she flew from afar and awakened new sight and only i see her my angel of light. [music playing] >> translator: i have to say that there are still big differences. that's why i can't say we'll reach an agreement this time around i hope we do >> european leaders arrive for the first in-person submit mmit leaders brace for heat on the discussion of $7 billion

recovery fund. >> the agreement would be very bad not only for europe but for the markets. ericsson tops the stoxx 600 as european roll out drives demand but the leader says he's worried europe is missing out. >> china has accelerated the rollout and it continues at a high pace in north america so 5g is happening at an increasing pace in the world i worry that europe is falling behind >> daimler shares accelerate as more cost cutting forces the carmaker to halt production of mercedes demand in u.s. and mexico as it reveals a

$1.7 billion operating loss for the second quarter the last dance for a lockdown growth shares plunge in extended trade as the streaming giant adds 10 million subscribers but warns growth will grow sharply to its weakest level in years >> beginning shortly, some comments crossing from the european commission and she has effectively said that these stakes couldn't be higher and all necessary pieces are on the table and a solution is possible from her leadership perch hoping a deal would be struck today as she took to the red carpet a short time ago what we are also hearing this is a group of the frugal

four leading the charge said he's not optimistic ahead of the talks on a recovery fund he said netherlands will stick a a position recovery funds must be tied to reforms a lot discussed behind the scenes about some grants and loans being tied to the countries and suggestions of compromise and the latest crossing the wires right now, julianna >> thank you, karen. we've heard from a couple of other european leaders french president macron said europe needs to show solidarity and ambition if it is to agree on a covid recovery fund >> translator: this is a moment of truth for european ambition we are living through a global health crisis and socio economic

crisis coming to agreement and coming hours are absolutely critical to achieving these goals. >> european council president also urged leaders to come to an agreement. >> this is an important decision the first since the beginning of the crisis we have worked very hard to prepare this summit. i know it is very difficult because it is not only about money. it is about people, european future and unity even if it is difficult, i am convinced that it is possible to reach an agreement >> comments are crossing there one of the big ones is really the tone from the frugal four. i want to highlight some of the challenges the optimism some of the peripheral countries have as

resip ye recipients of the funds what they are weighing in on. saying he's not optimistic on these talks and he's sticking to a position about recovery on reform that does not lead to a lot of compromise, does it? >> we know there are two different groups going to the summit most of the european countries are on the same page when it comes to recovery and on the other side, we have the frugal four headed by the dutch prime minister and that they are asking for more conditionality attached to this fund. the crucial bit here is that we are seeing leaders meet for the first time in about five months. it is very relevant. this is how they are used to making deals they get together and meet for all nighters and reach for a breakthrough

we could see that happening already this weekend at the moment, it seems like there is a chance of 50/50 whether we are going to see a deal or not. some of the stumbling there if we see the governance and it has been asked that the different government put together a reform plan to outline how they'll be investing the money they'll get from the eu and at the moment, that government is asking for those plans to be approved at the council and many governments are against the idea because they'll be giving them including the netherlands and also every eu country, a lot of power about each other's national plans. i just wanted to give you the outlook that the prime minister shared with us moments ago sharing some thoughts ahead of the summit

>> i'm seeing how the amounts are calculated it is not very fair. if you look at unemployment rates of the last five years, what is the impact of the crisis for me, it is more important to see what is the impact now we decided to do large scale testing, we test over 10,000 people a day because we are sure to test a lot makes it possible to stop the spread of the virus as quick as possible. we are able to find a third of all the positive tests through large-scale testing and also testing commuters. this is not taking into account when you account the expenses of the crisis there is still some homework that could be done on how we calculate the expenses when we speak about solidarity, i have to admit i am surprised and happy about the testing that makes now that we have high

figures. it is normal if we test higher, that is normal that we have higher figures. some countries say, they have a lot of positive tests, we'll see how many positives and we have the good figures the problem is we speak global and act local very often as i said before, there are some homeworks to do still now. i took enough shirts for the next days to find an agreement to leave without an agreement would be bad even in a crisis time, we are not able to agree. that is a problem for me >> prime minister, i'm worried about my children and grandchildren. who is going to pay for all of this debt to government, corporates,

households it has gone through the roof the latest figures now europe and the european area have the same problems who is going to pay for all of this >> the fact that we speak about resources, that's new. a lot of topics about the resources and we speak about plastic tax. we agreed in paris, remember we gave us ambitious goals if we want to fulfill what we say and be credible, the people that want to import products in europe and the limits you paid if not, you pay a tax. we speak corona and money. a few months ago, nobody spoke about those. we still have problems with our environment. it is important to keep that in mind too then there is a discussion about the digital tax and a lot of different points where we say as

european union, we want incomes and resources. on the other hand, we guarantee the order amount so that means that the payment back is a long time about 30 years together. the fact that we have crisis today and we have to react today. not to react to this crisis now, the bill will be even bigger tomorrow >> so this is likely to be a long meeting, guys we are not expecting a breakthrough in the coming hours. there is still a lot of differences to determine how this money will be distributed and how they'll be repaying for this debt in the future and how they are going to be overseeing how the funds will be distributed by the member states i wanted to give you a final note that we'll be discussing this since april 23. that was the last time we had the submit they agreed that the commission

needed to come up with a proposal and since that date we've been discussing about this recovery fund and how the euros should be distributing these 750 billion euros. >> thank you for breaking it down for us. let's bring in our next guest, european economist to weigh in florian, it felt like there was so much optimism going into the recovery fund. a lot of differences but investors had been bullish since this proposal came together. now this morning, throwing a little cold water. the dutch prime minister weighing in saying he's not optimistic is this all just political posturing or do you think the mood has turned a little more sour

>> it is difficult to say ahead of that summit it is crucial and we expect the eu leaders to make some serious progress this is the first summit where they sit together in a room. that could spark a positive surprise yes, a breakthrough is unlikely at this stage not only are they far apart. they are meeting in a room for about 300 and they are about 27. you are not going to have these by lateral talks over a glass of wine these differences still remain pretty different will probably narrow a little. there are some very sticky

points no breaks from now the best result could be that they agree to meet again before the summer break at a summit where they would have an agreement in principal. >> in terms of the sticking points, you mention conditionality and governance. on conditionality, the frugal four want to insure tut funds. italy front and center when it comes to being a recipient to these. do you think we could see any give to the italian side in terms of what they are willing to propose on the reform that could get the frugal four across the line here? >> we've seen so far from the italian side is that prime

minister conta came up with so-called s so-called sim live indication simplification it would have to make us reform and investment agenda more ambitious to accept that the thing is, the frugal four will look at conditionality and governance in combination. the less italy could provide or would be ambitious in its reform and investment initiatives, the more the frugal four, especially the netherlands, will suggest that they want to have the final say of giving a green light to

disbursement the more the italians give, the less the dutch would insist on that and the other way around. >> this recovery fund has been wrapped up with the long-term eu budget, it was a clever tactic in terms of kbcombining them do you think we could see in some way that frugal four are compensated in the long-term budget as a way to get them on board for the recovery fund? >> yes that would be one of those options where they either have to pay in less because they get a higher rebate or more out of it in this regard, there could be a bit of horse trade in the fund and the long-term budget

at the same time, and this would be a more explosive option in the eu or other major countries, they would consider to push ahead with harmonizing corporate taxation the netherlands have quite a favorable tax regime if countries give green light to the european commission to basically fast track some of these initiatives, the dutch resistance to the proposal would probably soften a little not sufficientily the way would be more through rebates and more ambitious

reform agendas by those countries which we would expect to receive the large shares of the money. >> the digital tax is one of the components of the european budget over the next seven years. europeans are pretty good at delay taxes and talking with americans. that doesn't seem a lot of appetite to go it alone because of the fear of trade or retaliation from the americans do they continue to pencil this in and maybe defer taxes to a later date >> yes i think they will. at the current stage, ratcheting up the differences with the u.s. is probably not a wise option. in this regard, the taxation may not be the road ahead. the eu is thinking about a

plastics tax and carbon board adjustment so the initiatives we'll put forward in all respects of how the eu can risk their own resources. that may actually be one of the big steps of the recovery fund and the long-term budget that we get even more integration among those european countries not only are they sharing a bit of the debt burden but at the same time, they could make up their mind and say, all right. okay we go forward with our own resources, which is a requirement for coming along towards, let's say not a hamilton moment but another step

of such a moment >> some quarters of europe are certainly like rules when you look at what could be debated, one suggestion would send out the money through grants and conduct annual reviews. that does provide fees and intervention like we saw with the constant having to clear hurdles. the other compromise would start loans and write off those and turn them into grants if certain conditions would be met. what would be more palatable for members for the likes of greece and other member countries >> i think a lot of those countries, which expect to receive a big chunk of the money acknowledge that they have to get their economies up to speed. especially when it comes to

italy. so there is this acknowledgment that they have to implement reforms, which other countries especially the netherlands are requiring to do. i think the addition of those loans and grants with those countries like the frugal four might be palatable in addition to the strings of money weigh softer than what we had seen eight or nine years ago. currently, it is a lot of this horse trading going on of selling whatever agreement we'll hopefully get to your domestic

audience and seeing prime minister conta and where the sentiment has been rising there a lot about how do we come to a deal which is palatable and beyond the substance the expectations you build before hand and you communicate whatever you agree on after such a summit this is really crucial even if we don't get an agreement now. >> thank you you can see on the dollar rates, we are slightly shy of the 114 handle we've climbed a long way to get to the 1.14.

we are a little above it yesterday when madam lagarde was talking about the potential of this recovery fund a little higher than where we are this morning the one to watch if we do get positive news and it could be market moving. we'll check on that currency for you. come back to corporate news and we'll explore the ericson numbers. he's concerned europe is falling behind in the race for 5g roll out. ♪ ♪ now is the time to support the places you love. spend 10 dollars or more at a participating small business and get 5 dollars back, up to 10 times with american express.

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a quick look at some of the european markets you can see the german stocks in the green. reversing to the tune of 1%. very much eyeing this recovery fund and the detail that will come out of it still some option that will handout some of the grants and loans. skuing the balance and at the top 1.7% higher.

technology topped 1.1% health care stocks out as well offset by the banks. banks on the back of 1.6% travel and leisure reversing today. the big corporate news has been ericson. confirming financial targets for 2020 and 2022. the telecom maker signed 99 new 5g makers in the quarter a drag where they said they could return to profitability at the time telling cnbc, the ban could end up speeding up decisions on 5g investment >> it is all about delivery solution and new prices. that's the only way we are going to long-term win what is good with the decision

is it removes uncertainty that could be hampering investment in 5g in europe and in the uk the reality, europe is falling behind china and north america so i think it is good we can speed up and focus on speeding up the 5g vefltment. >> daimler reported a smaller than expected loss of 1.7 billion thanks to sales in china and a jump in sales last month. they will halt production in creating sa creating sedans in u.s. and mexico in an effort to cut the cost >> ab volvo and trucks and construction equipment maker will cut 4,100 jobs as a plan to reduce jobs.

coming up, russian hackers are accused of vaccine data theft. we'll delve into that after the break. businesses are starting to bounce back. but what if you could do better than that? like adapt. discover. deliver. in new ways. to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back. but bounce forward. that's why we're helping you stay ahead and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today.

>> translator: i have to say that there are still big differences. that's why i can't say we'll reach an agreement this time around i hope we do but we have to look at reality in the eyes >> the first summit as leaders brace for heated negotiation on the agreement on the block's 750 billion euro recovery fund >> it would be bad for europe and also for the markets ericsson tops the stoxx 600 and reaffirming its target says global 5g roll outs drive demand he worries europe is missing

out. >> china have accelerated the rollout to the future and the infrastructure it continues at a very high pace in north america, so 5g is actually happening at an increasing pace in the world i worry a bit that europe is falling behind >> daimler shares accelerate as more cost cutting forces the german carmaker to halt production of mercedes sedans in u.s. and mexico as it reveals an operating loss for the second quarter. the last dance for lockdown growth shares in netflix plunge after the streaming giant adds over 10 million new subscribers in the second quarter but warns growth will slow sharply to the weakest level in years

>> it is a big day in brussels today in a key meeting to debate the 750 billion recovery fund to help out hard hit states in europe this is now the inside of the meeting. you can see some elbow bumps there. one looks to be some what breached many leaders arrived wearing masks. they took them off as they communicated their messages no journalists there. the conversations are niceties at this point. the nitty gritty looks complex there has been push back from other states and too many

attached the group of nations called the frugal four led by the netherlands calling for conditions and reforms to be part of the mix. other factors to and the amount of testing they embarked upon and the amount of testing and the cost about escalating the costs in other countries versus some others the other big factor as we've been weighing across the block about how they feel for european leaders in the tax slated for the budget and suggesting there is not a lot of appetite to go it alone for fear of retaliation a feeling that it

is better for the global block to lead the discussions in the united states where tech companies will be caught up and paying more taxes in europe. a number of items on the board to discuss today ministers and the portuguese discussing with his counterparts some measures today discussing some of these conditions with the frugal four and angela merkel doing her version of an elbow bump there as well emmanuel macron close behind that is key because the franco-german discussions led us down the path. they were the two nations behind the scenes that got together some form of solidarity. this was the moment to step up

but also angela merkel living through this crisis and being a lack of motivation from leaders to rescue the block and years of st stagnate growth. as you've seen across the united states, big rescue packages in the mix. this is europe's moment to stand up and show solidarity some warm relations. we were talking about how socially zant members will be 27 members in a three-person event. not a lot of social distancing taking place right now >> several leaders have called for unity and crafting a

response but warn a key difference still remain. >> i think we need all first, strong united unprecedented crisis and pandemic and kick start european economy of course, it means all member countries will need to make some compromises. >> this is a moment of truth we are living through a global health crisis and that requires a lot more solidarity and am birgs. france and germany came to the decision on 18th of may. the coming hours are critical to achieving these goals. >> it is a difficult decision. it is the first of the summit since the beginning of the crisis we have worked very hard to prepare this i know it will be very difficult. it is not only about money but

about pechl and european future and our unity. even if it is difficult, it is possible to reach an agreement >> when i was minister of mns, i degree the debt. we have a growth saying all member states would compromise adding tough talks lie ahead >> i have to say big differences remain i can't say we'll reach an agreement this time around i hope we do all members must be willing to make big compromises to reach a

deal good for europe and citizens in the face of the pandemic that addresses the economic challenges we are facing that's why i'm expecting difficult talks ahead. germany and france will together give support to european council president who has worked very diligently now we all need to work hard >> european commissioner said today's talks should be an opportunity to modernize the block's economy for the future >> the whole world is watching us whether europe is able to stand up united and overcome this corona crisis strongly with the budget and next generation eu, we have the chance to overcome and modernize our single market and union to bring forward the green deal and digitalization and there for today is of utmost importance.

>> let's leave the developments there for now and give you an update in the u.s. the u.s. has reached a new milestone in the number of new cases. more than 77,000 cases were recorded in one day according to the latest tally nearly 1,000 lives lost in just 24 hours as florida, california and texas all reported their biggest one-day jumps as colorado became the latest state to issue a state-wide mask order amid the surge in new infections >> pretty notable development in the last 24 hours. russian hackers have attempted to steel coronavirus vaccine research according to american, british and canadian security officials who issued a joint statement yesterday. >> the pandemic has made central banks shift to a debt dominance

policy regime according to a new report resulting in low bond deals that mean returns could improve for private access and equities. to discuss this view and broader out look, i'm happy to have the head of asset allocation and macro research thank you for being with us. let's kick off with the central banks. they've been a huge factor and key driver in asset allocation and what we've seen in equity markets both evolving in their view of the framework?

>> it is not possible for them and the qe it is not possible. we are moving towards the modern theory and control combination of both. meaning banks should continue to provide with liquidity and develop the space showing emerging economies to sift in the growth because that is which we are in the next decade and at the same time, growth should remain very low as a consequence of growth, continuing in growth

first and to finance they'll be obliged to help people and distribute social benefits in order to contribute to the low economic growth environment. this is why in a way and conclusion in an answer to your question, banks are losing aggressively banks are now a tool and monetary policies are more and more a tool for governments to sign off as a result of the social benefit distributions. >> fascinating what you've laid out there. fascinating what all of this means, you make an interesting

link your base case will prevail but in a down side scenario, we could see a rise in populism could you layout the topics? >> innovation is one of the source drivers it is explained why those are supported through deficits for people. we are in a economic environment

because of the loss of the banks, we have face a new kind of risk. we have shifted away this risk according to me is the rising risk of monetary crisis since early 70s, we have splitted economic power with governments and with the independence of the banks. as they are losing their independence, there is a risk of debasement or depreciation or currencies as they'll reflect more directly the political power and government as governments are turning and

moving towards the populous rhetoric and policy, it put together the currency of the money and if we have a depreciation at the point of the time not for maybe the next two or three years, we could have at the point of the time the currency depreciation somewhere which could trigger the process and the crisis something we don't know or experience is the decay in the developed economies. >> we'll have to leave it there.

hopefully one of our team will write this up. the head of asset allocation and asset research coming up, we'll explore netflix and taken after hours on the miss miss that wil we could never do what they do. l returnn do it be a partner that never quits. verizon is the most reliable network in america. built for interoperability and puts first responders first, giving their calls priority, 24/7. we do what we do best so they can too.

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coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports.

netflix shares plunge in extended trade after the biggest miss in 16 years adding 10 billion paid subscribers as lockdowns kept people at home but q 3 additions at less than expected this has been an interesting set of numbers because it is show and tell how they've done amid covid-19 what did you think of the report >> i thought this was a really strong report. and thank you for having me on

to talk about netflix today. i understand concerns over guidance but again, as noted in the share holder letter, there are going to be uncertainties going forward. quarantine is a big part of that but what we are focused on is the long-term tail wind of cord cutting. that is going to accelerate the number of subscribers long term, not focused on short term here >> with so many other players in the mix, why do you have the view on the lone term in the ability to lift prices and no advertising supported model here >> there is a lot of factors into why we believe netflix is going to be successful in the long term. primarily, we are focused on the fact that this is the first screaming service out there.

it has a high-brand value. it is the poster child of streaming. others haven't lived up to the hype of others surrounding them. looking at hbo max and peacock, they've really missed the ball in terms of distribution they came out and they are not on roku or fire tv which control almost 70% that's 80 million households netflix is global. distributed everywhere on your phone, ipad, tv, even in cars, they are in teslas we are bullish because of cord cutting and people giving it a chance once they do that >> i certainly take your point that netflix is ahead in terms of distribution. content is hugely important where hbo max and peacock, our

parent company, have a bit of an edge we've seen them pull content from netflix's, their have exclusive rights yes, they'll be at a disadvantage but surely have an advantage in content >> sure. but i would say netflix has been catching up the last six years they've turned their streaming service on to go to to watch your favorite reruns of shows but now they are focusing on original n originals. 25 to 30% of all content today is actually original content a great example, look at this year, they noted this in the call esterday. they didn't have a single competition or reality show. they have three, "too hot to

handle." "love is blind" and my favorite "floor is lava." they have led and have a ton on backlog. >> true but that comes as a cost in the absence of ticket sales and advertising, it is difficult for analysts to judge how valuable this content is return on investment when netflix does vest in shows like this. how do you look at that challenge? >> absolutely. on the spend side, the cost per hour of netflix right now sits around $20 u.s. and 17 cents globally cable is under a dollar on cost per hour the expense they are doing is going to pay dividends in the long term because they are going to build in the future "stranger things" we are talking

the future "star wars," the future marvel, that's what they are spending on today. >> we are looking at future spending netflix talking about production in asia pacific at this stage whachlt do y what do you make of the content and on social distancing in productions. >> they talk about how in korea, they didn't have any gap in production this goes back to the point that netflix is a global distributor of content they are making content that spans the entire world this is really a first when you look at the streaming more broadly. maybe disney has crossed the border not many others have gotten there but netflix has. look at the show "money heist. a spanish market show that was

the top hit in this quarter. netflix is making content with global distribution in mind. the growth later on is going to come from international as we saw in this quarter where domestic growth grew whereas international was 7 million. >> thank you for breaking down the details. just a quick look at the wall street day ahead, u.s. futures this morning approach negative you can see slight declines in wall street lying on the european recovery fund as leaders are gathered in brussels and in person. that's all for the show. "worldwide exchange" coming your way next

it is 5:00 at cnbc here is your "temperature five @5" on a friday working to recover >> zuckerberg making a rare rebuke of the trump administration slamming the handling of the virus outbreak >> and not giving the boom netflix hoped for. >> housing back to prepandemic rise talking to a to