ave toet g over this. and that's all for this edition of "dateline." i'm craig melvin. thank you for watching. [theme music] good morning welcome to strooinz. i'm julianna tatelbaum and these are your headlines >> european markets struggle and us futures fear gains after president trump warns the covid crisis will deepen reporting more than 1000 deaths in one day >> it will probably get worse

before it gets better. >> u.s. secretary of state mike pompeo urges the world to stand up to china. in a separate report accuses beijing of digital. >> we work to convince the chinese party it is not the best interest to behave in this behavior >> ceo warns of tough times ahead. >> when we went into the group, we knew that would be challenging with all the shut downs in different parts of the world. we saw recovery in china which was remarkable we have seen a weaker u.s. affected by the pandemic >> dutch paint maker says

material costs will have a positive impact. but ceo warns the virus will continue to weigh for the rest of the year. >> we will continue to see ups and downs. it is lucky it has been balanced between home improvement and the market we feel it has been under control and stay vigilant. >> a warm welcome to "street signs. i want to start the show with the update on the latest numbers in the states. more than 1,000 people died from the virus in the u.s. yesterday for the first time over a month as texas and florida posted record fatalities in the last six out of seven days. the cdc warned that true number infected is likely 10 times higher than reported

u.s. president trump held his first briefing on the coronavirus since april where he admitted the crisis would deepen and urged americans to wear a mask a shift when he down played the magnitude of the pandemic. he offered this grim warning >> it will probably get worse before it gets better. something i don't like saying about things that's the way it is you look, it is all over the world. it tends to do that. >> let's get a check on how european markets have opened this morning they've been trading about an hour now the main benchmark gained 0.3% this morning, we've gained back those and then some. a fairly big day for earnings as the season gets under way. overall, we are seeing earnings hold up better than expected but

not enough to offset some of the concern around the virus that continues to weigh on the sentiment. >> we've got yield moves across the region with the 10-year trading in negative territory. the italian territory which is one of the key beneficiaries we've got notable action in the uk bonds and get a check on the guilt. yield across the uk curve. a couple of things the uk bond yields have touched new lows at the lowest level since march 9 and the five-year has fallen to a record low that comes despite a surge in borrowing for the united kingdom. bringing in the portfolio manager to weigh in on the action thank you for joining me

let's kick off with guilt where we are seeing record lows. you are not so much a fan of guilt, why not >> i would say the government yields are close to 10 basis points treasuries at 60 and bund at minus 45 i would say fairly speaking not that attractive at this point. the government yields going forward as they allow this to take place we are pretty neutral. i would say we have a reface for the u.s.

we prefer to take some risk there. in the uk there is a chance for the policy rate. that would say goodbye to this movement it appears to be slower and due to the delays lockdown and economy. it would be a good effort. if we are going to take the exposure, we are going to take the u.s. >> there is a lot of focus on washington where they'll push through additional.

>> normally with the fiscal package in the order of $1.5 to $2 trillion by the middle of august normally, that would be a reflagsry package. what we have to remember is that this comes to plug a hole in part created by renewed weakness created by the virus trends taking place in a lot of southern states if you look at the proportion of the states where the virus is getting worse, we are talking 40% gdp. this comes to plug a hole. i wouldn't see it as

reflationary move. i think it is more of a plugging a hole >> coming back to what is happening in europe. we've been discussing the lengthy impact of the newly agreed recovery fund and the consensus seems to be that this is a game changer for europe this marks a structural shift from the way things are governed and relieves a lot of uncertainty and fate and ultimate viability of the currency block give us a take on what this means for different regions. we've seen italian bonds what is your take on the difference of the italian bonds and moving ahead >> we are seeing extra stimulus of almost 60% we are not

thinking about true euro bonds this is not the case this is not meant to be kept forever or limited in time i don't think it is right but it is a symbolic step for further cross border transfers it is helpful for the next few years what it means on top of the spread for the action we've seen the ecb is not engaging in outright control but in some form of explicit control when you put more commitment on

the fiscal side, that is positive it spreads about 160 in our mind where is pretty attractive it is hard to find risk globally this is a place where we like to take some risk >> thank you you prefer u.s. treasury to bund and guilt. thank you. >> norwegian aluminum producer has posted a surprise jump in earnings the business continues to be negatively impacted by the pandemic but cost cuts have improves margins the cfo joins me now to discuss

the numbers in more detail tell us what that means for the coming quarter in the second half of the year >> for most industries, our industry has been significantly impacted by lower command in the second quarter at some points, we are seeing lower income rates significantly impacted and to some extent building in construction and general all sectors. as we have been progressing, these rates have progressed 75 to 80% and the higher end of that range going to q 2 to q 3

if we just use ourselves to the third quarter, we expect to see a decline but more to the tune of 15 to 20% in europe and north america. up from 30% lows in the second quarter. >> clearly the cost cutting measures are cost cutting examples give us an example of if we can see improvements in the second quarters if we are fully integrated company from business area to biggest area the biggest relief we've seen is in the box site operations in brazil the costs have come significantly down but we've been able to ramp up production

compared to a year ago when we are the embargo situation. that was really the main part in results for the second quarter into the third quarter when we look at the downstream operations we have delivered above expectations and cost out to the second and third quarter we also have good momentum with our external guidance to deliver in 2020, we are well on track and you should see efforts coming to the third and fourth quarter as well. >> you mentioned brazil. one of the hardest hit countries when it comes to coronavirus

outbreak are you confident you'll be able to maintain operations there >> it is scarey. but we are happy to see we've been able to sustain our operations during the worst period in brazil so far. as a larger global company, we have the benefit of experiencing how this developed in china and in the early stage, we were able to implement to ensure we would not have to reduce production. absentee rates are down from the highest observes we believe we should be able to maintain operations into the third quarter better than the second >> let's talk about what you've seen in china. you talk about how you've given? learnings in china

now the economy is back up and running again. what do you see in terms of the recovery are we back to prepandemic levels there >> i guess that's the million dollar question there. china has developed stronger if you look at key indicators, like passenger car levels, these are at higher levels what is going on in china is really driving the rest of the world. looking at these sides, we've seen increases in all of the cost elements, which supports

the higher levels in the marketplace. chinese recovery is a strength it remains to be scene how sustainable it is. so far, showing stronger momentum than expected on our side >> what does that mean for your outlook for the year have you assumed the strength we are seeing in china will continue >> i think in the stock, we were more cautious. now we are seeing more moving indicators than just the ones directly impacted by subsidies and support. i guess in lack of a strong second wave, the situation looks more positive than they did a month or so ago more than china. >> thank you for giving us time.

cfo of hedro still ahead, abb warns of challenging quarters ahead more when we come back look here, it's your very own all-in-one

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welcome back to "street signs. abb has reported earnings of $651 million the firm also launched a new share buy back program speaking to cnbc earlier, saying the company has seen weakness in the key u.s. market. >> it has been quite an exciting quarter we went into when we went into the group, we knew it would be challenging we saw recovery in china, which was quite remarkable while we see much weaker u.s. affected by the pandemic in europe, in the middle on that

part on that background, i think the mitigation job by that group is okay according to that level but never okay to have lower margin from a year before from my perspective. it is better than expected from this quarter >> in more news, focused on cost savings and margins. meant it was in a good position. the dutch paint maker also said raw material cost would have an impact after we saw a net income attributable to the income falling in the second quarter. telling cnbc earlier that they still expect uncertainty for the rest of the year. >> for the second half, we will indicate we have seen these up and downs. it is a balance between home

improvement and other markets. we feel it is under control and vigilant with the supply update to see where we have the corrections. >> valeo swings into a loss. the french auto supplies maker added that business in china and the u.s. started to recover but warned of continued weakness in europe >> elsewhere in the auto space, bmw will halt output for six weeks as the automaker gears up for the newest electric car. the temporary shutdown will allow for remodelling to take place. >> deutsche bank says the second quarter results will be better than expected ahead of results next week. also signaled that they had a

stronger quarter >> what more can you tell us about what deutsche bank has flagged that prompted this early release? >> they are saying that this is because clients are repacing the so-called corona loans deutsche bank was flashing out loans to clients with guarantees back to the state-owned bank during the corona crisis lockdown here in germany because companies wanted to have more liquidity on their balance sheet. now we see with them paying back those loans quicker than expected allows them to have a higher capital, more than 3% than what analysts had expected.

that is the good news because they had used free capital now for other stuff like investing in other areas for the business such as it there are many possibilities to invest currently deutsche bank is kind of trying to move very fast into digitalization into its business teaming up with google and the like that's one thing which we heard from yesterday the focus next week, when we get the full set of number is how did they do when it comes to are he have knrevenue lines. first quarter shares boosts things tremendously. if those shares persist, that is good news. for quarters and quarters below, revenues were declining.

it depends on whether the lender can boost revenues and not only cut cost next wednesday is the big earnings day at deutsche bank, which could see the positive surprise, which was already guiding us as of wednesday back to you. >> thank you for your report let's get a check on the latest around u.s./china relations. china foreign ministry said u.s. told beijing to close its consulate in houston, texas. a spokesperson condemned the move urging washington to correct their statement or there would be retaliation a report that documents had been burnt at the consulate trump said the u.s. could work with china on a vaccine he said, quote, he's willing to work with anybody willing to get

us a good result the spike meant to criticize beijing's response >> the u.s. on the cusp of losing digital dominance to china. the commission by democratic senator accuses beijing of digital authoritarianism and says the country will rewrite the rules of the internet unless stopped. the report formed to counter act chinese influence. >> u.s. secretary of state mike pompeo has called for a global coalition. speaking with leaders in london, he accused chinese officials of taking advantage of the crisis >> this disaster has been disgraceful. rather than helping the world, they've shown the world the parties true face. we've talked about how we've

seen hong kong's freedom's crushed. we've watched the neighbors in the south china sea and to get a deadly confrontation with india. i want to take this occasion to thank them for the response to this crisis. >> coming up, democrats remain divided over the size of the coronavirus stimulus bill. we break it down after the break.

welcome back to "street signs. i'm julianna tatelbaum these are your headlines european markets struggle. president trump warns the covid-19 crisis will deepen as america warns of more than 1,000 deaths in one day for the first time in over a month >> some areas of the country are doing well others are doing less well it will probably get worse before it gets better. >> u.s. secretary of state mike

pompeo urges the world to stand up to china. a separate report accuses china of authoritarianism >> abb launches a $4 billion share buy back as the giant beats earnings expectations. but the ceo warns of tough times ahead. >> caller: we saw a recovery in china which was quite remarkable when we have seen a much weaker u.s. affected by the pandemic. dutch paint maker says material costs will have a positive impact in the second half. ceo warns the virus will continue to weigh for the rest of the year. >> we'll continue to see these

ups and downs. we are lucky it is balanced between home improvement and other markets. we feel we have it under control and stay extremely vigilant. >> after three days in a row of gains, european markets are taking a little breather opening up on the back foot. we have the cac 40 down 1% the ftse 100 down 0.6% yesterday, the overall european market rallied 0.3%. we did see some negative momentum come together similar on wall street, we saw u.s. stocks loose the momentum into the close the side dropped a little.

in this session here in europe >> you've seen pretty interesting moves. the euro is currently flat versus the dollar but the pound weakening versus the dollar pulling back 0.6%. we have headlines coming through around the time line for a u.s./uk trade deal the uk abandoning hopes of a tried deal by the end of the year we are largely holding recent highs. currently 1.2654 we were discussing the strength and credit suggesting it is riding on the coat tails. fundamentals remain fairly weak. >> looking at futures and a bit more weakness coming through for u.s. markets fairly modest moves. implying the pause for breath. a big day for earnings

we've got tesla and microsoft to report investors also closely eyeing developments in washington u.s. senators are racing against the clock to secure fresh coronavirus relief as benefits expire this week leaving over 20 million americas with a halved weekly income. the senate leader said he will introduce a bill of $1 trillion. they are divided over the size of the fund, benefits and school budgets. >> a signal to families of potential compromise >> if you are looking for a theme, i won't put a bill on the floor that doesn't have liability protection in it don't miss characterize what

this is about. this is not just for businesses. for hospitals, doctors, nurses yes, businesses. also colleges, universities, k-12 everybody trying to grapple with this new disease we didn't fully understand >> pushing back, nancy pelosi insisted the package was not enough >> what we are saying for state and local is around $900 billion is less than one half of what they were willing to put into their tax cut for the wealthiest people and 3% of the benefits going to the top 1%. when they say they don't want to spend more money, it is like, what we are talking about the health, lives and livelihood of the lives of our people. >> welcome to the show, head of

globe al strategy. so many things to discuss with you happening in washington. let's kick off with president trump and his decision to resume the daily coronavirus press briefings. he had halted these earlier. now he's coming back do you see this as a concession of sorts given the criticism that has come his way in terms of his handling of the pandemic? >> no. i don't think it is a concession i think it is a valuable platform for the president as we enter the last few months of what will be a closely contested election you've seen a change in tone from the white house the president talking about wearing masks at long last i have to say being based in europe, this whole debate and politicalization of the mask issue is pretty surreal to

observe. >> i can imagine in terms of the decision to return to these briefings, my question more is this an acknowledgment that president trump has some damage to repair to his reputation with his voters and potential voters running up to the election >> the president has continued to retain supporters one of the things he hasn't done so much is try to expand his base i think in his own words yesterday that we need to be prepared for this virus to be with us for some time. it is an acknowledgment that the pandemic won't be beaten and the impact won't be reversed ahead of the election and this would be a feature of the landscape.

concession, acknowledgment, when it comes to the duration of this new challenge. >> you've raised a simple and important point that only two modern u.s. presidents failed to win an election and both lost in an economic down turn. do you think it will turn up to be a referendum on the handling of the coronavirus or is it for him to steer a narrative on other issues >> i think it is going to be very difficult to reverse the focus on the coronavirus and its impact the pandemic has exposed numerous fault lines in the u.s. which predate the president, of course the fact that u.s. is in the midst of still the first wave and deadliest wave, rather than

a second wave, it makes his reelection campaign more difficult. it is not a matter of willing this pandemic away from this perspective, what is different about this, people are scared hence, the indemnity provisions in the new measures coming out of congress. just indem anifying isn't going to get people back to prepandemic spending and that will hurt the recovery >> to that point, to what extent will relief efforts out of washington stully stimulate the economy. as you saed, americans are scared >> the stimulus measures, this is going to allow people to continue paying their rent and

make their car payments and this sort of thing. again, in the uk where i'm based and the european union, one of the less ones of the crisis was to move swiftly with this relief we've seen in effect the return of the state, including by center/right governments it is not the partisan issue that it is painted to be that this is an extraordinary public health crisis colliding with significant economic crisis and the difference with the u.s. is the absence of a social safety net so when people lose their jobs, they also lose their health care. the absence of sick pay. these things make people go to work even if they are not feeling well these are things the short-term stimulus can't address but why the return to the point of the

referendum fair or unfair on the president's handling on the coronavirus and all of those fault lines that have been exposed. >> in terms of the election results, what would investors likely think of a democratic presidency at this stage given from what we've seen from president trump over the last four years many would say he's not a traditional leader at the helm of the u.s >> he's certainly not a traditional republican days of the trump bump and the trump tax cuts are well and truly in the past. the disruption from the u.s./china trade war has also very much weighed on market sentiment. i've been doing my own polling during the calls interestingly,

although traditionally, of course, equity markets respond positively to the victory of republican presidents. in this case, it appears for global investors that a return to some kind of perceived normality and stability from the white house is going to be welcomed perhaps not in the dollar but more broadly >> before i let you go, i'd like to get your thoughts on what is happening here in the uk in terms of the uk trade relations. a lot of the headlines suggest a deal before the election is unlikely we know prime minister boris johnson has put so much energy and effort into courting the administration what does it mean if we get a change at the top in washington?

>> as you say, i think the prime minister has courted the white house. that may backfire. very valuable for the british prime minister as we head into the last few months that the uk can negotiate a trade deal i never thought that was ghoioig to happen by year end. the best news downing street could open for is an iou, a promise. if president trump isn't elected, he won't be able to deliver that i do think joe biden is necessarily going to hold this against boris johnson but it is not likely to be at the top of the presidential entry if he does win in november >> tina, thank you for sharing your time with us.

head of global strategy. still ahead, tesla kicks off big tech earnings reports today. details next look here, it's your very own all-in-one

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the full peacock movie library, complete collections of iconic tv shows, and more. yup, the best really did get better. magnificent. xfinity x1 just got even better, with peacock premium included at no additional cost. no strings attached.

welcome back to "street signs. snap's stock tech company posted a net loss of $326 million up from last year. it sawdayely active users rise just below expectations. the cfo said the boom in usage it saw in the lockdown had gone away texas instruments expects third quarter revenue to be better in the second quarter the chip quarter said a global shift to a work from home environment would boost demand for its chips. despite seeing a 40% decline in

sales to the auto industry >> shares in coca-cola take a hit. shares post a 5.5% fall. the largest plunge in quarterly rev flew in at least 30 years. speaking to cnbc, the cfo gave this guidance for the rest of the year >> this is going to be difficult between the health restrictions. whether lockdown or any other form of restriction and making the segment of the population more neverous. it is hard to think we'll get back to some level of normal business until there is a vaccine. there is some expectation that q 2 will have been the worst quarter in this crisis going forward, there is still

uncertainty of the exact nature of the direction we feel pretty good about saying that q 2 was the bottom. we'll see recovery here forward and although not necessarily a straight line. >> microsoft and tesla report earnings today analysts are keen to see how microsoft capitalize on the work from home trend with the cloud business tesla will release more with all eyes on the bottom line. the carmaker could become eligible if it could manage the fourth consecutive quarter on profit on a gap basis. shares have surged over 50% this month alone on anticipation it will be included in the index. head of auto research joins me now to discuss tesla thank you for joining me it has been a rise for this share prize chart.

to say the least, 290 billion for the most valued automaker in the world. is this valuation justifiable? >> that's a good question at the moment if you look at it as a stand-alone company, it started meeting goals and becoming profitable i think where the question comes in is where the competitors start to have their electric models available and you start to see some real competition and where we might start to see some shift on valuation >> on that note, we heard from bmx that they'll be closing down to prepare it to produce vehicles a lot of action on the way where they have massive capability and know how when is the time line that it

could become a real threat to tesla. >> i think we are looking at a couple of years. in the shorter term, we are starting with hybrids. that buys them a little breathing space in terms of being able to meet new emission standards that come in in september. it gives consumers the chance for electric vehicles. at the time with the full electric portfolio, it could be another two years from now and we'll see some competition from tesla. >> coming back to the results from tesla, what are the metrics you'll be watching here, is it all about the bottom line from tesla? >> it is important we'll see a lot about q 2 that were better than expected. that's great the make up of those are the

lower margin of model 3. we also know tesla will be cutting prizes like in china which could be a tougher market. we know it will be doing well in terms of delivery. >> clearly, we are expecting to see a bit of revival as tesla has come prices. what are they trying to do there? >> they are establishing a foot hold there is a lot of competition in china. it is the biggest market for electric vehicles. there is a lot of domestic interest in this all of the chinese oems have a big interest in electric vehicles as well it has enabled them to reduce prices because they have access to the market. it was originally to avoid the u.s./china trade war i thinks that paying off for

them they are seeing the benefits of boeing local and the components that came light during the pandemic when the chinese industry was locked down other regions started to suffer from a shortage of components. >> i want to come back to the valuation. it feels like that is the crucial one for the markets. you look across the street analysts have continued to raise the numbers to justify i've heard the argument that tesla has given the new market they've really paved the way what do you make of this argument that it is difficult to actually put a traditional valuation metric on tesla because it is breaking new ground >> i think it is a good argument one of the things we've always

pointed out is that it has never really performed in the same way of a traditional auto stock. you would look at it on the side of tech stocks for example it doesn't have the same business model it is difficult to make a comparison we'll start to see a real test when it does start looking like more traditional company and starts competing with bigger manufacturers. >> can what about the read across and what should investors look to glean and take from the reporting season from other automakers >> the impact of coronavirus will be the big one. it is here to everyone in the major regions and also how quickly they've been able to get their operations going again, which can also be down to the supply chain i think it will be different for each of the manufacturers based on the geographical reach.

where their supply chain is based but the coronavirus will be the biggest impact. >> thank you for joining us this morning ahead of the result. we appreciate it head of auto's research. just before the break, we were discussing the latest in u.s./china relations in particular around the chinese consulate in houston we have the u.s. state department now weighing in a spokesperson said we have directed the closure of prc consulate houston in order to protect american intellectual technology and private information. the united states will not tolerate the prc's violations of our sovereignty and intimidation of our people. president trump insists in fairness and reciprocity of u.s./china relations

these reports come about a burning of documents at the d s consulate. the china foreign ministry said earlier that they had been told to close the consulate to protect american technology and private information. >> the dow jones looking at a 115 point drop at the open the nasdaq looking at a little bit of weakness. all eyes on microsoft and tesla. a look at the u.s. treasuries, looking at 10-year trading 0.59%. >> that's it for today thanks for watching, "worldwide exchange" is up next look here, it's your very own all-in-one

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it is 5:00 here is your "top five @5. the white house warning president trump telling americans things are going to getworse and cob rngress debates the nex round of stimulus. >> and share holders get hammered >> tesla scores another big pay day. >> wha