i'm craig melvin. thank you for watching. [music playing] welcome to "street signs." i'm karen tso. these are your headlines monthly gains put the markets on track for a record quarter the u.s. battles to contain the virus. asia and europe brace for second wave outbreaks a surprise change in leadership as the ceo is replaced group chairman tells us the move reflects an appropriate decision

>> caller: he's done a fantastic job but we have come to the next evolution of the platform they've come together and developed that a leadership change is timely shell may writedown assets by as much as $22 billion and says fewer sales will fall 40% building on the back of encouraging pmi data out of china which sees factory increase in june and expanding trends of export orders. the stock markets here in europe have been trading for an hour so far. this is the final day. the month, the quarter or the half after what has been an

incredible recovery phase. it has been a clear standout the trade just tick over in the morning session. there has not been a quarter appetite very small ranges is what we are witnessing on? chart. let's dive in to these boards on the many small markets selling in the uk, stock market down half a percent. disappointing overall for the u.s. stocks. outstanding has been the german stock market keeping pace ahead of the morning trade about a third coming off the italian market so far. the window dressing telling you what investors are bullish going forward on the next six months let's switch over and take what we've seen over the course of the month. the month has been decent. a look better at the start of the month. i would remind you we saw very

strong changes as we saw back in june and claw it back again. it was a little choppy in terms of the direction for the month, we've got gains of 5.5% in the market. mentioning how disappointing that was only less than 2% by comparison the ibex 2.3 and that has been one of the stronger days for the dax. keeps what you are seeing on these charts the individual sector level how it plays out some of the firmer ones on the boards technology very much in line with what you are seeing in the bank stocks and the nasdaq itself on a strong market in recent sector. real estate industrials and picking over some of those stocks there has been a stronger news flow with bail outs of airlines,

lufthansa and klm. that factor looking resilient. patches taking space at about .6%. between many bulls and bears that have been on the recovery trade the last few weeks fresh cases of the coronavirus has proven negative for oil and gas. let's look at what safe haven trade looks like bund down minus half a percent on italy, we've narrowed a lot of those ranges we've seen 1.8 plus percent we've had as investors draw on the concerns of the price level now down to 1.37 guild 1.5. a lot of tensions around the

trade agreement on brexit. i think this moves lower is telling you that investors do have some april tide the french market is negative. that usually closes the flat line and is positive what is pushing lower. the coronavirus crisis is accelerating structural trends in quality, sustainability, globization according to the blackrock institute. second half, activity restart, policy acquisition and real resilience joining us, chief fixed income strategist at blackrock. investors are wondering if there is more ahead on stimulus. we are seeing a shift because of some of the trends around

covid-19 just talk us through the report your in investors need to think about. >> this is a very important idea that in some respects, the future is running at us. some of the trends we saw in place before the covid outbreak have been dramatic will i accelerated. things like inequality globalization, these are the super trends being pushed very strongly at us by the crisis the inequality, public health crisis exacerbating entrechled forms of inequality, race, the pandemic has exposed global supply change and in the health crisis policy has gone through a

revolution blurring the lines on one side that is something investors will have to deal with for a long time lastly, i think investors have put a huge price on sustainability. the heighten sense of concern investors have about sustainability the crisis will take a step back it has really accelerated four trends which investors have to pay attention to going forward >> when you talk about the inequality story and acceleration of trends, the stock that jumps in my mind is facebook it is in this tug of war trying to be a player and is caught up in some social issues. what do you do about some of

those concerns and stocks that might have a different story in future >> not to single out a particular name but to talk about the market in general, clearly, a number of names and factors have really benefitted from obviously the digitalization, the movement into internet based transactions, et cetera. from that quality perspective. that is something we'll continue despite the performance. here is the particular point the landscape is changing as economies reopen activity restart being the first investment theme is about how our economies reopen and about what investors and consumers do. your point around facebook bring two of these trends together the idea around inequality and

sustainability and how investors are handling the movement into digitalization it is a very interesting time and exactly the point we have to look at how does the world emerge out of covid-19 and what are the trends and the things the companies do that are different than before. >>. >> the faang performance has been stunning seeing the remote work in office stories they are a part of data centers or if they own logistic warehouses what do you do from here do we see a broadening out of

their own in these particular areas where they will keep on performing >> there is a little bit of both one area i heard you talk about looking at recent performance is the european stocks. we have upgraded from under weight to an overweight on the basis of a few things. one is the policy response, which we can talk about later, that has been a very big upside in europe. fiscal, what is happening in germany, the eu recovery fund. all of those things have been very powerful. plus when we look at the activity restart, we see a country or region that dealt with the virus very severout breaks initially a successful way of dealing with the virus right away setting them up for a positive reopen. one of the areas that talk about

investors and those that have been focused on the market is to look at europe as the way of playing on the different ways economies will reopen and that activities will emerge for us, europe is an area where we have been under weight and we have moved to overweight >> talking about fixed income. your area of expertise are we going to see more monetary stimulus and that will see a further move hider in some of the bonds or whether the opposite and we start to see inflation rise down the track because of the supply chain disruptions and pent up demand story. what do you do with the mixed income space >> over the medium term, i suggest it is an income and carry thesis you look at the volatility of

increase rates >> treasury and rates and since the fed announced major policy and initiative in the third week in march 10-year treasuries were at 71 basis points march 4 and their in the high mid-60s now. very little volatility in the underlying treasury rates. that is going to be a very positive thing for spread assets so things like investor grade, high yield are going to benefit from a very table rate, which many respects is the design of central bankers. they have and want to keep the upside to yields capped. so that the financial conditions remain easy but yields are very low. the balast or what they provide

is more than it has been because of the overall yields. i think treasury yields are going to be very range bound for investors in fixed income, they should look at spread assets to give them both carry and value. it also means longer term, this idea about inflation is something investors should pay attention to it is not something for the next couple of weeks or months. longer term, the policies that are in place, particularly if the virus outbreak remains subdued remains positive for the inflation going forward. the inflation bonds are a very big investment but more on a strategic basis rather than a tactical basis >> so much on the report

we might keep you around the merging markets. thank you very much. we'll come back to you shortly the chief fixed income strategist at blackrock. a look at some of those markets state side as we kound you down to the first half of the quarter. still down 10% keep in mind that extraordinary selloff. we have not quite recovered some of those lost gains for the first half 27,000 we did hit the early start of june. that has been a little give back to 27,595 at the start of the session. a strong recovery up 16 odd percent. let's get into some of the other markets. in paris, down 5.5% for the

month. it has been many of those big tech stocks and biotech looking for those vaccines the performance has been strong. up 28% also positive for the year up 10%. ahead on the show, asian markets close out a difficult first half we'll bring you the final reads. that's coming next you say that customers make their own rules.

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china's manufacturing activity expanded faster in june rising 50.9 versus 50.6 in may we have some numbers to show for the end of the first half. china still seeing a loss for the first half just minor 2.1% down the size of the balance under well -- under whelming

you can see the consistent recovery taking place. a lot of the question mark too for investor stocks first. seen as the mark which were clearly the gains. let's switch over and see what japan has done up 17.8% again, up the first half 5.7% full. let's come back to the chief strategist at blackrock institute. the pandemic has dealt a generational shock why do you think there are concerns there >> when you look at the health impact on the crisis in emerging markets, we see a region where again, it is not one country

where people talk about this to the single entity and on the other hand, it is not. on balance, we would say the policy response from the fiscal and monetary response is going to be a more challenging one than we've seen in developed markets. there for, as an investment region, the look forward to the hard dollar bonds on the view that the policy response is such a powerful impetus we are just not getting the same thing in emerging markets again. there are going to be exceptions for the region, it doesn't benefit the same way as we are seeing in the developing markets. >> there has been a lot of noise around the trade wars and

deglobalization. the other regions have been shot down what happens from here do you see investors moving assets away from china and away from emerging markets in general for the deglobalization theme. >> take on balance, what we are seeing is the trend that takes place really coming from the u.s./china trade sanctions has remained a source of that concern was exacerbated by the health and covid crisis. going forward, it is not as easy to say look at one place to another. one country to another country from asia to latin america, i don't think it is that simple. the discussions we are seeing about on shorishoring in the u.s it is a complicated question

the point is that this decade long move is reversing very quickly. i would note that we have the election in the u.s. coming up obviously in november. despite that some of the volatility in u.s./china that the u.s./china trade tension is a view that resonates well with voters across america. not only republicans but also democrats. i think this is clearly a view that will stay not only politically but as a result of the covid crisis >> i want to get into sustainability theme very mixed signals the environment was front and center davos was the major theme for managers and coronavirus protecting workers now it feels as though managers

are still paying attention to the threat maybe they don't want to be caught out like they had been for the pandemic >> this is one of those megatrends that have been accelerated. what we call real resilience exactly the point you are making we are in a different world than we were. it has been accelerated and it has been pushed at us through the covid-19 crisis. investors are concerned about real resilience. how do you push in the safety in the ford folio and the safeties for the offset of the a&p 500 that's not the simple answer anymore. it really centers around sustainability which gets that really giving the portfolio

resilience, whether it is climate change or responses to both of those things in our mind, sustainability plays itself through portfolios through the real resilience. >> asking you about the rise down the track coming back to what central banks do but the concern of debt levels going up for companies and debt levels and people who have lost their jobs and have mortgages to pay down will central banks be allowed to actually lift rates? >> look at what is happening in the market they are explicitly looking at the rate of control.

to make sure the rates don't move higher with the conditions coming to look at that the reports don't rise with respect to the stimulus package. that is likely to be placed for some time. that will be an important feature in the market. i don't think in the very near term rising rates will be a problem. normally in a situation where you have an increased debt level and rise in borrowing cost 1% increase in debt to gdp in the 10-year treasury rate that would normally core respond to that longer term, i think that is something we need to be

concerned about. the medium term, the idea of rates increasing is something the bank will control. involving in the markets is going to be very important in keeping rates where it is. that will be a document nachbt term here. so that rising rates will come to fruition because of the central bank policy. >> putting into context, the level intervention thank you for running through the report chief income strategist, blackrock investment institute ceo of standard life aberdeen to step down. skeoch has been in charge since 2019 having led a merger between standard life and aberdeen back

in 2017. describing what investors could expect from the incoming ceo steven bird. >> caller: this is an appropriate time it comes to a point as we enter the next evolution on the platform they have put together and developed that a leadership change is timely coming up, the eu will decide which countries are exempt from the travel ban in a vote that will likely leave americans stuck state side le time that i suit up, there is a chance that that's the last time. 300 miles an hour, thats where i feel normal. i might be crazy but i'm not stupid. having an annuity tells me that i'm protected. during turbulent times, consider protected lifetime income from an annuity as part of your retirement plan. this can help you cover your essential monthly expenses.

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welcome to "street signs." i'm karen tso. these are your headlines monthly gains put markets on track for a record quarter as the u.s. battles to contain the virus and asia and europe brace for a second outbreak. safe life aberdeen prepare for a

0 change of ceo. >> caller: this is an appropriate time keith has done a fantastic job as we enter the next evolution on the platform they developed that a leadership change is timely >> oil shell could writedown as it lowers outlook and says fuel sales will fall 40%. joining the boycott against facebook as over 160 companies worldwide suspend advertising. telling this show, facebook remains a key platform >> be careful what you wish for. facebook is the engine of growth for small and medium size

businesses we have been looking at the start of the market and how they fair looking at travel and leisure. a look at the bailouts and a lot of reopenings. the sector, very slim recovery for the quarter. single digits at 6% versus the destruction we saw around covid-19 still around 38% for the first half clearly the experiences many millennials have been seeking and worldwide travel has come to a halt the next phase will be key whether we see demand pick up or go back to where we were with another spike in places. a look at energy with the news flow around agreements and the number of shale producers filing

for chapter 11 announcing it could writedown 22 billion in assets and a drop in demand caused by oil restrictions lowering outlook for this year, 2021 and 2022 after bp announced a $17.5 billion writedown in recent weeks the u.s. is not on an eu list of travel restrictions to the block. confirming today which countries will have access to the region with a list that will include japan, canada and australia. this has been a wide-ranging

discussion of who is on the list and who is not >> absolutely. finally, later today, we'll know whether the european union is exempting the country from travel the countries will decide to close their borders to nonessential travel. now as they are reopening their economies, the european commission advised them to essentially open their external borders in a gradual manner. this is why we'll hear from the european union later today the governments are due to vote on a list that would be prepared last week that are expected to be exempt in the first pais page the expectation is that u.s. is not on this list

on the other hand, china is. that is dependent whether the chinese authorities also say that european travelers can also arrive there we are likely to hear from the european union later today if this vote goes ahead to get approved, it's likely that the eu will not say this is not an anti-u.s. policy because many of the countries are still under travel restrictions that list includes brazil as well. this list was prepared based on the health situation of these countries. let's not forget at this stage, the u.s. is the number one country worldwide in terms of infection numbers. having said that, we need to monitor the implementation if this list gets approved

it is ultimately the matter for the governments to actually implement it if they don't do that in a ko d coordinated way. that could potentially hurt the single market as well. seeing if this list of 15 countries will be approved later today and finally how the eu states will actually put it in place. >> we are watching this closely. thank you for walking us through it >> mark manduca with us. when we spoke many months ago talking about potential blocks country by country travel. here we are talking about the reopening of economies it feels as though it does make a difference of ticket prices. how big a difference does it make in your view? >> i think what sylvia mentioned

made a lot of sense. i think we have a lot more clarity now about which countries can be flown to and from the uk without quarantine the uk government is trying to balance the infection metric with economic well being when it comes to the airlines, you have to understand that this summer is not going to be normal the ramp up will be expensive. flying will be anything but the normal experience. masks are mandatory, disinfecting the planes will be normal the regular procedure will be to arrive early i think planes are not going to be as full as we are used to this summer. start thinking 60 to 80% utilization and load factor. the data suggests pricing could

be down 5 to 30% on a large portion of the eu routes and roughly 40% of the schedule will be flying in july. as much as 70% into eu in mid-august i think it will be a mixed summer >> when we talk about bells an whistles, it used to be a hot meal now it will likely be a testing kit. >> it will be one way about gaining confidence until you get a vaccine, it is going to be hard to get full confidence in air travel over the next 24 months one thing sylvia raised is this

buy buy for indication between short and long-term routes trans-atlantic makes 15 to 25% ee bit margin in our thinking. a lot of the long haul carriers depend on that route it is not so much a safety question as it is profitability for these airlines it is very hard for these network airlines to run their short haul routes if they don't have a connecting flight at the other end. so safety, i hear you loud and clear on some of these long hauls for the summer >> thinking investors in the

bailouts from air france, klm where we've seen more get involved griping from other players like rye yan air in the playing field. trading for investors that have not had many help. most ramp ups, you intend to go for the airline that has the most leverage and the most excitement and as you say bells and whistles i would say stick to the airlines that have point-to-point networks and have leisure travel and focus on short haul that will be the flow most readily available. we've seen effectively, a middle eastern normalization of airlines money taken on board that we'll

have to pay down over subsequent years you want to shift your in investment to the ultralow carriers and aren't exposed to long haul. >> do you think the airlines now will make it or we'll see more casualties >> it will depend on this winter if it is the recovery we think we don't see the short weekend rates or perhaps a second wave, there are questions if these companies have raised enough money. that will only manifest itself once it gets past the summer

hump this faux demand or people having been pent up for summer months we'll know what normal months will look like and whether companies will have enough to get through what inevitably will be a tough summer. >> thank you associate director of research at citigroup >> a flash of wires. deaths from all cases in england and wales during week of june 19 have fallen below five-year average for the first time since midmarch still some clusters we are watching around leicester. that is a concern for many local authorities. coming up on the show, the facebook boycott campaign goes global we'll find out what is the latest from the social media

giant after the break. i got an oriole here.

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wells fargo shares fell after the lender said it planned to cut its dividend and rads capital concerns around the bank saying it will set aside money for the losses this quarter. reporting quarterly earnings for the 14th of july jp morgan, citi and goldman will return payouts powell to warn of recover rye depends on virus being kept in check the central bank boss also likely to caution about the fresh challenges in recent covid changes. speaking to cnbc white house economic advisor larry kudlow sounded the more outlook

>> home builder report was smashing retail sales continuing claims have come down quite a bit. apple mobility new index pointing to a v-shape recovery california and texas have logged another day of infection los angeles has become a new outbreak epicenter we have this new report. >> reporter: crowds are gathering at two distinct and disturbing places. coronavirus testing centers and venues with the number on the incline. riser of.

>> the window here is very narrow this is something we've known. if you fall behind as we have, you have to act aggressively >> broward county joining forces to close beaches over the holiday weekend. >> a crowd here would lead to a spread of covid-19 >> many doctors suggest the key to beating is personal responsibility >> wear a mask, wash their hands. americans are in charge of their destiny. take charge. >> a disaster right now that is still growing. jay gray, nbc news

adidas and rebock have joined a group to boycott facebook joining us, deputy director, nyu services we've been talking about a long list of consumers joining. what does it mean for facebook itself for example, mark zuckerberg has said the company will now put warning labels on posts that

break its rules even when news worthy, which would open the door to labeling posts from president trump for one key example. >> one initial argument from mark zuckerberg is that if you start to monitor, it brings more censorship and marks the end of free speech. what do you think you'll see here a tightening of the noose around free speech or the opposite? >> i think if you label people's contributions and tighten your rules on what can appear on your site, you are limiting free expression in a sense. zuckerberg has not backed off his general position of the platform or voice as he puts it. there is attention here and

something has to give in concern to the platform. >> how far does this go against facebook and other platforms we've seen in the past where many people were horrified around privacy breeches but they didn't switch off their facebook accounts because it was controversial to do so is this time any different for advertisers lining up for changes? >> what is impressive so far is the large number of companies. more than 160 so far that have lined up to say that they will swar off facebook advertising for various periods of time. some through the month of july and others through the end of the year the question is how many companies have lined up. if it turns out to be a one-month or six-month affair,

that will not bring facebook to heel if it turns out to be more substantial, than mark zuckerberg will feel it in his pocket book. >> you can see the major advertisers carry weight one mentioned its pause at facebook and then reacted. if you look at the overall numbers and revenue for the lying share of facebook, 2 does have 8 million advertisers when we talk about the major ones many smaller players don't have anywhere else to go to advertise. it is hard to see them really pushing through with a campaign against facebook, isn't it >> yes tha that's an excellent point that company's advertiser staples are very large i don't think there is any dilution that a month-long pause. you mentioned unileve, chlorox

and adidas will impact >> lumped in here is twitter despite the fact that they tackled the tweet very difficult with the facebook post left up there glorifying shooting. does that mean a hit for all social media, not just facebook at this point? >> i think facebook is the clear main target. it is the largest with 2.5 million users. far bigger player than twitter in financial terms anyways as to whether it is fair, these

will continue to struggle to keep themselves clear of content. that is the squal of which they operate. if you've got millions and billions of posts coming in, you are not going to catch everything even if you have the best ai and very large numbers of human content moderators >> i agree we saw that around the case with facebook and the shooting in new zealand being very slow to respond. and the question of how low it will be to target content. >> we talked about the leader from blackrock, very hard to arrive at the assumption when you think about the election and how many speakers there will be. not just president trump and not just joe biden and many others from both parties. >> that is correct

i think we are in for a long season of a lot of misinformation, hate speech and other stuff on line. coming in anonymously with high visibility author like president trump. coming from forces unknown or disguised. i tha is i think that is a process just beginning but will get through late summer to the fall. >> thank you for joining us today. the deputy director nyu stern center for business and human rights we have some news crossing from hong kong. the national security law passing in china today carrie lam is asking to respect our country's right to safe guard security

so speaking out against some of the pressure lam saying inter evnational security the rights of the territory saying no government should turn a blind eye to national security threat so again, mounting a threat to what has been pushed through from beijing and expected to be passed through legislation in the territory. let's take a quick look at how u.s. futures will start. another important one for wall street as we count down to the end of the month slightly patchy. green on the nasdaq, red on the dow and s&p. "worldwide exchange" is coming your way next. i got an oriole here.

eh. common bird. ooh look! over here! something much better. there it is. peacock, included with xfinity x1. remarkable. fascinating. -very. it streams tons of your favorite shows and movies, plus the latest in sports news and... huh - run!

the newest streaming app has landed on xfinity x1. now that's... simple. easy. awesome. xfinity x1 just got even better with peacock premium included at no additional cost. no strings attached. just say "peacock" into your voice remote to start watching today.

it is 5:00 a.m the top five at 5 will extending the rally and the great stock debate ahead extraordinarily uncertain. how jay powell chimes in ahead of testimony on capitol hill today. more pressure on facebook as the list of companies boycotting grows by dozens in the last 24 hours. overseas, china passing the controversial national security law for hong kong. we'll get a report from the main land comin