i think these guys are freaking out over my french lowrider. >> absolutely. >> different cultures all in one place. >> we saw these guys racing muscle cars, but these are the cars that we had, so that's what we were gonna go with. >> california loves cars. >> it's in the blood. >> yeah, it's in the blood. so do i. [engine revs] good morning and welcome to street signs these are your headlines banks weigh on european stocks with hsbc shares slumping to the low heest levest level in a dec. >> shares slip after a 1.2 billion euro loss in the second quarter flagging signs of a turnaround.

>> the economy we see an improvement. >> french and italian manufacturing also pick up in july however concerns still loom of a second wave and president trump reportedly gives china 45 days to celtsel sell tiktok to microsoft after the white house bans it over security concerns. >> happy monday. we already heard the numbers out of italy and france as well as germany and now got the euro zone overall number.

that is significantly better than 51.1. the final manufacturing employment pmi has come in at 42.9 so better than the flash estimate and better than the june figures still in contraction territory. so firmly in expansion territory. now i mentioned that we have a few of the individual country numbers that already came through. in france they recovered showing the expansion at 52.4 points this was higher than 52 points they expanded for the second month in a row rebounding from the plunge triggered by lock downs in the spring. german manufacturing activity saw the first expansion since 2018 last month.

the pmi increased to 51 flat in july up from 45.2 in june. let's get out. she joins us for a little bit more color on the german economy now that we have the final pmi numbers for the manufacturing sector for the month of july is this a rebound that market bulls have been waiting for? >> well, actually, if you're listening to what the institution was actually publishing the pmi data is saying, it's not like the strongest rebound on earth it's a strong rebound we're seeing, especially since there's a strong pick up for new orders in the month of july but it's below precrisis levels but as i was saying the rebound

is pretty strong for new order but also output is picking up in the month of july. so this is good news and that should also lead to a recovery in the third quarter >> yeah, keep on supporting the momentum well into the fourth quarter remains to be seen but one thing is clear, it's really important for the german economy because the manufacturing sector makes up 25% roughly of the german economy and that is really good news that this, the pmi still very forward looking indicator for the first time since as you were saying december 2018 is back in expansionary territory of course that sector was highly worried about all the trade, conflict, et cetera so i guess they had a hard time for many, many months.

and whether the prices now will go away quickly remains to be seen strong new orders in july and that should lead to support of the economic recovery. back to you. >> thank you for that. this next conversation so what is your take for the month of july a recovery in the euro zone. how much of this is a revival in demand versus a technical rebound given the massive pull backs we saw this spring the euro and the economy shower rank by 15% in the first half of the year and that coincided with weak pmi in marchand april and

those economies have been easing lock downs and that has lead to a revival in economic activity as businesses are being -- greater number of businesses have been allowed to start at least trying to return to normal and that lead from growth rates being negative toward what i think is lucky to be quite impressively strong growth rates as we get through this third quarter and momentum continues to build so i wouldn't be surprised if we continue to see further big improvements over the next couple of months. probably reaching a peak in september or so which is likely to be when the fastest pace of this technical rebound is underway after that i think things are looking to get a bit more challenging. >> even though we are seeing

this rebound come through, within the headline, we're still seeing pretty substantial weakness in the labor market the chief economist at ihs market says jobs numbers remain a major concern in the euro area especially as it's likely to be a key determinant of the recovery path so this is a concern in the final manufacturing employment pmi came in at 42.9. how do you expect it to track the european recovery that we're seeing at a headline level. >> well, the interesting thing there is that the labor market is completely detached from what we're seeing in the economy. normally if we had had a recession on the scale that we had seen we would be expecting the unemployment rate to be in the high teens and yet you look at the unemployment data in the last couple of months and unemployment has remained well below 10% and that's of course thanks to the government furlough schemes that have prevented that big loss in labor

demand that you see in the pmi from translating into much higher unemployment and it's that higher unemployment that would ultimately be the big economic head wind to any longer term recovery once the virus becomes less of a constraint and there, i think, actually this speaks to the success of economic policy in effectively preventing widespread job losses, widespread unemployment. in respond to those very low and understandably low pmi figures because effectively what that tells you is that businesses have been lifting their employees from their payroll on to the public payroll with the promise that those people can be reemployed back in the jobs they previously had. >> at this point, what is your take on whether that approach is going to serve europe?

the fact that many european countries have chosen to keep them on company's payrolls versus in the u.s. where they encourage them to shed workers and then they can potentially shift sectors a little bit more easily is it going to serve europe or hinder the recovery, do you think? >> i think it's going to serve europe one of the negative consequences of that is it takes a long time for people to refind a job so in effect putting this on to the labor market is a good way of preventing the long-term unemployment from building up. it's effectively taking out an option on the possibility of the economy, eventually returning to normal and allowing businesses that if and when the virus does properly abate to be able to restart in a fairly functional

way. it obviously means you don't get the clear out of the economy and potentially longer term businesses that perhaps after the virus will not be viable the government is effectively subsidizing them during a period in which they can stay viable. so the cost here is ultimately higher government debt but given that germany and france can finance themselves at negative interest rates at the moment and countries like italy can borrow ten years 1% that's a sensible option for european governments to take out. >> then when we think about the policy structure around schools, to what extent do you think the economic recovery is dependent on children going back to school given the restraint it puts on parents that don't have many options when it comes to child care. >> there's really for me two main drags on the economic

recovery one is something that economic policy can do something about which is preventing large scale long-term employment and the other thing that economic policy can't do anything about is the virus and renewed outbreaks in parts of the europe that tells you that the easing and restrictions we had over the last few months is approaching the limits of what can be achieved and ultimately until we get an effective treatment or vaccine that does provide a headwind and if the limits mean that schools can't return in the autumn and parents are having to remain at home and unable perhaps to engage in it, that is going to be a pretty critical headwind to the recovery and one unfortunately that economic policy can only mid gate against but ultimately until we have a solution to the virus, that i think is going to be the more

serious and critical constraint on how quickly the economies in europe can make up all the lost ground during the recession of the first half of the year >> before i let you go i'd love to get your take on high frequency indicators they had been using we were just discussing before the break the use of things like restaurant bookings to gauge not only economic activity but also potential reemergence of virus numbers. what do you think as an economist of using these data points mobility data versus the more traditional data like inflation numbers? they take a lot longer to go out but a lot more goes into them when it comes to analysis. >> i think in a crisis like this, these days have been invaluable in february and march governments introduced lock

downs. and actually, you know, the scale of the recession and the depth of the recession only became clear once we saw the high frequency indicators. they're useful at the moment and also therefore try to workout how quickly and effectively the economies are returning to normal i suspect in a more normal economic environment where it's hopefully lower than it is at the moment, it's likely to be more limited because the ratio will be lower but at the moment trying to workout, are restaurants operational or not are people moving or not these indicators are phenomenally useful. and of course the high frequency data is useful in gauging whether we can continue to expect lock downs to ease or

potentially in europe at the moment that period of easing lock downs >> thank you for joining us this morning. coming up on the show, hsbc shares slide to the lowest level in more than a decade. a sharp rise in provision. more after the break at cdw we get you're always looking to modernize. yeah. i'm just not sure office drones were the way to do it. [ laughing ] drone voice: l-o-l. our market share looks good, but... drone voice: where are the bagels? well, cdw can help you modernize your company the right way, with a scalable infrastructure from hpe, making you more efficient and secure. great. oh. [ drones buzz angrily ] let's find a different room. for transformation that works, you need hewlett packard enterprise and it orchestration by cdw. people who get it.

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welcome back to street signs, everybody european markets open for just over an hour and it's already been a session we opened up around the flat line and crossed into negative territory and now we're trading positively again now this comes on the back of a difficult week for european markets. if you were long the market it was a challenge. last week the stoxx 600 dropping 3% overall pretty substantial losses for the dax and the italian market in particular. italian stocks trading 0.2%. we have green on the board up about a third of a percent

the ftse 100 flat this morning it's a big week for earnings as they continue. not quite as big as last week but a lot of numbers trying to come through in europe as well as the u.s here's a picture for you of the european banking sector. mixed picture here more earnings coming through we have shares down 2.2% ubs holding steady hsbc down 3.8% a pretty big move lower for the lender as the first half profit fell 65% the decline was lower than expected with posting $4.3 billion for profit during the period compared to

$12.5 billion last year. >> hsbc is warning it's losses could hit 8 to $13 billion this year now this is the 7 to $11 billion range given three months ago this as they reported the first half result with the pretax profits slumping to $4.3 billion now this is a function of loan loss prevention that is a trend among banks increasing their buffers to absorb bad loans due to the coronavirus pandemic. it's expecting $6.8 billion of credit impairment charges for the first six months of this year dividend suspension announced earlier this year was an effort in preserving cash now thanks to such efforts, the ratio which is a key measure of a bank's financial strength went up by 30 basis points from the

end of last year to 60% in the first half of the year also lower global interest rates and reduced customer activity as factors that pressured it's revenue. it's reported revenue at $26.7 billion. that is down 9% on year. hsbc is a value trap for now with no growth, no dividend and no attractiveness. >> speaking of, they posted a 1.26 approximate billion euro loss in the second quarter as the french bank was forced to take a write off and raise provisions charlotte joins us with more what can you tell us about what

exactly disappointed investors as a result. >> revenue was at 5.3 billion euros. it was down 15.7% in the second quarter so ended up being a loss of 1.2 billion euros so within this all eyes are going to be on the investment banking side. fixed income did well and 38% very much still struggling there and in terms of that they carry on with products and it could be on revenue of 200 and 250

million euros. we saw them down 9.6% in the second quarter and it would make deeper costs in q-1 and in term of provisions reached, that was four times the level of four years ago. so it's about 81 basis points for the first half and the whole year, it would be between 70 and 100 basis points earlier this morning we asked him about his forecast for activity for the second half of the year. >> we have taken it and put it

in conservative assumption but we tend to think that we should keep a pretty good activity >> lots have great money to ensurely quiddity and we might see more action on the balance sheet in europe and once we have a little bit more clarity and perspective. >> that was the ceo so they expect the cost to be toward the lower end so it's improvement in the past few weeks and now it's closer to 70 basis points so an

improvement in the overall picture. and shares are down this morning in the french market down about 2% >> it has serious doubts the activist investor that owns a 5% stake in the german bank says it may not have enough experience commerce bank declined to comment. heineken has reported a pick up in beer sales since the april lows but the drinks giant says it is unable to provide a forecast for the rest of the year net profit fell almost 76% during the first half. >> the heineken ceo told cnbc about possible structure changes to come in the gradual recovery. >> we have seen improvements over the second quarter after april and at the same time, we want to be cautious by looking too much into the exit rate out

of june. >> we expect the second half of the year to become volatile. >> we see a lot of strength with double digits increases in europe and beyond. we are growing share in the off trades >> and then of course our own trade business is highly impacted by the crisis and in all transparency we expect it not to come back to pre-covid level until there's a more structural solution. until that moment it will be really two steps forward, one step backward. it's true that we have made a firm commitment globally that there won't be any restructuring due to covid until the end of the year we'll fully stay true to that

promise. at the same time we're making big interventions in the distance we have taken out about half a billion of course mostly in the second quarter and we're taking a look at our capital expenditure. it will be a matter of taking care of the health of our business to protect our business while minimizing the impact on our people globally. >> coming up, global corona cases surpass 18 million we have the latest and the potential of a second wave after the break. just over a year ago, i was drowning in credit card debt. sofi helped me pay off twenty-three thousand dollars of credit card debt. they helped me consolidate all of that into one low monthly payment. they make you feel like it's an honor for them to help you out.

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welcome back to street signs. these are your headlines >> banks underperform with hsbc shares slumping to the lowest level in more than a decade after the lender misses first half estimates shares also slip after the bank reports a 1.2 billion euro loss in the second quarter despite the ceo flagging signs of a

turnaround. >> they're not doing the same that we saw in the second quarter and in all our businesses we see an improvement in june and carries on in july. >> german factories post their first growth as wider euro manufacturing picked up in july as well. however concerns still loom on the second wave. >> and president trump reportedly gives them 45 days to sell tiktok to microsoft after they threaten to ban the video app over security concerns we've got more pmi data for you. we already had the euro zone numbers come in showing that region returned to expansion territory in manufacturing now the u.k. july final

manufacturing pmi has come in at 53.3 that is slightly lower than the estimate of 53.6 so in contrast what we saw in europe in the euro zone rather this has come in weaker than the estimate but still it's the highest reading since march 2019 and in terms of the components here, the manufacturing pmi output has come in at 59.3. the highest since november 2017. a little bit of color on the reading despite the recovery the road left to travel is long and precarious

european markets 1.3% higher leading the charge for european markets and that's after last week. one of the worst performers in europe overall, pulling back about 3% last week. the dax dropped 4% so we're seeing regained ground for the german index but gains across the board, the u.k. lagging slightly up. about 5 basis points let's take a look at how the currencies are trading this morning. not a huge amount of action with the exception of the swiss frank. the euro flat versus the dollar around 11770 the sterling holding steady above the 130 mark versus the dollar they're weakening to the tune of the green back actually strengthening up about 50 basis points u.s. futures, where do we stand for the wall street open well, investors can't quite make up their mind.

and the nasdaq looking to continue to gain out performing 3.7% for the month of july all three of those major indices ended the month higher in contrast to europe it actually pulled back over the course of the month of july. so stark contrast between what's happening in europe and the u.s. in terms of equity performance. >> thousands gathered to protest the coronavirus restrictions many dismiss the pandemic as a false alarm. several poll situations including the health minister took to twitter to condemn the protest calling them irresponsible and dangerous. germany recorded 210,000 cases and more than 9,000 people have died almost 300,000 new cases were reported globally on friday. marking the largest single day increase yet according to the world health organization white house health experts describe the pandemic as extraordinarily widespread in

rural areas of the united states far exceeding the first infection spike in the spring. the white house's top medical adviser dr. anthony fauci expressed hope that a covid-19 vaccine could be available for americans this year. >> there's never a guarantee that you're going to get a safe effective vaccine but for everything that we have seen now in the animal data as well as the early human data we feel cautiously optimistic that we'll have a vaccine by the end of this year and as we go into 2021. >> europe analyst joins us now, cedric, thank you for being with us so a lot of concern around the possibility of a second wave here in europe, what is your take on what a second wave could look like in comparison to the first wave in terms of magnitude and in terms of severity >> well, thank you very much for having me today. well, i think it's important to

put it in context. a second wave but i think what we can say for now particularly is if you see the changing dynamic in europe, basically during mose of the phase when we have waited on the economy to contain, it stayed pretty flat around 11 or 12 million around europe what we have seen over the last is that the number of cases have been peaking out again to watch 17 million so of course, i mean it's a big part of the story. something for the daily cases

and most other european countries including the u.k. and italy so you do see the changing dynamic here to put things in context, this remained much lower than at the european level it's also much lower than where cases are around 192 per million. so that's one thing to consider. the other point also mentioned is that the intensity of this small outbreak is much lower than what we still have in early marchand if it gives you an

example, it's where, you know, the number of these cases have increased or secondedly to 900 cases per day which is not far off from the cases but in terms of the intensity, new hospitalizations, in march you have about 1,000 you had 160 per day and today the numbers are much lower >> it would be great if we could see the trend continue lower intensity of the new outbreaks

i want to ask about what happens if we do see a resurgence of cases and what that means for policy makers and news emerged that the prime minister met with the chancellor so discuss how to avoid another nationwide lock down and one of the options being considered is having over 50 shields for example how do you think about the effectiveness of these measures? is that what we're likely to see and would that be a preferred approach versus what we saw the first time around? >> it's pretty clear because that's evidence that require the kind of friction that we saw early in march and various traits and at the

moment and the restrictions as mentioned but i think for investors, today, the important point to consider is renewed outbreak so far looks much more benign than in march the turn around to what the pandemic or virus in europe is much lower so the main takeaway from this is that even though the pandemic looks more under control in the u.s. than europe, policy measures is much lower in europe and it's exactly what we're seeing at the moment >> that's important to bear in mind for investors moving forward. as we move forward, as we head into the colder months, initially that was the

expectation among the medical and epidemeology communities that this would have a seasonal element to it. what is the latest thinking around the seasonality and europe has been much better at containing the virus than most parts of the world but what about when we head into the winter >> what i can say is that it's very interesting with just early success in controlling the pandemic, they are very likely to remain and it's very high and also that the rate of cases is high and the other countries like australia

which still manage to control the initial ones see renewed increase in cases. >> all right cedric, thank you so much for joining us this morning. cedric gehmel. >> thank you very much. >> follow us on twitter at street signs cnbc and you can tweet me directly if you want to weigh into any conversations we're having today. >> coming up on the show, u.s. lawmakers clash over jobless benefits and talks of a massive new relief package stalled

a thrilling return to earth. two nasa astronauts on board the historic spacex mission. they splashed down safely after a month's long journey said to mark a major milestone for the future of space travel >> splash down. >> a historic and successful splash down off the coast of

florida. >> welcome back to planet earth. thanks for flying spacex. >> the first water landing for an american flown spacecraft in 45 years. >> what an amazing day today we made history. >> the spacex dragon is about 3,500 degrees farenheit. it was slowing down the capsule from 350 to 15 miles per hour. the journey beginning two months ago with astronauts. today marked another significant milestone in the future of space flight. >> 3, 2, 1, 0. ignition lift off of the falcon 9. >> spacex became the first private company to send astronauts into orbit. it had been nearly a decade since nasa launched anyone from u.s. soil. suiting up for the mission meant spending time on experiments and

maintenance on the mission. >> both of our sons are pretty happy about that their pet dinosaur made it into orbit. >> kept the crew company with social media buzzing. >> it's hard to put into words just what it was like to be apart of this expedition, expedition 63. it will be a memory that will last a lifetime for me. >> mission accomplished with more on the horizon. nbc news >> president trump has reportedly given china 45 days to sell tiktok u.s. operations to microsoft that's as they confirmed talks after the president threatened to ban the video app in america. let's bring in karen our resident tech expert this is so many interesting angles to discuss here the one that jumped out to me was the fact that that strategic move from microsoft comes days

after big tech testified in washington defending themselves for not being too dominant in the tech market. what is your key takeaway. >> it's fascinating, isn't it? microsoft has a hundred million u.s. users this is the most valuable stock. so potentially over facebook and snap and twitter and the u.s. has been concerned around privacy. this is a platform used by very young individuals. concerns about protection and data going back into china there's been no real evidence produced about the breach of

this point but the u.s. government is concerned about how it could be used in the future spreading misinformation for instance that's a major concern for the u.s. government. so if this mood does proceed with microsoft or it could be stored in the united states. no separation. a lot of the conversation may not even have a say in that operation at all so it would be a new platform that's created another big question mark that remains is where it does this alo alone. >> it brings in another u.s. company as a minority player and minority shareholder in acquisitions and question marks raised here about what happens and the dominance of the stocks in the social media platforms in the states >> from a political perspective it would offer a pretty elegant

solution from donald trump here and looking at a face-off between washington and beijing and now if there's a possibility that microsoft, one of the tech greats were able to take this business from china and deescalate the situation then that would be a pretty desirable outcome for the white house at this stage, wouldn't it? >> i'm not sure that it deescalates the situation. that's been one of the biggest issues around hardware and software questions around whether that will be possible with tiktok and the likes of google and using a tiktok on the app store and google store that many can simply download. and they try to investigate the company.

and a very big story that the u.s. is very much challenging the dominance that china has in the space and you think about hardware connections and shot that down effectively through huawei and there are other ways in. and the other way in through social media platforms not to mention remote working platforms as well. and on this area it sees there's potential concerns coming up to the u.s. he lix in particular. >> that remains to be seen how china may retaliate. this kind of action discriminating as chinese companies. this business in particular. you looked at the revenue with the business model

how would microsoft look to monetize tiktok. >> it's about the use of data and the metric you can look at is with linked in. they're growing about 10% in the latest quarter a much slower growth than in recent years so potentially bulking up in the space would help and would certainly give microsoft another age in that consumer space but stepping back in a bigger picture microsoft has had it in the cloud. a lot of platforms with the acceleration not to mention the working of the microsoft teams platform and that's all working in his favor. now he could be handed or gifted

this asset and you can imagine there will be a little bit of tension on the price even though this is a very valuable company they're looking at going down the pathway of huawei and losing significant business in the united states and other markets if the u.s. takes a stand. so there may be a bit of a negotiation tension which would be very favorable for microsoft. >> thank you so much for coloring the conversation for us let's psh on and talk a little bit about what we're seeing in the united states in terms of the recovery and various efforts to support the economy minneapolis fed president has suggested that a strict lock down could help the recovery following the dismal second quarter gdp figures. they're failing to bring the virus under control and could result in many more bankruptcies congress could afford spending on a relief bill as it's lead to higher savings state side. >> u.s. lawmakers failed to

reach an agreement over a relief package to help support the economy during the pandemic. white house officials and congressional democrats are at awe over extension to federal unemployment benefits that expired on friday. however both sides are in agreement over a new round of direct cash payments to most americans. house speaker nancy pelosi called the talks productive but said several key differences still remain including this o c >> essential to all of this is to defeat the coronavirus and very central to our heros act is the strategic plan to do that. if we have testing, tracing, treatment, distancing, mask wearing sanitation and the rest, we can lower this. >> white house chief of staff mark meadows played down hopes of a quick resolution to negotiation. >> we're still a long ways apart and i don't want to suggest that

a deal is imminent because it is not. but like with any deal as you make progress, think it's important to recognize that you're making progress and not set an unrealistic expectation that we're just a few items away there's still substantial differences. >> our nbc colleague joins us live now from washington d.c tracy it feels like the comments coming out of washington are a pretty down beat setting a very discouraging picture in terms of where the various lawmakers stand. what's the time line here. tracy i think we may have just lost you so we will hopefully get you back in just a moment. i'm curious where things really stand given the disagreement that seems to exist between lawmakers in washington and no major signs of progress even though they're suggesting there has been some. >> let's take a look at markets and see where we stand a coup of

hours into the european trading session. the stoxx 600 trading .4% higher it's already been a roller coaster session. we started out the morning essentially flat and dipped into negative territory and now we're trading above the flat lines the stoxx 600 has turned positive substantial losses and in particular, the dax and the ftse mib and underperforming. a bit of a catch up trade there happening along side the broader european market rally. the cac 40 up 20 basis points. it's turned negative now down 11 basis points it looks like we will not get him back this hour but hopefully she will be with us this morning

and keep you up to speed and whether we get agreement from the u.s. lawmakers. let's take a look at u.s. futures and where we stand to open the s&p 500 and dow jones looking at a weaker start to trade and fairly muted in terms of the magnitude the tech heavy index looking to open slightly higher the nasdaq out performed up 1.5. up 3.7% for the week overall we'll see if that continues this week that's it for today's show thank you for watching worldwide exchange is coming up next look here, it's your very own all-in-one

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deadlocked in d.c. democrats and the white house still trillions of dollars apart in new coronavirus relief as millions face a new reality without enhanced unemployment benefits deal or no deal, president trump putting the pressure on microsoft over a possible deal with china's tiktok after threatening to ban the application entirely over the weekend and how the mighty have fallen as america's oldest department store files for chapter 11 bankruptcy protection amid the