italian banks jump after s&p approve the triple credit rating with a negative outlook. phillips shares rise as the condition expects mature markets to improve after missing first

quarter profits. >> we are sitting on a tremendous order book. last year the company reported double digit growth through the year in 2019 you'll see starting with the second quarter, certainly in the second half, a much stronger revenue development. bayer shares come under pressure after a majority of shares lodge a vote of no confidence in the german chemicals firm but the supervisory firm confirms support for the management well, good morning, everybody. welcome to this monday morning of trading the number one story that we've been following over the weekend is that of the spanish election.

obviously this is the ibec we're seeing a little bit of a reaction just to recap what happened there, the spanish prime minister does look set to retain power after the socialist party launched off a 50% gain in the country's election this is a picture of some of the stocks they're trading a little bit in the red. the picture is somewhat muted a little bit to the down side. i want to take a little bit of a look at the spanish yield. minimum reaction there trading we have the 10 year spanish bond trading at 1% trading slightly around the session hanging around minus 28 points

not enough of a reaction enough of a reaction to say at least for the bond market this is a slightly positive outcome from the standard elections but with almost all of the votes counted the socialists are not close enough sunday's poll saw national seats for the first time sanchez told reporters he will aim to have the same constitution. >> the only condition we're going to put is promoting social justice. let's get up to willem willem, i mean, i've got to ask you, you know, for psoe, this is a better than expected outcome for them they're still not commanding an absolute majority. what does this mean in terms of

formation and will they have to rely on some of the smaller parties again? >> reporter: that's a good question two months ago when sanchez pulled this snap election he was fat facing a bit of a problem and what he'll have to do is call on it to break the deadlock he was reliant on catalan separatists to get things through parliament it could be that he ends up in a similar situation. what he has managed to do is increase the number of seats his socialist party has in parliament a by around 50% one of the biggest lose injuries is the party behind me, popular.

they are in half very stinging. what happens next is i had a chance to talk to the trade minister and i asked her whether she thought the uncertainty would be over and whether there would be the stability that they hoped for. >> without a doubt, what businesses need is stability and the steady government that has the results with 120 seats in congress we can't keep going back to the polls in everytwo years. as i mentioned, this is a bretd of fresh air but also of course generating opportunities we will need time to analyze the results and work out what the

best government will be for the country. i think we definitely have the capacity with 120 seats to bring the best things needed spain does need stability. the sooner we have the government bond, the better we can spend and the sooner we can keep moving forward with the policies we have started working on over the last two monkts. these policies needed final to come into effect we have four years to prove that the socialist party is working towards the future and i believe this shouldn't be delayed too long. >> none of the spanish politicians i've talked to speaking candidly expect to see a new government form before the european parliamentary elections at the end of may. the dominant perspective is from catalonia. following from the october 2017 refr r-- referendum, that has

been deemed illegal. it's gone from zero seats to more than two dozen over the course of the last 24 hours. in terms of what it means performing a government, in terms of what it means for madrid and catalonia, i had a chance to talk to another socialist minister after the votes had been counted madario, she's the labor minister, i asked her if she thought this would change the way the catalans would be. here's the response. >> translator: i hope they take notice in catalonia that a majority of spaniards have backed the constitution and diversity and inclusion as long as it is done within the spanish constitution i hope and i wish that a door opens for hope, a door opens for dialogue in catalonia, a door opens which respects the spanish

constitution. >> reporter: to summarize, it doesn't sound like we'll have a huge clarity on what the new government will look like until later in may at that point we'll get a sense of whether the socialists have decided to work with the left wing party and some of the smaller regional parties or alternatively whether they will work with the citizen's party whose leader has been incredibly critical with the leader sanchez. it will be clearly something of great significance when it comes to the european parliamentary investors. >> thank you, willem you can find out more about the a challenges that lia head on cnbc.com and from spanish politics to spanish banking, bankia has a 10% drop in first quarter net

profit the spanish lender blamed lower trading income and continued pressure on lending income for the fall several european banks have struggled to raise their earnings while the ecb keeps their earnings at ultra low levels. italian banks are also trading higher after s&p global affirmed the country's sovereign credit rating at bbb this is two notches above junk we are seeing a bit of a positive reaction. italio up 2.2% also up 3% as well big, big news across the banking sector today also in spain as well as we're seeing some positive reaction to the general election results across the income. let's bring in castro.

satana, thank you for joining us there wasn't a lot of political premium priced in going into this event which is one of the reasons we aren't seeing a lot of of reaction in bonds and equities is this an important platform for you? >> i can't really see it that much spain is doing relatively well so i think it's more the gdp growth and we'll move on to italy. it doesn't have a current account deficit. i think this is more what markets are focusing on and the elections are probably more local. it's more of a local issue than a market issue. >> this is also somewhat telling going into the european market elections. we spent a lot of time analyzing it from brexit parties we forget this is a huge

election for the european continent. if you look at what the european election is telling us, huge victory for them you can say center left obviously did very well. far left didn't do that well how do you think this bodes well going into the european parliamentary standpoint >> from an investment stand point, i would look at it in if you ways first the political side, right? if the population is looking for change, i think there is something that is center the large party hasn't been able to listen to that. years ago most of the time had has been increased you can see that the main established party, more fringe,

right? that is one way. it seems as though we are moving on, which is splintered. there's two ways to consider one is as we see in italy, even if more parties are coming to power, what you can achieve and how much extremism they can show clearly other parties are saying, okay whereas, this is a party taken over by extremists it's how things develop and the dynami dynaminami dynamic. we are discussing all of these things and the markets are aware of it. >> let's dive into italy as jomana just mentioned. there are italian banks trading higher on the back of the s&p

500 trading. do you think the market is appropriately pricing the political and financial risks in italy at the moment? >> again, you know, i mean, from where we were a year ago, pretty much a year ago where everybody was very concerned about the new coalition government, i think it has gone a bit also the more extremist in terms of market outlook actually has lost power so it has toned down what they want to achieve in terms of not raising taxes but raising benefits, things like this in terms of anything that has to do with their market outlook, it is all -- you know, that would affect markets, i think it is less of an issue than what it was a year ago still things are very unstable and the growth is not there. that's the big difference. when you not just look at what

the parties want but also what the outcome is, i think that is really -- i think with the negative outlook that we need to watch, if growth is lingering and they can't get, you know, a little bit of more momentum into this, then i think we'll see a little bit of volatility again then if you ask me if this is priced in, at the moment, maybe a little bit they can definitely have stronger volatility than what we see at the moment. >> let's leave this here stay with us let's get out to jomana for a market update. >> julianna, yes there's a lot to digest in terms of political news. the italian sovereign rating in terms of the s&p, and the spanish elections. let's recap the price option we had on friday. let us not forget we had that u.s.d.p. print expectations.

that came as somewhat of a positive surprise on the markets on friday. up .3 of a percentage higher s&p up 1% from the all-time high very close to breaking through them a lot of that was on the inflation number that was the setoff. we are part of the golden week in japan japanese markets are closed. treasury secretary mnuchin said we are getting into the final stretch there. as we see the picture in europe, stoxx 600, that delighted some of the results we are seeing on individual indices let's get into some of the individual indices and break it down starting with the ftse 100, u.k.

up 15 points up .2 of a percentage point. in terms of the political environment, brexit discussions, lots of media reporting about the fact that the conservative party are set to lose a lot of assets at the counsel elections coming up. also we do have the banko meeting coming up on thursday. especially in light of the better than expected data. german dax up .4 of a percentage point. one thing you're watching out, we will get the gdp numbers this week we will be keeping an eye on those as well to see how the first quarter panned out there italian index, up .4 of a percentage point positive reaction to s&p global ratings keeping it for the sovereign. still a negative outlook they cite some concern about the

rising debts moving on to sectors, spent a lot of times talking about banks. going to point out that banks are at the top up .6 of a percentage point auto is cyclical having somewhat of a good day today in light of the better tone coming out of the trade continuing back. health care also in focus. that sector is up .4 of a percentage point despite some disappointing earnings out of health care phillips missing expectations on sales growth weaker. then right at the bottom in tirms of the sectors, we have u timgts down .5 and oil and gas giving back some of the gains. a lot more developments there because the u.s. president, president trump yes again tweeted he has spoken to opec about leaving. i've been 3u9ing it altogether we are setting up the week with

a better result. coming up on the show, u.s. growth logs its strongest start to the year since 2015, but is it enough to offset fears of a coming recession we'll discuss the latest data out of america after the break begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

welcome back to "street signs. i want to take you to two german stocks firstly bayer. down 1.8% so far that is after the supervisory board offered support to management after they issued a vote of no confidence shareholders voted not to ratify the decisions of management in 2018 amid anger of a takeover. bayer's share price has plunged relating to the weed killer roundup. you can see in march taking another step lower today they are trading net

dividends. drifting to covestro they cited, quote, higher skpettive pressure the german firm saw net income funds around 72% but the chemical company has confirmed fiscal guidance for 2019 they are trading about 0.39%. >> chemical expertise. moving on to health care, philips has missed first quarter profits on weak sale growth. they posted stronger numbers in china. philips has reiterated the sales forecast into 2020 despite the disappointing numbers, they say they are optimistic. >> we are sitting on a tremendous order book. we had order growth through the

year i was confident, like i say, in 2019 we will see starting with the second quarter, certainly in the second half, a much stronger revenue development and i say that because of that order book. >> okay. switching gears. let's talk about the u.s the u.s. economy has seen the strongest start of the year since 2015 it grew by 3.2%. it was helped by johnson exports and coupled with an extraction in exports. we also got fresh data out of china china's industrial profits have rebounded and rose 13.4% it's the biggest monthly gain since 2014 with a growth coming in production and sales. that's one of president trump's

top trade negotiatornegotiators. trade talks are taking place in beijing. eunice yoon find this. >> the trade talks are in the final laps they are preparing for their latest round of talks which take place tomorrow trade representative robert lightheiser and steve mnuchin are meeting next week. lee cook will head to washington for what both sides hope will result in a draft agreement. the talk is that the summit could take place in japan or president trump had said late last week that president xi could visit the white house. they pledged that china would open up further to foreign companies and foreign invest orgs he struck back at his critics suggesting there could be more

conflict ahead between the u.s. and china. eunice yoon, beijing. >> let's get back to our guest we just heard from our colleague eunice on the latest u.s./china trade talks. in terms of the market, if we get a market moving event, have they already priced in >> at the moment, the market has priced in most of the good news really because of a strong rally? at the same time it is nice to put it to bed. not sure if it gets put to rest completely the chinese continue to say, well, we are not quite happy with this situation or don't think this so it seems to be that there will be a resolution in the short term. it may linger on that may be the hero where we are saying the trade talks can

be done and president trump could raise those issues and make changes in a more confrontational way. >> i wanted to ask you about the gdp numbers on friday. it's showing the u.s. company is doing well enough but not enough for them to have to elude. >> yeah, no, i think there definitely was a big change to the end of last year all central banks turned so dovish that fueled the rally in the markets. so it -- and then the wording really is different right now that everybody is expecting even if inflation was to go a little bit higher the central banks would react to

this immediately so that seems that interest rates will stay where they are broadly but most has been taken into account where we are going is the answer >> the fourth quarter was obviously a repricing credit to the down side. there were lots of concerns about upping it. since then we've seen a massive snap back. there's been a huge tightening how much is predicated on the fact that the fed have actually turned dovish and the risk to your asset class is that the fed have turned less dovish? >> i think the fed helped a lot but at the same time at the end of last year it was part of valuations where we talked ourselves so much into the

recession. even before the fourth quarter all of 2018 credit was not a favorite for s&l credit will suffer first let's move out of credit into equities that was the story of all of 2018 that has changed the locators have come back into credit and one of the reasons i think is because of the central banks where the demand for income and the demand for euro is so high it's really the only place where we can find it that will likely happen. i think a lot has to happen for the fed support. >> we'll get a clue this week with fmoc meetings thank you so much for joining us coming up on the show, uber kicks off its ipo road show, but will the ride hailing company's

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welcome back to "street signs. spanish equities trade lower after pedro sanchez's socialist party wins the election. italian banks jump after s&p confirms the triple beat credit rating with a negative outlook. plilips shares rise after missing first quarter core profit estimates the ceo tells cnbc he is optimistic about 2019. >> we are sitting on a tremendous order book. last year in 2018 the company recorded double digit order growth through the year. in 2019 we will see starting with the second quarter a much

stronger revenue. and bayer shares come under pressure after a majority of shareholders lodge a vote of no confidence in the german chemicals firm they confirm the support for the management > . european markets are trading a touch higher this morning with all green across the board in terms of the different regions leading the way we have the italian index. ftse mib up 41 basis points. we flagged after the s&p rating decision on friday providing a nice boost there it is shaping up to be overall a positive picture with a slant towards the cyclical bank stocks and the more cyclical sectors are outperforming. let's take a look at the fx

markets. we'll have the fmoc taking place in the u.s. with another strong week for the dollar. last week the euro hitting the lowest level on friday since may 2017 so a lot of dollar strength there. this morning we are seeing the euro trade a little bit higher around 10 basis points the pound trading 19 basis points. let's take a look at u.s. futures. last week we saw wall street end on a positive note that was after the stronger than expected gdp prints and the s&p 500 and nasdaq rose to fresh record highs now we are looking at that positive momentum carry through into today's session with all three of the major indices looking to trade higher. as you mentioned, the fmoc on wednesday and the other numbers on thursday. elon musk and the sec have come to a tentative agreement sec has claimed musk violated the terms of the earlier

agreement. under the new deal musk must seek a lawyer's approval before sharing information about the automaker on twitter the ceo must also seek approval before sharing information on a blog and investor statements. sticking with the theme. uber has unveiled the terms of its ipo ahead of it becoming public in a few weeks. they are seeking a valuation between 80 and $90 billion investors are seeing the warning lights in the latest financials. >> we got an updated filing on friday with uber's latest financials looking like it will bepricing a little bit lower than it was expected for the huge market cap. it's between 44 and $50. it puts it up to $91.5 billion this is a massive ipo. not as big as what originally

will be expected there will be an offering of 180 million shares it will be worth about $9 billion. that puts it at the second biggest tech ipo in u.s. history, but there are still some big questions on the mind of investors you can see that uber had revenue of $3 billion just in the first fiscal quarter, but a lossof $1 billion so there is continued questions about whether the company can make money outside of ride hailing particularly in the uber eats segment. we've seen some of those questions raised with lyft's ipo. investors not sure they're buying into the long-term picture when it comes to profitability. >> thank you, guys for that update uber's ipo is set to bring in billions for the shareholders you can head to cnbc.com with

who expects to bhak from that listing. 150 s&p 500 companies are set to report. alphabet and apple are the last two faang stocks to release numbers. jomana and i are joined at the desk from alex degroot facebook, amazon, netflix, a couple more coming up, alphabet later today. what's your key take away as far as the season? >> outperformance. we're seeing very strong top line performance revenues coming in ahead it's all about the revenue i want to dive into apple.

they've been trying to shift investor focus away from iphone revenues from the service business they just launched recently their service business how effectively do you think they've been in convincing the market >> i think they've done a great job. they held a meeting a few weeks ago. it's switched the street's mind. so we now have a hiatus period where nothing really happens and the strength of investors begin to speculate how successful apple will be in the space because it's getting to be a competitive space. not only netflix and prime, but you guys and disney as well. so competitive space yes, for the time being they have convinced investors they are serious. >> me and julianna are sitting on "street signs" over here,

maybe one day. to reiterate your point, i was reading a stat from deutsch bank the big earnings are in the tech sector the beat is 7.4% it is showing up in the numbers as you say i want to go back to what julianna was sbag apple. do you get the sense that a lot of them are getting sirch different? moving into other areas, cloud we're seeing similar things with amazon as well their online businesses are actually the least growing businesses out of their portfolio. they're pushing for advertising services as well how much of a positive tail wind is that for the industry in terms of the big tech companies reinve-inventing themselves and they're setting the tone for

everyone else. the other thing it does for the business models is create more subscription revenue because we tend to subscribe to these products it's a great revenue stream for the companies to get into. so there is a shift underway cloud is massive advertising parameters is probably the next key. >> huge double digit growth. north of 30%, 40% for the quarter. >> sure. >> it feels as though many companies are venturing into the space. how high are "the herd"less to get into it? who has an advantage >> all of them are somehow throwing it out. >> there are huge barriers to entry. if you're into it, you should be very well. that's why google has an

advantage. once you're in it, the barriers to entry are difficult cap exand customer know how to succeed and customer know how to succeed is hard to know. a big barrier to entry. >> and for a while when investors wanted access to the high growth tech stocks, they were limited to the fang stocks. now with the flotation of pinterest, lyft, soon uber, they're sort of spoiled for choice how do you decide which of those is the best one to invest in should we see a pull back for the existing faang stocks? >> we have seen this before when snap lifted. that would be smaller cap investors looking at ultimately it didn't work out that way with pinterest, airbnb, investors need to be patient they need to invest 6 months ipo.

there are two winners there. >> alex, i want to bring you back to the macro. you can't really dissociate what happened since then it's dovish how much of an emphasis do you think is that in terms of outperformance of tech shares? >> it's a massive factor it talks about the bottom up the numbers are already here the interest rate is really important. if rates stop going up, policy tightens, that's the discount rate which affects your valuati valuation. right now we are in the sweet spot you see that in nasdaq 3.1 so i don't at the moment see what pulls that back. >> sweet spot of a sweet spot. i like it. alex, great. we'll end it on that note, sweet note with alex degroote.

in the sports world, while terry bottas beat luis hamilton to win thea azerbaijan grand p x prix also more than 40,000 people took part in london's marathon over the weekend as the event raised an unprecedented 1 billion pounds for charity >> wow. >> it was disappointing for british olympian i've got to say it's probably a little bit of a disappointment for the big ben runner guys who hit the wall and got stuck at the end, got stuck in time. >> nice pun as always. into the cinema space, avengers end game has smashed box office over the weekend raking in an estimated $1.2

billion. they earned roughly 350 million in the u.s. alone. china is a main driver of success. analysts suggest the success of the movie could set disney up for a bumper year in 2019. >> i tried but it was sold out. >> i feel like i should jump on the bandwagon. >> stay tuned. jomana and i can have a little review later in the week. you can follow us on twitter and get involved in the conversation there you can tweet us directly. also coming up on the show, president trump hits out at joe biden as the democratic candidate gets a fundraising boost.

welcome back to the program. it's a big day in japan on

tuesday. the country's 85-year-old emperor will step down to make way for his eldest stone to make his way to the throne. we report from tokyo >> reporter: the end of an imperial empire. they made the monarchy more personal for three decades he helped rebuild japan's ties with enemies. he visited disaster zones, neiled are refugees then shocked the nation announcing in 2016 he would step down because of age and health the emperor has no political power though whatever he says, however subtle, has influence. it's still rare to get a glimpse behind the palace walls where less than a century ago he was seen as a god.

now the monarchy has been modernized crown prince marihito is the first one to study abroad. >> his whole life he's been prepared to assume the role. >> less known is his wife's role the couple has talked candidly about her struggles with depression and the burden to produce a male heir. their daughter loses royal status if she marriemarries. all of it is fascinating for a 78-year-old super fan who has followed the royals for a quarter century. >> translator: i feel so invigorated, she says. his ascension could bring more changes. first two historic ceremonies and a visit from president trump, the first world leader

the world leader will meet nbc news, tokyo. meanwhile, the economic outlook for the middle eyes is crowded by high levels of uncertainty according to the imf. the organization warns that weaker external demands from key trading partners remains a key challenge for the region now in an interview with cnbc the imf middle east directors explained the results. >> they're set to out perform this year. a slowdown in growth, especially on trade the volatility in oil price. in addition to a certain number of country specific issues and in the whole we expect growth to slow down and for gcc countries to stabilize and for the non-gcc companies to slow down too.

>> fiscal concerns are arising as well. what worries you the most? >> well, it depends. where debt is very high, it's very important to tackle it and to reduce the level of deficit but then allow the companies to reduce the debt burden of the gdp. space is limited in their fiscal and they need to keep gradually reaching a level where the deficit will be low and where it will become less russia's central bank governor has told cnbc that the russian economy is growing at its full capacity. in an exclusive interview, she gave her response to criticism of the bank's rate policy is holding back growth. >> even now they're motivated in terms of our target, which is

4% our inflation expectations is about 9.4% higher than our target it's even higher than the first months we saw this record low of organization expectations but the problem is that they are not anchored well. that's why our fears were related to the vat increase, which is one factor, but we could have more pronounced secondary effect with inflation expectations that's why we think we keep our interest rate now but we ease our signal. >> the first picture is rather

troubled here. one would expect growth to be strong here given the potential with this economy but when you look at key household growth, investment or retail sales, it all seems rather muted i wonder are you concerned that the russian economy is failing to meet its potential? why is how hold income so poor. >> r. >> you know, russian economies recover after 2015, 2016 now the economy is growing in the full capacity. we estimate it's about 1.5%.

the problem is the potential growth rate. that's why the future ieconomic growth will start showing parts of national projects and investments in health care, education. they think of more private investments but it takes time to implement this we think that we implement them successfully, economic growth could be faster. meanwhile, attorney general william bar is scheduled to testify before the house committee later this week.

the democrats and justice department are at loggerheads in terms of the testimony let's get out to nbc's tracie potts who joins us more from washington very interesting to see the standoff taking place. is barr going to testify tracie >> reporter: senior democratic aide tells us, julianna, that he may be a no show because democrats are changing the rules. they want longer testimony they want lawyers in to ask him the questions and they want to go behind closed doors to ask about the information that was redacted, taken out of the public version of the mueller report here's barr, but he may not be seen here on capitol hill thursday for that hearing. if not, if he's a no show, the chair tells us that he will issue a subpoena and do everything possible to enforce it keep in mind there are two hearings happening this week, the day before on wednesday he's due before the senate judiciary committee and that's run by republicans. there doesn't seem to be an

issue there. we may see barr on wednesday and fail to see him on thursday when democrats are in charge. >> tracie, thank you for breaking it down for us. we'll be watching out for that wednesday, thursday this week. just before we head out, a quick look at u.s. futures to see how the picture is shaping up. we have a mildly positive start for the day. s&p 500 just a couple of points higher that would put it at an all-time new high we're just one point away from that that is it for our show though i am joanna versace. >> i am julianna tattle balm wor"worldwide exchange" is comig up next. what's a target date fund? what's a hedge fund? a mutual fund? an index fund? what should i ask my investment professional? how do i know if they're even legit? edgar? who's edgar? how do i read a 10-k?

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it's 5:00 a.m. at cnbc global headquarters and here is your five at 5 shattering records disney's "avengers" just did the unthinkable at the box office. the full details straight ahead. the earnings at center we'll break down the key names you're going to want to watch. another round of high level trade talks are about to kick off in beijing we'll take you there live. new developments this morning in the bidding war brewing in the permian basin and walmart threw some serious shade at amazon over one day delivery.