that's all for this edition of "dateline." i'm natalie morales. thank you for watching. [theme song] welcome to "street signs." i'm julianna tatelbaum these are your headlines european banks ride the state side rally after u.s. financial giants spike on jp morgan's view that his lender is very valuable at the current price >> raising 3 billion euros in capital. saying lenders will have to take

action >> now we are in the preparation but this is a big thing for the banks. you know the action we are in before now are becoming entireliness to take intoation for the reduced amount >> renault rallies on a plan to revamp with a plan with nissan and mi and. >> in hong kong, legislators debate a controversial national anthem bill. a warm welcome to "street signs" this morning.

european markets have been open about an hour now. we've seen stocks advance. going about 40 basis points higher we saw the risk on trade come higher in europe, we had travel and leisure going about 20%. a lot of reopening of the economies and airways with germany coming into focus to lift its warning for travel around europe in mid-june. a lot of hopes around the summer months and the reopening all eyes on the european commission we are looking to see whether they build on the french/german agreement around a eu recovery fund later today a lot of attention around the fiscal response. we've heard from the ecb and the question now, what the broader ecb response will look like. let's get a look at the regional

markets. italian markets underperforming. the cac 40 up about 1% the dax up the ftse 100 up 1.1% let's check at the european banks. very strong gains across the sector a socgen shares up paribas is up higher on the back of more support from the french government and tension to the auto sector a lot of optimism. the german rally up 4% they will come to the market for fresh capital. uk names rallying strongly this comes on the back of a very strong session for a u.s. bank i want to give you a look at what we saw in terms of u.s.

movers here. goldman up 9%. citigroup up jp morgan up 7%. we heard from jamie dimon, shares up after he called the bank very valuable at its current price. he famously bought shares in 2016 close to the bottom of the market at the time the bank boss said he was not trying to call the bottom but added that there was a very good chance of a recovery and cautioned that it was not yet time for share buy backs. >> caller: i think you've got to see the white of the eyes of the recover from you start buy backs. companies are all of a sudden retaining a lot of capital yes, i think you may see people start them but they probably won't be the size you have seen before >> that was jamie dimon speaking

yesterday. commerzbank is in focus this morning. the german lender seeking to raise 3 billion in cash as it manages the fallout from the virusout break issuing cocoa bonds with the date to be announced at a later stage. shares up up this morning 4% ecb vice president has said the fallout of the coronavirus has exacerbated issues in the financial issue. he warned lenders would see profitability fall and added that they were in a stronger position than a decade ago let's get to annette live in frankfurt. thank you for bringing this interesting interview. what stuck out to me is the banking sector valuation

he talked about not the price to book but the dispersion. what did you make of his comments more broadly? >> exactly the dispersion which is most worrying to the ecb. he said some banks do face especially low variation. that book value did fall in that crisis up to 0.1 to price book value which means a huge discount that is what will be which -- >> annette, i'm afraid we're having a technical issue when it comes to your audio. let me bring you the comments

there. >> thanks aren't in the same situation than they were 10 years ago in terms of liquidity. they are in much better position you have a problem prior that it was very low profitability this is going to have an impact on terms of producing further the profitability of the banks you have a clear valuation in the stock markets. you have seen an important drop and decline in valuations in the price to book that the average is the dispersion that there are some significant banks that are going up things we have not seen before this is perhaps for the banking sector, this is the main problem

we'll have to face for the profitability. i think that makes the necessary actions that were necessary before the crisis even before now. >> what are the necessary actions. >> cost capping and reduction in consolidation is going to be key. because for sure that now we are in a much better situation than we were 10 years ago but this is a big hit for the banks. in terms of profitability, the actions we were in before are becoming totally necessary >> do you think some banks might even be threatened like the loan losses might be life threatening to some banks because we don't know yet what is going to come for the banks. >> you know, banks are much more

resilient than before. there is something we cannot overlook this guarantee schemes on calculations on average these are fully absorbed by the banks and the full take up of these could transfer from the book of the banks to the government 30% of the banks are losses. there is an additional element in terms of helping the banks to address and confront the difficult situation that we are going through now. >> the ecb has warned of the dangers of soaring government debt the vice president also told us it could be much worse issuing in the financial stability

report he called on eu members to call on a strong fiscal response to stimulate the monetary stimulus. >> we have a very good initiative from the french and the german governments that has been very well received by markets and the reaction in terms of not only the spread quite clear and i hope that this will be the starting point on top of that, the commission will have to put forward its plans in order to continue the recovery of the area all in all, when you put together the monetary response and national authority's response in terms of fiscal policy plus, we'll expect to be a powerful pan-european response, that will be able to cope with the crisis we are

suffering now. >> let me bring you back to the financial risk from the elevated levels you are saying in your report of course debt levels will go very high especially in countries which seem to be in a critical state already like italy how much is there an increased risk that one country could crash out of the eurozone if they increase those levels >> prior to the coronavirus, there were countries with high debt levels but i think the important issue to take into consideration, we have to take into perspective the policy response, the fiscal policy is going to be, it is going to be crucial. in the short-term during the pandemic, during the crisis that we are suffering, that fiscal

policy is going to be tolerated. this fiscal policy is one of the main pillars of the response afterwards at the end of the pandemic, for sure, we'll have higher toll operation. it will be much worse in the crisis and in terms of the recovery phase so the only alternative is to have a fiscal response for sure. we'll have the higher calculation. this concern about public finance will have to be addressed but now, you know what we have to do is to have a powerful and strong fiscal response from both the national authorities and the pan european level. >> the elevated debt levels will

also mean we get a lower policy response longer for lower what is your idea behind -- >> fiscal policy is not going to determine, you know, the bias of our monetary policy at all monetary policy will be channelled to our objective of the price stability. we are taking into consideration the relevance and fiscal policy an important policy. i would not say at all that policy higher levels are going to determine our monetary policy at all >> let's bring geoff into the conversation it is interesting to hear there around fiscal policy not only on the national side but at the european level with the commission to present their proposal for the eu recovery fund

he said on the one hand that fiscal policy isn't going to affect the bias. as we've heard from madam lagarde, there clearly is a push to take more of a burden here. what was your take on the vice president's comments this morning? >> absolutely. it is something we've heard over and over again, haven't we since the gfc in 2008. it was mario draghi beating the drum andencouraging government to embrace governments and reforms and create more head room for exactly these kind of eventu eventualities to meet these crises we have this crisis many governments fixed their roofs.

we are in the die lema where the ecb is left holding the ring here to try and keep down borrowing costs for those peripheral members italy, as annette pointed out, is square and center as the forecast mentioned debt to gdp could get close to somewhere near 60% depending where they fund their spending programs here that means they'll probably end up with annual deficits in excess of 10% which is a long way off what the ecb or indeed the commission would hope for and raises increased pressure on how the european central bank continues to push down the italian neeld so t italian yield, so the btps and you get that widening out

between the bund and the btp and the markets get increasingly skeptical to suppress the market's natural desire to sell the risky piece of paper i thought his comments were fascinating. to me, it just exposes that challenge the ecb has hereof trying to keep the credit markets on side. >> what to me exposes the commission today's comments will be critical if we do see the build on that so far, it could lead to pressure and on sovereign debt levels if the european union shares on that level on the share markets and equity markets.

could it spur more on the undervalued market that have lagged the recovery so far >> pushing on, expecting the eurozone to shrink between 8% to 12%. she added that the likely prognosis of 5% will be scrapped in june. >> it is likely the data is out of date. i don't know we'll have better sense of that in a few days as we publish numbers in early june it is very likely we'll be somewhere between the med yium n severe scenario. that is in one given year going to shrink more than it has in the great financial crisis >> that was madam lagarde

speaking earlier this morning. demonstrations have broken out in hong kong amid heavy security as the council holds the second reading of the anthem bill which would criminalize disrespect of china's national anthem what more can you tell us about the protests that have got under way today? >> we saw a revive al of anti-government sentiment and protests today that's what we saw over the past weekend as well. relatively speaking smaller in scale. lunch time protests did lead to 240 or so arrests by the hong kong police today alone. we have to remember all the social distancing laws and rules banning a congregation of more than eight people is in tact

so we are talking about unauthorized assembly. that's really the action resaw today. what is driving this sentiment once again we are talking about two pieces of legislation one of them is the national anthem bill. today is the day that there is a legislative hearing call the the second reading of the bill happening today at the council as we speak in the building you see behind me. it is really about the idea of preserving the dignity of mainland china's national anthem here in hong kong. if it does go through, it is really about teaching students about the anthem and how to sing it and if you abuse it and about

the history. it does sound like china is trying to inject the patriotic pride into the people of hong kong that's the point that these activists are resisting. that's where the national security law piece comes into work or play here. this is something that china is trying to push forward the draft resolution will be started tomorrow we are talking about at this point, that doesn't have a lot of details and about the general idea of banning terrorism and subversion some of the examples about buying it here in terms of what we can expect is really about

discouraging the moderate camp not really going so robust with the politics to be seen. talking about the members of the media not being able to really request the official gdp numbers. those are some of the examples talking about. that's really the focal point here china's growing aggression into hong kong affairs. >> thank you for that coverage the angel we are closely watching is u.s. response. president trump has confirmed he will make an announcement by the end of the week. in a report washington will slap beijing over the move.

larry kudlow said the u.s. leader was so, quote, miffed with china that the u.s./china deal is now not so important to him. adding that it will take action against, quote, foreign interference the shanghai composite down there. coming up. renault revamp and forming a new allianceit wh nissan more after the break ♪

. welcome back i want to give you a i check on one of the best performing stocks this morning. travel and leisure moving high this was the best performing sector in europe advancing nearly 7% amid the reopening of tourism in the economy and optimism around being able to take those crucial summer

holidays the auto sector also in focus. french president emmanuel macron has unveiled a package to recover from the coronavirus the industry has been hit by weak demand due to production crack downs and including subsidies for buyers of electric cars france aims to become the top producer of clean auto producers. renault up more than 9%. particularly news this morning shares have risen under a new plan to reenergize its alliance with nissan and mitsubishi let's get to charlotte with more what can we expect on the alliance moving forward. >> the press came out a few minutes ago. the chair of the alliance insisting on the future of the alliance saying that it would be

one of the strongest in coming here's also talking about how to maximize the assets across the three brands and meaning that each brand would take the lead in some region where authorities were the best at close to 50% of models would come under that scheme that would be up to 40% where we would allow them $2 billion in savings. it would be interesting to this press conference they kept talking about the future of the alliance saying there had been some doubts in the market hoping that this plan presented puts an end to this. about a change of spirit in the alliance and how the three

brands would make it work. tensions had been new in nissan and some rumors that they would fall apart this pandemic would be the crisis needed to happen to come together as they needed in the auto sector on the back of the pandemic 2020 was already meant to be the make or break for the alliance the architect of the alliance in 2018 new management at nissan and renault. now 2020 with this new plan presented this morning to try to simplify and optimize. the things that have failed to leverage in the past interesting to know nissan would present the cost cutting plan tomorrow and renault would present its own plan on friday interesting to see what it means for production whether it be a

retooling of movement there. we'll hear from these two brands the market is happy from what they've heard from the plan in the next few years sending shares up about 8.5% at the top this morning >> thank you for breaking it down for us. we look forward to continuing coverage equity investors are perking up as they energize on europe warner music group plans to top the market with its listing. there's a bridge. between ideas and inspiration, trauma and treatment. gained a couple of more pounds. that's good for the babies. between the moments that make us who we are, and keeping them safe, private and secure, there's webex.

♪ ♪ beautiful.

welcome back to "street signs. i'm julianna tatelbaum these are your headlines european banks ride the state side after u.s. giants spike on jp morgan's view that his linder is very valuable at its current price. praising fresh capital

telling cnbc lenders will have to take action >> now we are in a much better situation than we were 10 years ago. the actions before now are becoming totalliness to take into consideration revamping the alliance with renault and mitsubishi and raising 8 billion to support the sector. >> twitter fact checks the commander and chief for the first time and hefires back. we take a look at the tweet at the center of the firestorm. let's get a check on european markets, how equities are holding up we have green across the board now.

at one point, the ftse mib was trading and the dax up 1%. ftse 100 up 1% and the key focal point this morning, the european commission with the presentation of the eu budget and recovery fund the question of how closely it will mirror those things put forward from last week it could be game changer a lot of attention on the fiscal response now taking a look at u.s. futures. we had a strong day on the rally. creating a close on the headlines and considering sanctions over beijing's recent actions surrounding hong kong. a jittery reaction more gains coming together opening nearly three points

higher dow and s&p also higher. >> trump has been accused of stifling free speech after fact-checking warning in e. to his tweets saying mail-in ballots would be nothing short. putting a blue skplamation point next to it adding that readers should check the information the tech giant says it will priorities health and safety providing face masks to employees and customers. most stores will only offer gene yus bar and pick up appointments but some will also allow walk-in customers. with 270 outlets in the u.s. all

closed in march. google plans to reopen some offices from july onwards but with strict safety measures. seeing about 10% of total occupancy, with plans to increase to 30% by september the google ceo says returning workers can expect the office to look and feel different than before silicon valley giants have encouraged employees to work from home suggesting it could become a more permanent arrangement. the u.s. stock market closed since the pandemic lockdown. new york governor was on hand. only a fraction of traders were on hand as social distancing measures have been applied to reduce the possibility of another outbreak telling cnbc despite the opening, trading will continue

to be affected by the outbreak i can't say this enough, reopening is not a return to normal if people are starting to reopen things, they still need to take the information we've learned to protect ourselves. otherwise all these sacrifices will be for not. we need to continue to be smart, safe and cautious. warner music group is back on track marking one of the first major debuts in the u.s. stock market since the outbreak the billionaire record label plans to float 14% of shares eyeing a valuation up to $13.3 billion. this would be $10 billion less for what he paid forewarner music in 2011 including stars such as lizo, bruno mars and he

had ed sherhan setting the valuation of the dutch company up 16 million euros. jde and pete's coffee merged to form a giant with more than 70 brands under its umbrella. we'll go to our guest. great to see you i want to kick off with this news of peet's coming to market. interesting amid the outbreak that we are seeing a little bit of movement here is there something specific about this company that makes right now an attractive time for this company to be coming to market

>> sure. i think it is almost a replay of some of the things we saw prior to the market closing as a result of covid. jd hits the target as being large and extremely high quality aside from the market here in europe >> what does the pipeline look like right now i imagine the companies revisiting their plans i think the base case to the markets over the last couple of months was that really the september window would be the first window for company to come to market and would be quite selected to

be impacted by the coronavirus and the large high-quality and could come to market in that window >> what is as successful as the markets are in the moment in the contempt of the platform if we continue to see this grind higher, one imagines companies will be emboldened to be op tunistic >> that's exactly right. we have the derisking phase and at the moment, we are siege signs of stabilization and the next phase we are looking forward to is the recovery phase. investors acted quickly to be there to come to the market quickly, raise equity through

block trades on a primary basis. those remained very well then reopening on the back end of that. >> what is your expectation on fees through the rest of the year then. do we see pressure increase just with the element being dictated from before. if we see that grind higher continue if we look at the policy response we've had the equity looks attractive as long as that plays out, you'll see the pockets available. you'll continue to see companies

come to the market using the link and bonds or equity through the right to raise new primary equity the longing investors have been interested in saying for the high-level companies they'll be there. secondly, we'll see as we move to the back end here, more strategic realignment where companies look at the debt and equity mix to become less levered. as we come into september, which is traditionally the main windows to be launched if the secondary market would continue to see the main trends at the moment, they will be the opportunity there to the fee as well if you look back at the aftermath of the 2008 financial crisis, it was pretty big business from the market

perspective. both recapping and monday tiesing. that level could be quite attractive >> what about those more coronavirus sensitive sectors. you mentioned a lot of long-only demand for very well-known quality companies coming to market we've seen a strong bid in the secondary market for travel and leisure specifically could we see more of these troubled travel names come to the market and get involved to help with cash burn? >> a lot of what we are seeing in the secondary market is positionry led you are seeing rotation those people are under way and will perhaps put more money back in that is driving the secondary

market performance history tells you you are likely to raise those lower. you'll see those coming to market and will be increasingly selective to what they will support. if they can look through the business model in the crisis then i think we will see some of those being supported, we'll get to that second phase of the market >> there has been a resurgence where we saw them coming to central banks. we saw sanofi selling its take what do you make of these existing share sales and can we expect more in the coming weeks. we will see more this is a function of the

volatile market. more normalizing towards 30 and coming lower in the after math of the shot you see. sellers will look at the port foal kbroe where they get opportunities, then they will look to do so. that will play out at the time they are looking to monday ties their holding to proceed when they can do so investors have been incredibly responsive i think we are up to 80 billion plus in the last four or five weeks globally generally seeing good returns in the after market i believe we'll see more in the coming weeks >> pretty staggering numbers there. head of capital markets at ubs coming up, divisions merge ahead of the commission budget today more on where the fault lines

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welcome back to "street signs. japan is set to launch a massive stimulus package worth $1.1 trillion. according to the draft obtained by reuters will be funded by a second budget on top of a similar package rolled outlast month prime minister abe said the government must take all measures to prepare for another pandemic the european commission unveiled its plans for a stim laus with the price of 1.2 trillion euros calling for fiscal coordination and warning against piling up debt let's bring in sylvia with more on today's determination

interesting to me how closely this proposal mirrors the french proposal that came in last week. >> absolutely. the proposal we saw last week from germany and france could be if the european commission uses this as a basis for its own proposal that could be market positive. it could signal that the union is moving closer to the fiscal union and could actually shed some of the criticism that the ecb will prop up the economies as to why the european union as a project is at risk the proposal we received today from the commission is important in that why the political contest is important when it comes to details what we are monitoring indeed

how big this recovery fund will be what sort of condition at will be attached. what we heard over the weekend from the frugal force. that is the four countries netherlands, sweden and austria suggesting these would be linked to strong economic reforms still the division about loans or grants. we are waiting for that commission proposal today to understand if this recovery fund will be made of one or the other or perhaps both. i have to say as well that we cannot forget the why the economic contempt of the european union we are getting this proposal for the recovery fund. that is in addition to what the ecb is already doing and in addition to the 540 billion

euros that union announced a couple of weeks ago. that is going to unemployment and activity and so on the measures we'll get to today is more medium to long-term and we'll actually see the implement and respect of how big this fund is at the start of 2021. >> stay with us, i want to bring our next guest, founder and ceo. thank you for joining us giving us a nice preview of what to look out for. do you see the main aspects of the french proposal being respect. namely its large size, the fact that it is funded by joint issuance and that it will be largely grants versus loans? >> yes the proposal came from the two biggest countries in the eu. i think the european commission

will take that proposal very seriously. the expectation is that the main elements is carried through in the documents we've presented today. i think the key point here is that germany has really taken an important news stance supporting the expanded eu budget aiming to those funds. that is the political signal here and why the development is so important to follow don't forget, we had a pessimistic instance with the court adding to this. all of the core indicators that we track just incredibly bearish to this

point. it is one of those things that could be an important turning point. i want to a >> i want to ask you about the timing here. do you think european economies can wait until next year to receive additional help? >> that's a good question. in this context, there are some good signals but problems associated with it >> one problem, we have these frugal countries backing against it pushing back is one thing. the other point you are making is perhaps this will only come into effect in 2021. we don't know this for sure. that will be the consensus that this is delayed. that really puts pressure on them again working as a ridge.

we saw interesting comments from the french governor that suggested that the ecb would step up the emergency que. we have very interesting tensions between the german court, pushing back policymakers trying to say, okay. we are doing something on the fiscal side that is a development and ecb in the short turn >> talk of environmental taxes as a way to pay down in coming here's do you see there being member state support for brusle's fresh owned resources like this. >> the frugal four companies are in favor of these steps. that could be one of the things that could make them compromise

and support the plan that is part of the bargain that could win them over. >> jens, thank you for joining us ahead of this really important meeting for european investors. founder and ceo. thank you sylvia for joining us as well. u.s. futures this morning are green. looking at a 300-point rise for the dow. today, we are digesting u.s. home sales and u.s. consumer confidence that's it for today's show i'm julianna tatelbaum "worldwide exchange" is coming up next. stay with cnbc thanks for watching.

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it is 5:00 on the east coast. summer spiking but does big tech have what it takes or is your money spent better elsewhere protests in hong kong. how will beijing and the white house respond a live report next history in the making in florida. we ready our first manned mission to the international space station after nine years in florida, theme parks getting ready to welcome bac