday's market where bonds were rallying on hopes for rate cuts, but genuinely growth revisions and stocks were falling in sympathy with that. we hcome in consensus, that woud be fine and the fed would be continue to hold and confidence to cut in september. if we get a negative reading today, thecalls for 50 basis points in september would be getting louder. >> i like to understand which camp you are in because i have seen the latest manufacturing data and actually some saying the fed should cut this week. do you agree with that opinion? >> yes, the fed could have cut this week and probably, in retrospect, should have cut this week based on the data we saw yesterday. there is not much in the inflation data we are seeing or leading indicators.

the propductivity numbers were good. the reason to be worried about this month's payroll report, the one we get this morning, is we see continuing jobless claims and climbing. that is coming the jolts hiring rate fall. this is not necessarily people losing their jobs, but more people file for unemployment insurance and stay on unemployment because it is harder to find a job. if hires are getting weaker, we are expecting payrolls to be going down. we are not expecting things to come apart at the seams. in the u.s. laubbor market, we e seeing slowing. that's not going to ring as many alarm bells. if we see a huge surprise today, that will validate a lot of concerns people have with the fed being behind the curve. >> i did see your comments of the rotation into cyclicals and small caps is likely to continue, but you think the

window is narrowing. talk us through the timeline you see here and ultimately why and why is this likely to end in the near future? >> we always thought the upgrade we made to stocks is short lived. we upgraded from neutral. the last time you find a soft landing and we think that is a reasonably likely case in this outlook we have here. small caps rallied after the fed started cutting rates, but not for very long. they gave back a lot of the gains when it was clear the fed would not cut that many times. the economy was weak. you can get the short cyclical values in performance, but it will not last a long timie. if rates are falling, that is not a good environment for cyclicals and small caps. that is always the risk. that is what we saw manifest yesterday. we are neutral on small caps and

not in the position of overweight and in a position to downgrade them. there is high yield bonds where we don't want to add too much risk to portfolios where we don't know the growth outlook is with the second half going into next year. >> i would like to discuss that in more detail. given the data we have available at this moment and i appreciate the importance of nfp later on today, but we also have the expectation the fed is going to cut rates in september. the debate is 25 or 50 basis points. what assets are looking attractive to you for the rest of the year? >> so, it's 50-basis point cut in september would signal the fed should have cut in july. the fed doesn't want to start with big rate cuts and move every single meeting. that is what is priced in. if you look through the end of next year, there are about as many rate cuts priced in through

the end of 2025 as there was back in january with a very aggressive path priced in for this year and next year. assuming we get the rate cuts, again, they're already priced in, that is consistent with historical rate cuts you see during a recession. you have to think in your portfolio not just playing into what will do well if rates fall, but what will do well if rates fall because we're going into a softer growth environment. you think earnings expectations because valuations are too high? you can extend duration. you can move to higher stock quality. those are always defensive in the pfortfolio. >> thank you for taking time to speak with us. the managing director and head of portfolio strategy at new edge wealth. as we end the show, you take a look at the european markets.

we are in selloff at this stage. i mentioned how we are seeing tech sector down so far into the session. i would like to mention to you some of the numbers that we're looking at here in terms of the overall tech sector index for the stoxx 600. it has fallen to its lowest level since january and, of course, we track the mood among vo investors. technology is out performer at this stage. utilities, on the other hand, the only sector at this stage trading above the flat line. of course, u.s. futures are shaping up to a weak start to the trading session on wall street. let's see how that will shape up. that is it for today's show. i'm silvia amaro and "worldwide exchange" is coming up nex t. itch to shopif 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

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equity markets around the world are in selloff mode after wall street closes sharply lower on thursday on fresh recession fears and speculation the fed may be behind the curve in cutting interest rates. now among them, asia closing sharply lower. japan capping off the worst single day drop since 2016 as chip stocks get hammered. europe opens deep in the red. here in the u.s., intel shares are crushed tracking