that's all for this edition of "dateline." i'm natalie morales. thank you for watching. [theme music] good morning welcome to "street signs." i'm joumanna bercetche these are your headlines happenle shares sink in frankfurt after the tech titan shocks the market with a warning on its quarterly revenue saying the virus outbreak has disrupted sales and weighs on demand >> the demand of global markets sending suppliers deep into the red as ceo tim cook fails to

provide new for the quarter. hsbc says 35,000 jobs will go after full profit misses expectations falling 33% italy sampalo getting rolling. sending shares in the smaller rival up over 20%. the european competition commissioner tells cnbc she had constructive talks with mark zuckerberg >> there is a change in tone a lot realize there is change needed not in detail. i think that is left for us.

good morning, everyone our number one top story today is about apple apple shares are sinking in frankfurt after the tech titan made a shart warning it does not expect to meet quarterly expectations the supply of iphones will be temporarily limited worldwide. apple forecasted record revenues it has failed to provide a new revenue forecast, however. shares in apple suppliers are sharply lower off the back of the downgraded guidance. you can see down almost 5% on the news big ripple effects were seen here you can see the broader complex down 3% to 5% this morning

huge knock off effects having an impact let's get to arjun this morning. they are one of the major companies, the first in the world to come out and say, look, coronavirus is actually going to hit our bottom line but they haven't given us a number or given us further guidance as to how much impact they'll take from here. >> that speaks to the fact that we don't really know how this coronavirus is going to play out or last. an analyst firm came out with numbers and are expecting the march quarter to bring in $58 to $60 billion. that would be flat year on year, if that were true. it is worth for a moment laying out the exposure to china. 15% of revenues. it is a huge market.

on top of that most of the iphones are produced out of china as well. apple has around 650,000 workers not directly employed by apple but with those factories they are just getting back in. it will take a long time to get back up to production. >> we can see in germany, they are down almost 5% you said 15% of their sales comes from china that's just 15%. i get the supply impact but what about the actual semiconductors themselves and the reliance on the supply chain than apple? it really doesn't look good at all for the sector at whole? >> given the amount of focus and the fact that if suppliers aren't able to produce

components, apple, am sung, gaming companies as well it will be the suppliers that are hit but also the entire supply chain still very much the reliance on china. >> the word exposed is the word here let's bring in the head of multiasset funds to pick up on what arjun was saying. clearly, this is a major catalyst also, a point of realization for investors out there saying, look, this coronavirus isn't just going to disappear without an impact on major companies we are talking about here, apple and other big names. as an investor, when you see the like of apple come out with this, does it make you more cautious

>> the announcement itself was just a matter of time before large connected companies to start with the detail has already been visible when you look to activity levels and what some of those were saying about their ability to get back to work the announcement themself, not so much a surprise when we look back to the productivity when companies have gone back to work, it varies by industry. when you look at heavy industry, commodity based steel come back on line quickly. when you look further downstream and at autos, perhaps, we are not really running at the rates we have seen before. that is going to have a knock on impact we are starting to get more details. this will be the last of the more detailed announcements for

the companies. >> that will answer the question whether this is a q 1, q 2 story. it looks like the impact also could be a function of whether it gets contained or not certainly, it is appearing as though they could have a long-lasting impact than we had anticipated. i think we would be too optimistic to say we'd have this wrapped up having said that, it brings you back to the question you pointed out, which is where exactly do we go in terms of containment also for us to see new clusters and potentially some outside of

china. then the real question for economic activity is going to be what kind of restrictions are put in place what they've seen now are not quite as severe conditions the question is whether we see those extended and what do we see in other countries >> what does it mean for where you want to put your money tech has been a big driver of performance. the biggest performing segment was tech in 2019 with these stories coming to light, even though at the end of the day, they are the highest growing company right now? >> they are. even for the number of years now, tech is the poster child of that as you have seen in the safe haven as you pick apart the story, you can get a sense of why

at this stage, if we think about this as some kind of a v shape recovery that is held back and then returned. the company you really worry about are the ones struggling to generate cash. that's not really where you put most of technology at the moment that is the valuations compared to where we were does mean people will need to revise you can expect that you will be there to benefit what you imagine is the pent up demand. >> arjun, i wanted to bring it back to you. >> i wanted to talk to you by ali baba they are getting hit and some of the ramifications there. do you get the sense analysts are getting nervous about the chinese tech out look here as well >> i don't think the long term

bullish look has changed you look at the likes of tencent, alibaba, you look at others, perhaps not the strangest but still got a lot of interesting parts of the business still growing alibaba and tencent may have short-term impact but not long term it is hard to see the challenge for them in the next two to three years. >> we'll see the impact of this. thank you for joining us today and joining us for the next hour, the head of multiasset funds. on to the coronavirus, chinese authorities believe the prevention measures are

beginning to take effect they say the number of new infections fell below 2,000 for the first time since january it is too early to make sure it is contained the death toll is 1,868. total confirmed infections are above 72,000 14 americans evacuated from a quarantine cruiseship have tested positive and have been flown him. they were moved to a specialized containment area and will remain under quarantine another 14 days in china, government companies are getting back to work 95% of government operations are up and running as of this week more than 80% of the 20,000 state-owned firms subsidiaries

have also resumed operations as well that is the latest from china. also coming up on "street signs," executives are expressing a chain of tone around regulation. we'll have more from the exclusive interview in just a few moments. my gums are irritated. i don't have to worry about that, do i? harmful bacteria lurk just below the gum line. crest gum detoxify, voted product of the year. it works below the gum line to neutralize harmful plaque bacteria and help reverse early gum damage. gum detoxify, from crest.

welcome back to "street signs. let's take a look at the european markets with a hand overahandover of asian markets ftse 100 down about half a percentage point cra cac is down about 0.3% sent dax also down about 1%. a heavy trading day for industrial names in auto ftse mib is positive because of the positive news out of the

italian banking sector there we'll talk more about that in terms of individual sectors right at the top, we have defenses, utilities and real estate 0.2% point we have results out of bhp and glencore another thing playing out there. auto is down 1.5%. tech is the number one story today. the apple warning about their revenue guidance and that they are going to miss it on the back of the coronavirus impact. that is the picture out of europe a lot of red on the screen hsbc has unveiled sweeping overhaul plans after reporting 33% fall profit earnings

estimate the bank will boost returns by cutting some $100 billion in assets anticipating 35,000 job cuts over the next three years. also warning the coronavirus could lead to revenue and credit losses this quarter. a real sharp reaction seen this morning. talk us through some of the major announcements. we have more detail of what they are thinking and planning for the next couple of years >> that's right. we did get a report card and strategy update. it is going to be the biggest overhaul in the number of years. that has the market shocked. not only do you have this update but the interim ceo announcing the plans has not been confirmed

with the permanent group ce. still in the works, the bank will be announcing it in due time which says between 6 months to 12 months to the reporter coast guard and full year down 33% to $13.3 billion compared to $19.9 billion earned in the previous year. that was due to a good will impairment the company says positive adjusted jobs at 3.1% affecting return on average tangible equity earnings per share at 30 u.s. cents. hsbc shares in hong kong down near a low we are looking at a number of things the bank will not have any share buybacks for the next two years.

suspending that due to the high level of restructuring and intend to return to neutralizing de dividends in 2022. replacing that and bolstering that in the middle east. millions of charges and exiting existing units and 4.5 billion in cost cuts this will include the 35,000 job cuts over the next three years we will get overy'all strategy expecting there to be some challenges and the uk with social unrest as well as the coronavirus being some risk to the market as well as u.s. and asian economies. that is a look at hsbc we'll be

watching when it joins uk trade in just a little bit >> we have been watching that stock closely. one of the major movers on the ftse 100 another bank we are looking at, launching a surprise 4.86 billion takeover bid. adding that it launched the offer to improve ability to compete with europe. the seventh largest bank by assets in a bid to address competition concerns that has given a positive boost this morning one of the few spots of green we are seeing on the european heat map. getting out to the head of multiasset funds hsbc is just a reflection of

what is going on it is a restructuring, cost cutting. the just seem to be doing it a few years later than everyone else >> that reflects the challenge for each bank is a little different. what the market has been asking them to do is very similar it has different imindicatioplis for them when they think about withdrawing from those forces. for a more complex diversified bank when you put that in to the balance has not been that much concern there are real dangers hidden in the asset values and the ability to earn. and the process of getting to a

level which the companies can genuinely achieve but which meet market expectations withdrawn out prices >> we say that but there has been 20% to 30% balance. we could argue it got to 4relevs that started to be an a sem et rick trade is there enough ammunition to keep european banks going forward? >> in a sense, we've been talking about that for many years. it was less about the valuation attached and more about the convergence. we are starting to see a willingness for the street to

deliver 10% return and also to say where we are willing to accept that because your cost of equity is sufficiently closed to that in that sense, it is that price estimate that allows people to look at the sector and see the value there. we'll see progress in valuation that will leave people feeling that >> small signs of that happening today. head of multiasset funds the eu commission has told cnbc there is a chance of tone from ceos of the world big tech companies. what word did she have to say? very interesting to hear the comments surrounding the meeting with mark zuckerberg and the commission yesterday >> if we look at her comments

regarding facebook and the meeting she had yesterday, she did say that their conversation was good she was interested in this white paper facebook published with new ideas of how to regulate tech giants. she did note the change in tone from companies particularly, when it comes to regulation, she welcomes this change in tone that, quote, when you open the door, it is difficult to close it again. we heard about 5g. not long ago regarding the u.s. government considering purchasing stakes in ericcson and nokia and this is what we have to say about the potential u.s. involvement take a listen. >> the important thing is for us to make sure every risk is

assessed there is a 5g value chain of deployment of hardware and updates. if we find risks of our security, breach of confidentiality, that these are mitigated and taken care of. we share the fact that you want to have a safe 5g network. >> let's look at the u.s. government and u.s. firms afire nokia and ericcson this could be good to have 5g earlier than expected. if we were to have a u.s. government stake would be riskier than the private equity jumping in >> here in europe, we are

private ownership. you have a real business case for what you do. so, you know, i have no specific point sf the u.s. take would want to buy a stake? >> very good let's look at the competitive side of huawei and the 5g market they allegedly received some financial incentives from the financial government the u.s. is giving incentives from western companies to also have 5g projects would you say the competitiveness would be at risk if the union would not supply similar incentives >> we have something called a matching clause. if a competitor of europe is

getting subsidies outside of europe, there is a possibility to match that. we are even more interested in trying to minimize and have fair subsidies being involved and picking up bills in companies that ought to compete. what we are looking at is how to ensure foreign substances and how to come into europe and leveling the playing field that being said, we will see areas in europe where there is market failure you would have a state subsidy coming in. make sure businesses in those areas. citizens would also be well-served. that is sort of the kind of digital society that we want also in areas there is no business case for deploying the

network, that you would see that happen for the entire union to be habitated >> in our conversation ahead of competition policy, you have a very interesting time when the commission is about to release new rules on ai. this will happen tomorrow and start a 12-week consultation period we should expect further news on regulation towards big tech giants in the coming months. >> certainly as we have seen that europe is leading the way on that regulation stay with us also coming up, we'll cross out to frankfurt as the deutsche board ceo sat down with an exclusive interview immediately after holding a prescoerces nfen on his company's earnings. we'll be right back.

welcome back to "street signs. these are your headlines

apple shares tank. saying the virus outbreak has disrupted iphone sales the warning dragging supple up plie -- suppliers in europe and asia into the red hsbc said 35,000 jobs will go after full-year profit misses expectations falling 33% italy's sampaolo sending shares up over 20% a talk with mark zuckerberg saying there needs to be a

change of mindset with big tech. >> there is a change in tone the regulation, i think that is left for us. good morning the big news overnight was the apple warning saying they will not likely meet revenue guidance on back of the effects sending tr sending tremors this morning a lot of red as you can see behind me. a lot of red on the screen ftse 100 down about half a percentage point basic resources. hsbc stock is at the bottom of the ftse 100 down north of 4% announcing a major overhaul.

cac is down as well. we are seeing weakness in auto as well. dragging on some of the major european automakers. a weakness in industrial names as well. you might notice there is one spot in green. we are seeing a big performance of italian banking stocks. the larger bank, sanpaolo made a bid for the larger banks the major bid is that of the tech sector as a whole switching to the basic resources and mining space, i want to take you to the results of glencore they are posted a net full-year loss of $404 million marking the company's first annual loss in four years

this loss was after posting a profit of $3.4 million a year earlier and comes after impairment charges in africa and south america. trading close to the bottom of the ftse 100 bhp has reported a miss on half-year profit and warned that the coronavirus will make the full-year outlook uncertain. they posted a profit for six months boosted by an uptick in chinese demand to be down 2%. the ceo said the outbreak creates a challenge that will be muted through the quarter. >> the coronavirus will present some uncertainty what i was trying to say today is that at this point in time for all of our products, we have

seen demand. of course, we need to go back and revisit. that has allowed us combined with the solid performance to deliver 46% up tick and second biggest dividend for bhp >> let's bring in our guests speaking about the bhp results it seems that they are returning out of the region. specifically the return for ion

ore. >> sure. the iron ore story has been one of demand but also on the supply side we saw the big disruptions and maybe some supply side disruption as well as a result of things in australia whenever we are thinking about commodities, it is always supply and demand yes, it is softening and talking about the impact as well in terms of the price impact there. that could be supported as we saw in 2019. >> right, one thing i want to bring up, he's also saying they are looking ahead to the future and they are investing more in

sustainable metals if you look at bhp earnings. coal and iron alone count for the biggest group. how sustainable is that? >> it is an interesting balance. i think they are not so focused on nickel or copper. i think that's the change all of these companies have they want to keep on today but in the long run, whether they need to chart that holds

for the business that is a good place to be in terms of the structure of all. >> depends on how long the coronavirus lasts but maybe that would be a catalyst. looking at kmcommodity prices iron ore prices are down two-thirds for the year. do you think they have fully accounted for amount of downturn >> it is a big guess we take a view on the reasonable cases. iron ore is around the dollar s

assumption in terms of the impact, we published on coronavirus if we have a global containment by the end of the first quarter, then potentially it is a hit on the current year, they could rebound next year. it is an old story of what is happening quarter by quarter >> you are a rating agency another thing i've been looking at is the rating and lick kwidikwi -- liquidity. the demand isn't there for financing. if this continues, would you expect there to be a domino effect in terms of liquidity

shortage on back of the rating downgrade? >> that's the down side whereas you say, the problem that is severe in q1, isn't on the way back to repair in q2 whether the virus spreads, as you say. the chinese authorities have shown themselves in the past 10 years to take pretty dramatic steps when needed. when it is a question of pumping liquidity. given the steps they would take in previous years, you would expect they'd have some leavers to pull. they can't keep writing checks

forever. we know the debt in china is at a high level >> thank you to you, simon, lead analyst. deutsche has reported a 52% jump in net profit but results missed forecast as lore volatility weighed under the trading revenues joining us live from frankfurt with an interview. if you look at the results, some was lower than expected but positive discussing the results and what we could expect for 2020 you are the ceo of the company thank you for joining us let us look at last year

you had a record year when it comes to revenue how did this start for the first couple of weeks. >> discussing the following for 2018, we had a two-record year tail wind and secular growth, which we manage powers of. we ended up 2018 with 17% increase last year, we made 10% an excellent year. we called it a satisfactory profit it is a great year the year 2020, for the first six weeks started very strongly january was very good.

february was almost as good. we were benefitting from the volatility around the coronavirus as well. >> of course, coronavirus is a topic for almost every industry. in a way, the volatility is good for you but has the coronavirus got a side effect for your business >> we have employees for asia, singapore and hong kong. we put our priority on the health of our employees there. of course, we ask them to work from home to avoid getting infected we take this coronavirus very seriously as a citizen, a global citizen. i'd rather have a little less growth than benefitting from the

growth from corona >> looking at the overall growth for 2020, you have met almost all of the targets of ceo but not the gap of closing between deutsche borse and london stock exchange how do you want to proceed . >> very good question. when i first started as ceo, the value and stock exchange lse made this very smart deal are refinitiv. we have to work hard now in order to reduce the gap which is on the rise to lse, which made a deal of $27 billion deal taking

over refinitiv we could not have afforded to do such a deal. also looking into the business even if you have had the financial capacity, we would have done the deal >> let's look at the capacity of deals you are looking at to give us an idea of what could be interesting for you >> currently, 28 billion euro is quite sizeable almost at record levels. it is very clear since i was in office, we have done deals two larger ones. it is very clear, we have fire power still of $2 billion euro

our cash flow position we are making every year, more than $1.5 billion cash flow and what is coming into our company we have $2 billion fire power. we have the possibility to use our quittiexisting equity on top >> which geography for you is it asia or the u.s. you are done an acquisition recently in the u.s. >> that's a good question. we look globally it turns out 60 to 80% are coming from the united states because they are ahead of us in terms of data, business an l

analytics. >> sending it back to you. up for more consolidation but not a big deal in europe we mentioned the bidding deal but will probably be a big year here in europe >> thank you european car sales fell in january. the european auto association said france posted the strongest decline. followed by spain, germany and italy. seeing the biggest drop in sales following bmw. more company news, alstom has agreed to acquire bombardier's rail unit including equity and debt.

the takeover will make it the second biggest train takeover. the french commissioner will speak about it later today thyssenkrupp will likely be the biggest ever private equity deal the news that the tieup was off the table sent the stock lower stay with us, also coming up on "street signs," u.s. futures turn sour as apple issues a warning. that and more when we come back. [ fast-paced drumming ]

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welcome back to the show apple shares after a sharp warning that does not expect to meet quarterly targets due to

the coronavirus. while production had resumed, the supply will be temporarily limited worldwide. they had forecast record revenues it has failed however, to provide a new revenue fraction shares of apple suppliers in europe and asia are sharply lower done the back of the guidance you can see asml down. ams down 5% as well. back in january, 2019, when apple initially made a warning about their iphone sales in china, we saw real knockon effects. some of those names dropping 10 to 15% let's take a look at u.s. futures. coming back from a holiday you can see the picture is not so pretty across the board

s&p and the nasdaq all seen opening in the red let's get back out to the head of asset funds we were talking about where you want to put your money you said you were constructive on industries. but with tech playing such a big roll, you want to be more caution in terms of where we go from here. the disruptions have tended to be v shapeds even if this one was deeper and could last longer

seasonally positioned for that and able to weather the storm. >> constructive on equities. you told me one other place you you had been working out had been short how much further do you think it can go >> always difficult to put a level on it. for a long time, it stayed in a tight range. looking to how that would take you into the target. valuation is probably not the key but more a question of whether do we see the growth

start to normalize so the u.s. starts extending its lead and becomes more a function of time than price and comes over the second half of the year when we might see more stability >> for the time being, we are gripped by what is happening with the coronavirus thank you for joining me today on "street signs." head of asset funds. one last look at futures, it is going to be a day of risk off for the three major forces on top of a record week last week that is it for "street signs." i'm joumanna bercetche "worldwide exchange" is coming up now [ fast-paced drumming ]

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it is 5:00 at cnbc here is your "five@5." wall street gets back to work this morning as stocks face renewed pressure part of that pressure coming from apple as the tech giant issues a revenue warning over the coronavirus. hsbc announcing it is/i slashin tens of thousands of jobs. walmart in